Starting a project with your in-house IT team can sometimes feel limiting, especially if your team's size and skill set don't match the ambitious scope of your company's growth goals. These limitations can lead to bottlenecks in your business operations, potentially stalling your company's progress when faced with projects that require expertise beyond your team's capabilities.
Starting a project with your in-house IT team can sometimes feel limiting, especially if your team's size and skill set don't match the ambitious scope of your company's growth goals. These limitations can lead to bottlenecks in your business operations, potentially stalling your company's progress when faced with projects that require expertise beyond your team's capabilities.
However, there's a solution to this challenge: Outsourcing. By outsourcing software development, you gain access to a broader pool of talent, including developers and niche experts, who can help overcome the hurdles your in-house team might face. But, to truly reap the benefits of outsourcing, it's crucial to understand the most effective strategy for your specific project needs.
In this blog post, we'll explore how to outsource software development effectively and provide expert tips to ensure your project goes smoothly.
The following tips and best practices can help you get the most out of your outsourcing engagement.
An illustration of software development using Java, PHP, and C++.
Typically, there are three models of outsourcing in software development, each of which has advantages and disadvantages:
Onshoring: When you outsource a project within your own country, you are onshoring it. This model gives you the most control over the project and allows for better communication and cultural understanding.
Nearshoring: Outsourcing to a nearby nation is called 'nearshoring.' With it, you can reduce your costs while retaining a fair level of communication.
Offshoring: Offshoring involves hiring software experts who reside outside of your country and region. It offers a wider pool of talent at lower costs than locally. However, you might find some communication issues.
Choosing the right model for your needs is foundational to a successful software development outsourcing engagement. For example, onshoring provides an experience most similar to working with an in-house team, but it’s much more expensive than offshoring, making it a poor choice for companies seeking the lowest possible cost. Nearshoring, on the other hand, provides a great balance between the cost-effectiveness of offshoring and the communication and control of onshoring.
Staff Augmentation | Project-Based | Dedicated Teams | |
Scalability | ✔ | ✔ | ✔ |
Flexibility | ✔ | ✔ | ✔ |
Collaboration | ✔ | Partially | ✘ |
Focus | ✘ | ✔ | ✔ |
Control | ✔ | Partially | ✘ |
Outsourcing work to a software company can significantly impact your project's success. The strategy you choose plays a crucial role in defining this outcome. To ensure a successful collaboration, it's essential to understand the three main strategies for outsourcing system development. These strategies differ primarily in the scope of work you expect the software company to handle.
Staff Augmentation Outsourcing Strategy Staff augmentation refers to bringing software developers into your IT team so you share responsibility for the project. They can supplement your workforce in numbers and skills at a lower price than if you were to hire them full-time. Since they increase your workforce, you can scale up your project.
Project-Based Outsourcing Strategy With project-based outsourcing, the software company fully accepts responsibility for completing your project. This allows your team to focus on other works, gives you flexibility in terms of project scope, and places the responsibility of the project on the external company.
Dedicated Teams Outsourcing Strategy When you work with dedicated teams, they are responsible for executing the entire development process. This is more applicable to companies outside the software industry, such as health centers.
An illustration of the steps involved in outsourcing software development
Understanding all the processes and your responsibilities before entering an outsourcing engagement will help ensure your software project’s success. Typically, you’ll need to go through the following steps:
To begin outsourcing software development, you need to establish exactly what you need and the skills required to reach your goal. Next, you should decide if you need to create something new or if the technology is already available and you should purchase it. Finally, you should consider whether the benefits outweigh the costs of onshoring, nearshoring, and offshoring projects.
Once you've defined what you need, you can prepare the project documentation. It should include the scope, data, goals, resources, skills required, and other relevant information you can use to evaluate software companies.
After you have found qualified companies, you should research them and verify their claims. You should ensure they have the skills required to do the work and a portfolio of previous work that aligns with your current project. That means interviewing their representatives, looking up their references, and doing a background check.
Now that you've verified the potential software companies, select the best one. As you make your selection, keep in mind the benefits of different models and strategies. Then, you can make a contract that will protect both of you, determine responsibilities, and set expectations. In particular, you should ensure you've detailed the pricing method, intellectual property rights, data security policy, and acceptance criteria.
Once you've signed the contract, the software company will begin working, and you need to manage them to ensure they respect the contract, stay within budget, and meet the timeline. Meanwhile, the software company will build and test the project.
Finally, after the software company has finished developing your project, they'll send it and its relevant information to you, and you can install it in your in-house structure. Then, you're done with the outsourced project!
Here are some extra tips for more effective software development outsourcing:
Schedule regular meetings to quickly identify issues and alert the external company of any changes.
You should plan for common problems that may arise so your business isn't greatly affected if the project fails.
You should monitor the project at every step to ensure it's going according to plan.
Now that you know how to outsource software development effectively using different models and strategies, you can certainly benefit from lower costs, increased flexibility, and scalability. However, it's only by using the correct outsourcing process that you can gain these benefits. Therefore, you should carefully compare software companies within and outside your country and consider the level of control you want over your project. Finally, you should select the right company, like Divelement, to reduce cost, increase scalability, and manage the project expertly, keeping in mind the mentioned tips and tricks throughout the process.
To learn more about outsourcing software development, schedule a call with the Divelement team today.
