A choice between outsourcing and developing an in-house team has to be preceded by a detailed analysis of all the advantages and disadvantages associated with both strategies. While having an in-house team is an old practice, it has disadvantages, such as a higher hiring timespan and lack of access to skilled software developers.

Outsourcing software development can be quite intimidating, but it will be the best decision you ever make for your business if approached rightly and with the right strategies. Outsourcing gives you access to a global talent pool, whether you are a startup or an already established company looking to hire remote software developers. It gives you access to talent on-demand and thus enables you to scale your team effectively.

Here is the ultimate guide on outsourcing software development, why it works, a detailed process, and how to avoid common mistakes. Let’s first look at the difference between having an Outsourced Software Development vs. an In-house Team.

Outsourced Software Development vs. an In-house Team

An in-house team puts you in direct control over developers and is best for long-term, continuous projects. But again, you’ll have to pay them salaries, pay money on office rent, and other miscellaneous expenses. And, of course, there’s the headache of hiring and onboarding skilled software developers.

Outsourced software development, on the other hand, will connect you with either nearshore software developers or even offshore talent for a small percentage of the cost. Be it a mobile application, web platform, or custom solution, the advantages of outsourcing include the fact that you are going to get flexibility, faster delivery of projects, and access to global talent pools.

7 Step Process to Successfully Outsource Your Software Development Projects

Let’s look at the step-by-step process on how you can easily and effectively outsource software development projects:

1. Be Clear About What You Are Building

You must be very specific about what you want to build: a sleek mobile application, an intricate SaaS platform, or just a patch for your legacy software. Envision how it will be and note features it should have, what kind of problems in your business processes it will address, and finally, who the target users will be. The clearer your vision, the easier it will be to communicate with your outsourced team. Do not sweat the technical details at this stage. Just focus on the “what” and “why.” The “how” comes later.

2. Write a Killer Scope Document

This is your software project playbook. A good scope document covers your project goals, must-have features, timelines, and budget. Think of it as the ultimate cheat sheet for your outsourced developers.

Here is what to include:

• A detailed description of your project.
• A timeline with critical milestones.
• Your budget range (yes, this is important!).
• Tech stack preferences, if you have any.

This step ensures no one’s left wondering what you want to achieve with the software development process.

3. Figure Out If You Should Actually Be Outsourcing or Not

Not every project requires outsourcing, and it is not the magic solution. If you have a small, ongoing task, you don’t need a full-blown outsourced team. But if you’re tackling a big project, need access to global talent pools, or just want to scale fast, then outsourcing can be quite useful. Take a moment to weigh your options. If outsourcing checks all the boxes for your goals, it’s time to prioritize it.

4. Choose Your Outsourcing Location

This is where it gets interesting. You also need to consider your outsourcing location. You’ve got three main options:

• Onshore: Staying local. You’ll likely have easier communication but at a premium price.
• Nearshore: Working with nearshore software developers in neighboring countries. Same time zones? Yes, please!
• Offshore: Going international, usually for cost savings. This could be the most budget-friendly option if you’re okay with late-night and on-call teams.

Pick what suits your budget, communication effectively, and ensure all the teams align with the project’s goals.

5. Select the Right Outsourcing Model

Now, determine how you will set up the collaboration. You have a few ways to follow:

• Staff Augmentation: Do you need one or two developers to fill gaps in your team? Then, you can select this outsourcing model.
• Dedicated Team: Perfect when you want a full-fledged team to take care of your project.
• Project-Based: Hand over the entire project, sit back, and let the pros handle everything.

The best part is that each model has advantages, so figure out which fits your needs best and helps your project to get completed with time.

6. Research to Shortlist Potential Vendors

Research companies or outsourcing agencies with good records of work. Visit their websites and read reviews about them. Sortlist 3–5 companies that fit your needs and requirements. Now, it’s time for some due diligence! Now that you have your shortlisted, send emails to assess them further.

Most good outsourcing companies offer some sort of free consultation. Don’t skip this step because it will let you know if your goals are aligned with them. Utilize this to go in-depth about your project, share your scope document, and get a feel for how they communicate.

7. Close the Deal with Contracts

Found your perfect match? Awesome! Now, it’s time to make things official. Draft a contract that covers the following:

• Payment terms
• Project milestones
• Intellectual property (IP) rights
• Confidentiality agreements (NDA)

This assures that your project is protected because every party involved is literally on the same page. Review the fine print carefully before signing. Good communication is pivotal when you’re working with remote developers. Get the tools that will keep them looped in and connected. Having the right tech stack in place will guarantee that your project stays on track and avoids the dreaded “miscommunication meltdown.”

Things To Be Mindful of While Outsourcing Software Development

Outsourcing software development can be very useful, especially when it comes to getting the project completed on time and with lower associated costs. However, you need to also consider a few factors when it comes to outsourcing projects. Let’s look at some of the factors that you need to keep in mind:

• Cultural And Time Zone Differences: Nearshore software development reduces such challenges and has many benefits with regard to cost-effectiveness.
• Data Security: Ensure that your outsourcing partner has stringent security measures in place.
• Scalability Options: The partner should be able to scale the resources either up or down based on your project’s requirements.
• Clear Deliverables: Set expectations upfront rather than being disappointed later on.

Mistakes to Avoid When Outsourcing Development

You also need to understand the mistakes that can occur during the software development process. Avoiding these mistakes will help you get quality output without missing out on deadlines.

• Skipping Due Diligence: Skipping the due diligence process in selecting an outsourcing partner may lead to delays or failure to deliver quality results.
• Only Focus on Price: Saving money is a great temptation, but cheap generally isn’t synonymous with good. Quality investment pays off in the long run.
• Poor Communication: If developers can’t communicate properly, you can forget about getting what you want from them, even if they’re extremely skilled.
• Undefined Goals: Projects with vague requirements are most commonly doomed to generate confusion and delay.
• Ignoring Cultural Fit: A good cultural fit paves the way for better teamwork and outcomes.

Conclusion

Outsourced software development is a treasure full of possibilities. From accessing international pools of talent to working with nearshore software developers and using talent on-demand for quick scaling, outsourcing provides the freedom and knowledge to realize your vision. Follow these steps, steer clear of typical mistakes, and ensure you build an effective working relationship with your outsourcing partner. Following the right strategy, your software project will succeed greatly. Hyqoo can help you get access to skilled software developers who can help you with your outsourcing needs. Connect with us to learn more about how we can help you streamline your project management efforts.

FAQs

1. What are the most important advantages of outsourcing software development?

Outsourcing lets your company capitalize on the expertise that global talent pools bring. You can hire remote software developers who work completely based on your needs and demands. Plus, it will save you a lot of money, is highly scalable, and lets you focus on your core business while the experts handle the tech.

2. How do I choose between onshore, nearshore, and offshore outsourcing?

It depends on the priorities. Onshore works fine if communication should be easy but is more pricey. Nearshore outsourcing offers balance in terms of similar time zones and cost savings. Offshore is very cost-friendly but may need adjustments for the differences in time zones.

3. What can be done to ensure a smooth outsourcing experience?

Start with a well-defined project scope, choose the right outsourcing model, and communicate properly using Slack, Zoom, or any other tool. Be sure to select a trustworthy partner and research and evaluate nearshore software developers correctly or any other outsourcing option.