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The software development process is an overwhelming undertaking for any business. Living in the technological era offers people access to the most advanced tools that can help them grow their businesses and reach new audiences. Modern software products allow companies to scale by automating workflows, increasing performance, predicting industry trends, increasing customer satisfaction, and reducing operational costs.
How can you keep up with the times and artfully weave technology into your business processes? For millions of companies, the solution is software development outsourcing. You certainly may have concerns about how you hand over your project to a third party without losing control and jeopardizing the integrity of your data. Delegating a project to a dedicated software development team requires a thorough vetting process. Luckily, locking in a trustworthy vendor ensures a long and fruitful partnership with a company you can fully rely on. Once you find the right team, there’s a high chance you won’t have to go through this process again. In this article, we will investigate seven expert-level tips for choosing a reliable outsourcing service provider.
In order to determine the best candidates, you first need to know where to search for potential vendors to choose from. There are some options you can employ to shortlist the most suitable candidates:
Reach out to companies you trust to inquire about their experiences with outsourcing. If they can vouch for a vendor, it’s likely they will not let you down.
Another way of vetting a potential software development partner is through testimonials and client feedback. Research the company’s website, social media, and sites like Clutch and GoodFirms to collect reviews. Even though almost every business has some negative reviews online, you will still be able to discern the overall quality.
Depending on the keywords you are using in your search, you will see different results. Try out various terms such as “top custom software development companies” or “software development vendor” to gain access to a large pool of firms.
If your company uses LinkedIn, you are likely to have a few connections that might lead you to the right partner. This platform allows you to get the first impression of the vendor, gather some feedback, and learn about their vision and culture.
The CEO of Outsource Accelerator, a renowned marketplace for outsourcing, mentions that outsourcing IT projects can generate cost savings of up to 70%. Along with the reduction of expenses, companies get better access to talent, free up their resources for business objectives, and gain flexibility in the long run. But how do you reap the benefits while avoiding mistakes when choosing an IT outsourcing provider? Our six steps to selecting the right provider of software product development services will help you alleviate some of the anxiety and show you the way to securing a trustworthy partner.
Before reaching out to an IT outsourcing provider and performing any vetting, it’s important to formulate a clear vision and goals of the project. If not, you won’t be able to communicate the idea and you may end up with a wrong product that doesn’t cater to your audience’s needs. To avoid devastating consequences that will waste your time and money, discuss the general ideas with your stakeholders. Answering questions about product features, budget, target audience, and more, will create a first draft of the future scope. Moreover, the more details an outsourcing vendor has from you, the easier it is to obtain valuable feedback, an accurate budget estimation of the solution and the terms, and a best-calibrated team for your needs from the outsourcing company. Thus, having a clear vision from the start will work in your favor.
Understandably, it can be difficult to evaluate the skills of an outsourcing provider without having a tech expert on board. However, you can always assess the company’s past cases from similar niches, KPIs, and methodologies they use like Agile or SDLC. To ensure the vendor’ acumen, look at their accreditations in project management, web and mobile app development, cloud services, quality assurance, emerging tech solutions, etc. Check the company’s tech stack to learn which technologies they use to develop tech solutions. A decent outsourcing provider works with multiple tools and frameworks and utilizes the latest technologies to stay up-to-date. This step will help you weed out companies that aren’t experienced in certain topics and technologies.
All in all, make sure your future partner will provide end-to-end services, from conceptualization and architecture to development, release, and maintenance activities. It’s beneficial to collaborate with a company that will cover all your needs in the long run.
Aside from technical expertise, your future software development vendor needs to have a proper understanding of the business side. To facilitate a smooth working environment, don’t skip the Discovery Phase. During this stage, the vendor will conduct market research, gather information from you, and provide an extensive overview of the project, usually getting business analysts to work. While technological proficiency is crucial to building solid and functional solutions, business expertise is required to effectively market and promote the end product.
Before starting the engagement, you need to choose a preferable payment model, which may depend on multiple factors—project scope, requirements, timeline, used tech stack, etc. The most popular pricing models in IT outsourcing are:
Finally, for an efficient software development collaboration, it’s imperative to apply common sense when choosing an outsourcing partner. If you think that the price seems too low, it might be a warning sign. Strangely low rates can lead to poor quality, lack of technological acumen, and delays.
Keep in mind that when outsourcing a project to a third party, you will be sharing sensitive data with them. It’s imperative to choose a software development partner who is ready to disclose its privacy policy and standards. On top of that, make sure the company conducts regular audits to maintain a high level of security.
Develop a robust contract agreement that includes information regarding timelines, copyright, product specifications, and more. A well-crafted document will protect both you and the IT partner from misalignments and failed expectations. Aside from contracts, non-disclosure agreements have long become industry standards, ensuring the safety of your information. A trustworthy vendor will not refuse to sign an NDA and will be willing to openly discuss any privacy concerns you have.
You will be closely working with these people for a few months—in some cases, even longer. For this reason, take into account cultural compatibility, approach, and language aspects when looking for an IT partner.
How can you find out whether you are on the same wavelength?
Also pay attention to the parameters, which are rather intuitive than logic-based. Do you have the feeling that your candidate will go the extra mile for you? Do you have similar company values? Do you believe they will give you true commitment and new growth opportunities? If your answers are positive and you feel this chemistry in business relationship, this is definitely a good sign to hire this IT outsourcing company. Having a like-minded outsourcing service provider will mitigate miscommunications, facilitate a more trusting partnership, and help your business make a leap forward. So, congratulations on finding your match.
For nearly three decades, NIX has been a reliable IT partner for businesses of different scales. Our talented team comprises over 3000 experts and has already delivered over 3500 successful projects within dozens of industries. Our focus is always on the client and their needs. We go the extra mile, as we strive to build strong relationships which bear fruit for both sides. Choosing NIX as an outsourcing vendor provides you with in-depth technical expertise, business acumen, and personal dedication. Contact us to learn more details about software development outsourcing and your growth opportunities.
Finding a reliable outsourcing service provider is a lengthy process that requires a considerable time investment. However, to ensure frictionless collaboration, it’s critical to devote your resources to researching, vetting, and interviewing potential vendors extensively. Although delegating an important project can be scary, with the right vendor like NIX, you will only benefit.
The selection process comprises three primary steps: basic research, technical evaluation, and an in-person or video meeting. Basic research includes the company’s website, social media accounts, and B2B review platforms. Visit the IT vendor’s homepage to gauge their experience and overall professionalism. Sites like LinkedIn will give you access to their public image and messaging. You will also be able to see what their employees and partners say about them. Additionally, platforms like Clutch, G2, GoodFirms, and others provide detailed B2B reviews with comments and ratings. Browse these tools to evaluate their working conditions, communication skills, and technical prowess. Finally, arrange a meeting with the company to assess the cultural compatibility and value alignment.
To choose a reliable software development partner, evaluate their technical and communication skills. On top of that, voice your privacy concerns to make sure the vendor has corresponding policies in place. It’s also imperative to do your homework before embarking on this search. Define the scope of the project along with budget expectations to avoid disappointments. Finally, check the public’s opinion about the company on B2B review platforms as well as the company’s social media accounts. If the vendor is involved in the IT community and organizes workshops and webinars, creates e-books and articles, and actively contributes to the world of technology, you might have a winner.
If you are new to the world of IT outsourcing, a common mistake to make is choosing the cheapest outsourcing partner. The true financial benefit typically comes from developing a custom solution that optimizes and automates your processes and increases ROI. Simply going for a lower price tag in the market might result in disappointing results and consequently more expenses in the long run.
Another typical mistake is failing to conduct thorough research. Nowadays, all companies have an online presence that allows you to read reviews, testimonials, and comments across their socials and B2B review sites. In the research, pay close attention to their technical expertise, internal processes, and communication skills.
Finally, go with your gut. Sometimes, you might subconsciously ignore red flags due to a lack of experience or a tempting offer. If you aren’t feeling comfortable with the partner at the vetting and interviewing stage, listen to your intuition and opt out.
First, outsourcing allows companies to focus on their business goals and delegate some heavy lifting to a more experienced IT partner. Besides, hiring an in-house team is a lengthy process that requires a fair amount of time and money. With an outsourcing vendor, you will not have to worry about in-house employees’ salaries, office equipment, taxes, benefits, HR costs, and unknown hidden fees. By allowing you the time to concentrate on more imminent tasks, you will increase productivity and save even more costs in the long run.
Additionally, an external partner will offer you access to a large variety of skills. Especially if you need a rare specialist to develop certain elements, the process of looking for one in your area might take months. Research from McKinsey shows that 87% of companies experience gaps in knowledge. A dedicated software development team usually has a vast pool of candidates on staff ready to jump on a new project.
Within a software development project, you can technically outsource any task. Commonly, businesses delegate the development of web and mobile solutions from scratch as well as enhancements of the existing products. You can also outsource tasks that pertain to consulting, UI/UX design, testing, legacy systems modernization, and more.
From simple applications to complex products with cutting-edge technologies like VR and AI, anything and everything can be outsourced to a third party. Evaluate your resources to determine which parts of the project you can complete on your own and which need to be handed over. Sometimes, it’s easier and much cheaper to outsource tasks than perform them internally.
The most common concerns that companies have in regard to outsourcing include loss of control, diminished quality, data safety risks, and lack of flexibility. However, all of these downsides can be mitigated with open communication and legal documents like NDAs. Even though you might feel that handing over the project will lead to a decrease in flexibility, with the right approach, it can be the opposite. A reliable outsourcing partner will stay in contact and be willing to address your concerns, make changes on the go, and explain their inner workings.
Losing control is a common fear that companies share when contemplating outsourcing. To have peace of mind and minimize any potential problems, establish clear and open communication channels. A partner who is willing to regularly update you on the progress, take in comments, and discuss changes is someone who will allow you to retain control. Additionally, you can choose which parts of the product to delegate. If some elements are too important to hand over, you can always convey that to the vendor to avoid misunderstandings.
Three models of IT outsourcing include onshore, nearshore, and offshore. Onshore software development outsourcing is known as local outsourcing and involves finding an IT vendor in your area. The physical proximity can enable face-to-face meetings, fewer language barriers, and simplified communication. However, companies that are based in North America and Western Europe might find the local rates unattainable. Nearshore software development implies working with a vendor in a neighboring country. For example, if you are based in the US, you can look for an IT provider in Mexico. A big advantage of this model is the similar time zone and ability to host in-person meetings every once in a while.
Companies that choose offshore outsourcing work with software development vendors overseas. Although you will get access to lower rates and a larger pool of candidates, it will be harder to maintain regular communication and control over the project. Every model has its own advantages and disadvantages that you need to weigh in order to make an informed and calculated decision.
The very first step of the outsourcing process is an assessment of the business needs and defining scope. After finalizing these documents, you can begin looking for a reliable IT outsourcing provider. Take your time to thoroughly vet the candidates to ensure smooth collaboration. The next step involves negotiating and signing the contract with the chosen vendor, which includes deliverables, roles and responsibilities, scope, costs, and metrics. What follows is transitioning of rights, data, resources, and knowledge, all of which should be addressed in the contract. After this stage, your remote team starts the project and maintains regular communication with your company to keep you informed of progress, changes, and new growth opportunities.
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