Top 6 tips for Outsourcing your Software Development

Outsourcing is a common practice in software development for many businesses whose core functions are not tech-oriented. It makes little sense, for example, for a fitness company to hire a programmer to make a customer management system. Outsourcing is cost-effective and generates less legal paperwork for a business. However, it is important to do it in a strategic way to achieve the desired results and benefits.

1. What are your business needs?

This is the first thing to consider when considering software development outsourcing. Contacting a software development company without an idea of what you need is akin to doing window shopping. The software company will make proposals on what you want, as opposed to what your business needs. Have a checklist of what the software you need is supposed to do.

2. Draft an RFP

Draft a Request for Proposal based on your needs. An RFP should give you an idea of the scope of the project and the budget estimates. With this, you can assess the suitability of 3-5 software development companies based on their response to the RFP.

3. Decide on the kind of outsourcing

There are different types of outsourcing;

• Onshore – This is where you outsource to a company within your area, city or country. This comes with the advantage of proximity and the same culture, but the disadvantages of the same taxes and other legal paperwork.
• Nearshore – This is outsourcing to a country in the same geographical area, e.g. US company and Latin American Software company. Advantages include a smaller time difference and sometimes language and culture
• Offshore – This is outsourcing to a company across the world e.g. a US company outsourcing to India. There are could be lower costs but a huge time difference and corporate culture

4. Choose a software development company

There are several considerations when choosing a software development company;

• Technical experience – certifications, past projects, and team size
• Communications issues – Language, time difference and corporate culture
• Proximity – Can you visit conveniently?

5. Agree on delivery timelines

It is important to agree on delivery timelines and milestones, along with a payment plan. This helps avoid misunderstandings and saves you entangling with an incompetent team.

6. Have a legal contract

It is important to anchor your contract in law, especially where large amounts of money are involved. If the legal systems of your two countries are different, hire a lawyer in the outsourcing destination to make a contract that protects your interests in that jurisdiction.

Outsourcing strategically allows your business to harness the benefits of outsourcing including cost-effectiveness, taxation benefits, and access to superior skills.