Table of contents
- Cost reduction
- Rich talent pool
- Dedication and scalability
- Modern technology and quicker TTM
- Time zones
- Define goals and budget
- Scope of Work
- Outsourcing models
- Research locations
- Evaluate service providers
How Can I Outsource My Software Project?
In-house software development teams might have been the norm for many enterprises but already seem long past their heyday, and the ever-increasing market share of IT outsourcing is there to prove this.
Fierce competition has forced companies of all sizes – from large enterprises to emerging startups, to optimize cost and resources while improving product quality, and neighbouring or overseas service providers readily offer a wide variety of solutions.
Indeed, in-house software development is typically perceived as a practical and convenient approach to business. But how cost-effective can it be to assemble and maintain a team of handsomely paid professionals compared to an up and running working unit from a region with much lower labor costs and a vibrant ecosystem of companies with solid technology expertise?
The answer is “not really”, and it comes even before you calculate additional expenses such as infrastructure, rent, taxes, technology, HR… The list goes on and on.
Decide how much you’re willing to spend on having your operations outsourced. On the other end, keep in mind that location matters. More precisely, if you go for an onshore partner, it would cost considerably more than if you turn to an offshore center.
Focus is key here – a dedicated team overseas is one hundred percent focused on the particular software project, while your employees can concentrate on the critical competencies concerning your core business.
It is also much easier to scale up and down in accordance with your needs and the challenges of an ever-changing economic landscape.
State-of-the-art tools and the latest coding languages are paramount when it comes to modern technology. With offshore development centers, you get that as part of the package. As a result, business processes become more agile and accelerate time-to-market, much to your competitors’ disappointment.
Different time zones might be inconvenient in terms of real-time communication and meeting schedules, but they come with the substantial positive of extended business coverage.
For the past two years, remote work has been the norm, and the increased use of all sorts of technology has made round-the-clock support imperative. And time difference of 7 to 10 hours means the remote team will cover your region’s expensive night shift at their country’s daytime and regular rates.
Define your goals and Scope of Work, pick a location and outsourcing model, evaluate service providers and take it from there.
A strategic approach is crucial to defining goals, priorities, and expectations as with any new venture. What is your product vision statement, and how much are you prepared to invest in terms of time, funds, and resources? Discuss these within your company and involve the CTO and specialists from key departments in the planning and decision-making process.
Your potential partners will need a profound understanding of the project schedule, volume, and budget, so comprehensive Scope of Work documentation is vital. Its purpose is to define the project timeline, milestones, deliverables, payments, etc.
Clear communication ensures all stakeholders are on the same page throughout the cooperation. Keep in mind it is just as significant to determine what part of the workload you are willing to delegate and what remains outside of the project scope.
Aside from location-based (Onshore, Nearshore, and Offshore/Remote) and pricing (Time & Material and Fixed-Price) models, IT outsourcing can be classified according to the business relationship or the so-called relationship-based outsourcing models.
The Project-Based model is the most popular in IT outsourcing. It applies to entire projects being delegated to a remote service provider after payments, schedules, and technical specifications have been agreed upon by both sides. From planning to the final product, the remote software center’s responsibility is to provide the expected quality by utilizing its own tech stack, infrastructure, and workforce.
The outsourcing company has minimal involvement in the workflow, which clears time and resources for higher priority aspects of their business. Still, they get to define how often the tech vendor project manager reports, so they follow the work progress without personally controlling or influencing it. The Project-Based model is ideal for businesses with limited resources or overly busy with their core product.
The Dedicated/Managed Team model is a flexible model for long-term cooperation. The outsourcing companies decide what specialists they hire for specific tasks that are lower on their radar. Those can be a set of, let’s say, iOS developers, QA engineers, and customer support.
However, enterprises often prefer to go closer to hiring a full-blown team, including UI/UX designers/analysts, DevOps, back-end developers, etc. A well-oiled working unit is more likely to meet deadlines and provide outstanding quality. The clients also determine their level of involvement and control and if they hire a project manager on-site or the remote team reports directly to them.
Staff augmentation is simply expanding your in-house team for a short period by employing a small development unit for a specific task or a fragment of a more significant project your developers find challenging. It is an uncomplicated way to scale up and down your own company in a more cost-efficient manner than hiring in-house, but the project-based and dedicated team models are more viable when long-term cooperation is required.
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There are a few factors to consider when outsourcing a specific software project. Development rates are essential, but companies usually avoid the cheapest services, as questionable execution is almost inevitable, and expenses for fixing compromised code or starting from scratch can pile up at a later stage.
Cultural differences between regions also play a role, and working conditions in Asia can be far from ideal, which is also a precondition for lower quality. On the other hand, Eastern European countries such as Bulgaria, Romania, and Poland provide quality tech education and language proficiency. Moreover, numerous local developers and project managers have lived and studied in Western Europe or stateside, which guarantees smooth communication and business processes.
After you have picked a country to outsource your project to, you will need to narrow down the selection to a handful of remote development centers. Look up your potential partners’ profiles, ratings, and reviews at specialized websites such as Clutch and Deloitte, as well as their own websites and social media channels and their portfolios.
Research what technologies and services they provide, what is their workforce and capacity, and double-check each detail with your tech team. You will also need to look for referrals, as their former or more current partners can give you insights into their processes, agility, commitment, and reliability.
The first thing that comes to mind when outsourcing software projects is mentioned has to be cost reduction. It is hard to argue with statistics, but there is so much more that makes myriads of businesses look for remote cooperation – scalability, agility, top-shelf technologies.
Scalefocus is among the companies that prove outsourcing business models are not ones for the future – they are here to stay. Our teams have already helped enterprises and startups from all over the world grow, and we cannot wait to hear from you and find out how we can assist you, too.
Contact us today, tell us about your new project, and let us discuss the following steps!