Are you overwhelmed by the mess of outsourcing choices? The data shows that the market is projected to increase from $129.13 billion in 2024 to $171.5 billion in 2028 at a CAGR of 7.4% Overwhelm is the state of mind of each software product company. We get it, you need help, or better put, a long-term outsourcing strategy.
Outsourcing can be thrilling. It has exciting possibilities mixed with skepticism. Yet you need to be careful, so you don't end up entrusting your life savings to an unreliable software wizard. Now, we're going to present you with a guide that will tell you how to outsource software development. We are talking about partners who are there for you, rain or shine, deadlines or birthday cakes (because a good partner will remember those). Yet, rather, let's start with the "requirements".
What is software development outsourcing?
Software development outsourcing involves hiring an external service provider to take care of all the different parts of your software projects. Software outsourcing services can encompass a wide range of offerings, including software development specifically designed to meet your business requirements, as well as the management of business processes and the maintenance of software for your customers. Think of it as hiring experts to join your team, enabling you to focus on advancing the software development project while they handle the technical aspects. That's why we encourage you to discover more about our web outsourcing company.
Outsourcing can be a convenient solution to free up time and energy for more critical responsibilities. It is a process of acquiring goods and services from other suppliers. By utilizing development outsourcing services, companies can access a pool of skilled professionals and expertise. Additionally, they achieve scalability and cost-saving benefits!
Why do companies outsource software development?
What are the benefits of hiring a third-party software development company? Outsourcing IT projects encompass a wide range of services beyond just software development. The trend of remote work is gaining popularity in various sectors, including startups, established companies, and large enterprises, for multiple reasons. Take a look at the four most common reasons why companies choose to outsource:
Financial Management. It is widely acknowledged that establishing an internal engineering team can be a significant financial investment. Your financial situation can be greatly affected by costs associated with employee wages, social security contributions, and the upkeep of your business's physical assets. Startup outsourcing can be utilized in a global talent pool, often at a low level of growth.
Acquiring Rare Proficiencies. Your desired project may require specific skills that your development team lacks. The main reason why companies choose to outsource is that it allows them to tap into a wider range of expertise and knowledge. Are you seeking a mentor who can guide you in a specific programming language or technology? When you delegate, the world becomes a much simpler and more manageable place to navigate.
Scalability and Flexibility. You might require additional resources to expand and modify the project. Outsourcing enables you to effortlessly modify the size and expenses of your workforce, ensuring optimal efficiency and cost-effectiveness. This is especially beneficial for startups and enterprises with unpredictable requirements in the software development industry.
Highlighting Key Points. It is crucial to save time and resources during the management of a development team. To focus on your core business activities, consider delegating certain tasks to specialized service providers. These things can include advertising, selling, or creating new products. While your team focuses on the technical details, it is important to pay attention to the unique qualities that set your business apart.
Application outsourcing is beneficial for both new and established software engineering companies. We often see that it enables them to meet their requirements, lower their costs on software, bring expertise to the team partners, and adjust to increasing time market conditions, but when do you have to start?
When to outsource software development
Nowadays, imagine how many businesses decide to outsource. Still, only a few people are sure or simply know when to do this. That’s why we decided to provide you with some situations, as you can remember your company and also outsource your project with us:
Limited In-House Expertise. Is there a need for specific abilities that your current team lacks? You can access a skilled Overcode team with interesting backgrounds and established product development processes!
Tight Deadlines and Budget. Outsourcing IT operations is a budget-friendly method to achieve your ambitious goals. By using your own resources, we can speed up the development process without high costs.
Scalability Needs. When an application development demands a temporary boost in a development capacity, outsourcing services can offer an adaptable for everyone key. Overcode can adjust the size of your team taking into account your needs without hiring permanent staff.
Custom Software Development. That’s a nice option for an idea to develop something unusual, otherwise if your team lacks clarity or expertise. Our outsourced development team focuses on creating unique software solutions and assembling people who can handle various tasks, including quality assurance.
If you agree with such ideas, Overcode will help you achieve your software development objectives, but this is not a one-size-fits-all approach.
Advantages of outsourcing software development
Hiring software development experts from another country has some advantages. These include lower expenses and more opportunities to find skilled workers. They are basics and everyone understands that. Yet, some unexpected benefits can improve your project. Here are some surprising benefits of outsourcing software development:
New Insight. Outsourcing partners bring valuable expertise from diverse clients across various sectors. We can enhance your project, making it more robust and competitive, by exposing you to new, innovative approaches.
24/7 Development Cycle. Because of the different time zones, we can easily establish software development outsourcing projects and keep building your product more effectively.
Access to The Newest Technologies. You can stay ahead of the tech world with Overcode. We do this by providing access to the most recent advances. By using our knowledge, you can enjoy the most recent technologies and techniques to gain success in market challenges.
Improved Risk Management. Another fact is that by outsourcing, companies can cut the risk associated with development. The expertise lets our team see potential issues and then develop solutions. In this way, the project keeps moving.
Where to outsource software development: onshore, offshore, nearshore
You finally decided to outsource, but what process to start with? What is the best place to hire someone to make a software program? You can find a solution by comprehending the three primary outsourcing models: onshore, offshore, and nearshore. The selection of the most suitable method is crucial, just for you to know that. We advise weighing the pros and cons and finding the best option only after that.
Onshore
Picture this: skilled software engineers operate in the same time zone, prepared for in-person meetings and straightforward communication. Still, there is a little problem…Onshore requires collaborating with a local development company situated in your country. So, when is the appropriate time to use onshore outsourcing?
Onshore outsourcing can offer a smooth and efficient process for complex projects that need extensive teamwork and a profound understanding of the company's culture and values. This method is a frequent legal and regulatory demand if your project deals with tons of confidential information or super innovative ideas. Another important fact is that onshore teams break the challenges of different time zones and facilitate effective communication and collaboration in real-time. In this way, you shouldn’t be worried about dull deadlines with a software development partner.
Advantages
By sharing the cultural background, we can better comprehend the project objectives and the intended recipients, which ultimately enhances the overall development process.
Onshore involves communicating without time or language constraints, reducing confusion and delays.
You can be close together, this makes it easier to meet in person and work together.
Disadvantages
Typically, onshore development teams command higher pay than offshore or near-shore teams. The possibility of higher complete project expenses could result from this.
Depending on where you are, the number of people with a specific skill set may be less than the total number of job seekers.
The global market for outsourcing talent is easily accessible.
Offshore
Offshore software outsourcing will link you to a worldwide network of human resources and expand your horizons. Companies looking to outsource software development in developing nations with lower production expenses provide a cost-effective option, which is appealing for projects with limited budgets.
The primary reason for choosing offshore outsourcing is your development rate is much slower, which makes it suitable for projects with limited funds. You’ll get the worldwide talent pool that offers access to professional skills that may be hard to find in your area. Also, with the help of offshore teams, you can adjust the team’s size according to the changing requirements (which is a pretty cool feature). That can help you to relocate resources, so, for example, four people doing the task instead of nine, to create a smooth working process.
Benefits
The primary benefit is the potential for substantial cost reductions compared to onshore.
Offshore outsourcing allows access to a vast group of skilled developers with various technical abilities.
The time zone differences create nearly continuous development cycles and accelerate the project process.
Risks
Language and time zone contrasts can result in misunderstandings and delays due to communication challenges.
Cultural variations can influence project management style, communication method, and work ethic.
Projects with confidential data may need a more stringent legal system and data security regulations.
Nearshore
On the one hand, nearshore is similar to onshore and offshore models. You can collaborate with a software development team in a nearby country, which is usually on the same continent or has a similar time difference. On the other hand, this model enables cost savings and enhanced communication without the drawbacks of traditional offshore outsourcing.
Why do you need to outsource your project with a nearshore method?
First, nearshore outsourcing is closer to the company's headquarters and cheaper than onshore outsourcing. Still, it’s much more affordable than offshore outsourcing. Usually, people who work nearshore have similar schedules and an understanding of each other's culture, leading to improved communication and collaboration. Oh, we almost forgot to add that nearshore makes people feel safer than offshore development processes and helps with worries about keeping information and data safe.
Pros
Nearshore provides a middle ground between cheaper prices than onshore and more expensive prices than offshore outsourcing.
People you are going to work with live in the same time zones and have similar cultures. This way, they can talk and work together more easily.
Being close to each other makes it simpler to visit and talk and can lower the risks of working together completely.
Cons
The number of skilled individuals in nearshore teams might be limited. Nevertheless, it can provide a broader selection of choices than traditional development.
The offshore option might have fewer time zone gaps than the onshore option, but it still needs to fit into the communication plan.
Remember, the most suitable way to outsource a programming project depends on what you want and what matters to you! Before choosing a course of action, think about how complicated the work is, how much money you have, and how you need to communicate. Thoroughly considering the advantages and disadvantages of each method, you’ll be able to select what ensures the success of the complete project.
How much does it cost to outsource software development?
Are you uncertain about the efficiency of outsourcing in helping you achieve your software development goals? We are capable of handling all tasks, except for ensuring the accuracy of the coffee order. (Just kidding..mostly). Despite being a great choice, it's important to have a companion to help navigate the intricate landscape of external development partners. We will guide you through the six crucial steps to ensure a successful outsourcing experience, equipping you with the necessary knowledge to avoid potential issues and achieve your desired outcomes (with the ultimate solution).
How to successfully outsource IT development
Outsourcing IT development is a strategic move for your business, especially if you are looking to gain external expertise, reduce costs, and focus on your core business. Take a look at the best practices we have taken specifically for you to ensure a successful outsourcing software development process:
1. Identify your goals and requirements
This is the ultimate challenge for you. What are the primary objectives of this project for our company? Are there any innovative and inventive methods of utilizing technology that will revolutionize the operations of your business? Clearly articulate your vision for a product, as this will ensure you are 100% (give or take 99%) aligned with your goals.
Following that, you delve into the main components of the project requirements and ponder: What distinctive features does the software need to possess? The clearer and more detailed your roadmap, the simpler it will be to find a software engineering outsourcing partner who is familiar with your development language, making the process effortless.
2. Consider the budget
Creating top-notch software doesn't have to be costly. Engaging external IT professionals can be cost-effective and provide access to skilled individuals, but it requires careful planning, especially in terms of financial management. This is the guide to achieving successful IT outsourcing, taking into account the budget:
3. Choose an outsourcing software development company
Here is the most anticipated moment to start assembling your global talent dev team. How do you begin your search for these courageous individuals in the extensive realm of IT project outsourcing? Well, we have a guide to help you.
Shortlisting Companies
The website dedicated to reviewing software development companies allows you to explore the whole comprehensive info. These platforms furnish beneficial data on previous customer encounters and the company's rates.
Reach out to people in your professional network, including clients and friends who have hired developers, to inquire about their suggestions.
A freelancer platform can be a valuable tool for locating independent developers or small companies.
Consider Company Size & Expertise
Once you have a compilation of potential skilled developers, it's time to delve further into their qualifications. Take into account the sizes and proficiency of the organization:
Seek out a web outsourcing company that has a successful history in your particular field. They comprehend the distinctive barriers you confront and communicate in the language of your business.
Ensure you possess the necessary technological skills, such as expertise in super-duper blockchain or reliable back-end development tools, for your project.
Select a firm that values data security and follows the applicable laws for YOU. It is crucial in some sectors
Yet, what is the name of the approach that guides the process of creating software? Agile, Waterfall, or another one? To ensure a seamless workflow that aligns with your project requirements, comprehend the company's development methodology (always do that)!
Check Client References & Reviews
Search for examples of case studies that align with your objectives.
Examine fair reviews from trusted sources to gain a comprehensive understanding of customer satisfaction.
Check the security policies
Ensure you have strong security measures to safeguard your intellectual property and sensitive data.
You wouldn't trust your grandma's secret cookie recipe to a fly-by-night bakery, would you? A reliable company is the same. Consistency and ongoing assistance are the flour and sugar of a successful partnership.
Evaluate Cultural Fit
Cultural fit is the primary factor, as a lot of firms can align with your values and goals. It's like teamwork with training wheels... but way cooler because you get awesome software out of it.
Time-zone flexibility
Account for the variations in time zones and how they affect communication and project management.
Conduct interviews with appropriate companies
Define the tasks and duties of the client and contractor (team organization, leadership).
Ask when a contractor is offering a PM, what approach will be employed, and what resources will be used.
Request the team's vacation policy and the specifics of the social package provided to the assigned staff.
Ensure that the specialist's notice period has been approved for a minimum of one month. (To prevent any issues with project deadlines at the eleventh hour, plan ahead!)
Request the level of support from a provider (addressing bugs, introducing new features, etc.).
Ask for a specific time frame to finish the project.
English proficiency
Select a company with high English language skills. This guarantees your team effective and smooth communication.
4. Prepare and sign work documentation
Do you want to ensure a fruitful IT project outsourcing collaboration? Well, it is essential to have a collection of administrative documents that outline the plan for a new promising mission. These working documents contain information about expectations, responsibilities, and legality. The following crucial papers must include:
An NDA (Non-Disclosure Agreement) protects your confidential information, guaranteeing the safety of your ideas and intellectual property throughout the development process.
The Master Services Agreement (MSA) is a comprehensive contract that clearly defines the key elements and regulations of your working relationship with your service provider. This typically covers topics such as compensation, conflict resolution, and concluding the employment relationship.
Service Level Agreements (SLAs) govern all interactions between the client and a company (contractor) and encompass comprehensive details regarding the project's scope of work. This ensures that you receive consistent and high-quality service throughout the entire project.
The Statement of Work (SOW) serves as your comprehensive strategy. It provides a comprehensive overview of the project, outlining its specific details, the expected outcomes, the timeline for completion, and the associated costs. Additionally, SOW ensures that both parties are on the same page and minimizes the chances of misunderstandings during the process.
5. Define your technology stack
A technology stack refers to a collection of software components, including programming languages, frameworks, databases, and tools, that are employed to accomplish a specific software objective. It is essential to choose the right stack for the project to ensure its success, efficiency, and durability, so take the time to understand it.
We advise you to share your project needs and objectives with your project outsourcing partner. Their knowledge and skills are fundamental in suggesting a technology stack that is not only efficient but also customized to your unique requirements and financial constraints. Remember the golden rule: a perfect stack is a customized set of tools that suit the exact needs of the project.
6. Manage project scope, budget, and timeline in each iteration
Our last step in the successful outsourced software product development guide is about tackling the challenge of project management: scope, budget, and timeline. However, we are not worried because we have a strategy in place to guide you through the process of dealing with this mythical creature during the development process.
Project scope
Establish a detailed and thorough plan from the beginning. Establish protocols to address changes in the project scope and ensure effective communication to accommodate any potential cost adjustments.
Additionally, focus on highlighting the most important aspects. This allows you to adjust the size of your project as needed, without sacrificing its core components.
Budgeting for Success
Maintain open communication with your outsourcing partners regarding cost updates. Before moving forward, we recommend having a conversation about the anticipated results, possible modifications, and any extra expenses that may be incurred.
Implement a system to track and document project costs and resource utilization. This allows you to identify potential budget discrepancies early on and make adjustments in real-time.
Proficiency in Time Management
Collaborate with programming outsourcing partners to establish a realistic schedule for each iteration. Take into account the intricacy of growth and possible interdependencies.
Agile practices highlight short cycles and frequent feedback to help you adjust to shifting goals and optimize your development time.
Outsource software development with Overcode
Through outsourcing, we provide software development for startups and companies in reaching their software development objectives over the years.
Our crucial guidance is to prioritize open communication.
Having more extensive initial planning about your goals, needs, and desires will make your outsourcing process easier and more productive. For the most advanced coding solutions and expert product development assistance, you can find everything you need in one place. Overcode’s outsourcing process is efficient and tailored to enhance your business and guarantee a smooth partnership. We usually do the projects at least 20% faster than our competitors. Also, we do many loops of iterations of edits and most importantly, our project manager is on call 24/7, so you can always get answers to any questions. We have task fragmentation, which means that one developer handles only your task and always has a focus core on your project.
Why us?
To succeed in today's market, you need to choose a good development partner, and we stand by our name in the talent pool. Among numerous outsourcing firms with core competencies about your interest, we can definitely offer the best deal starting with the price and finishing with the results. From our statistics, around 90% of our clients come back to outsource IT operations with Overcode, but why? We differentiate ourselves from others because of the following benefits of outsourcing:
Our outsourcing company has been successfully helping enterprises and startups build their innovative products in DevOps, SaaS, Legal, Healthcare, IVF, Education/EduTech, Travel and FoodTech for over 5 years. Overcode’s expertise covers more than 10 technologies, including AI, IoT integration, SaaS development, and data visualization tools.
Even if the problem is complex, and your task was delayed or you didn’t get the result you wanted so much, Overcode can customize the solution to meet your unique requirements.
We have a team of highly skilled English-speaking developers available at competitive rates 60-70$/hour. 85% of team members have a B2-C1 English level and moreover, some of them even have an IELTS certificate, which proves their expertise.
The internal development process in our company follows best practice - iterative development, which reduces the number of unforeseen outcomes and has a high success rate of 90%. That’s why our clients come back to us. We always break down the project into smaller parts, allowing our developers to be cost-effective and reduce issues in the development cycle. Remember, Overcode will ensure that your project stays within your budget and timeframe by carefully planning and executing your project. The cooperation agreement with our company guarantees the protection of the interests of the two parties, taking into account the possible risks and approved obligations.
Our clients have successfully partnered with household names such as LinkedIn, Twitch and SAP. This experience enables us to deliver the quality of technical expertise expected by industry leaders.
Are you prepared for a new outsourcing journey?
You might be overwhelmed by the complexity of the software development process. Everything is easier than it seems. Overcode aims to provide the newest technologies and innovative solutions for developing applications in startups and mid-market companies. We assist our team of skilled engineers and can successfully outsource software development challenges, enabling your company to reach its full potential.
Available models for outsourcing development
At Overcode, we typically operate in two distinct software outsourcing models:
Time and material: T&M outsourcing is a valuable resource for businesses to handle projects that have fluctuating requirements or uncertain plans. By offering a flexible and cost-effective approach, we can provide you with the ability to customize the quantity and quality of resources you utilize, ensuring optimal performance at every stage of the development process. Software development is an ever-evolving process, and Overcode is specifically designed to accommodate and respond to these changes.
Our specialization lies in material outsourcing and time management, allowing us to tailor our software development services to meet your unique requirements. We're like an extension of your team but less likely to take someone else's lunch from the break room. Overcode's skilled engineers can adapt to your vision of the project and keep it on track, no matter what curveballs you throw our way.
The Staff Augmentation / Dedicated Development team is responsible for the training and growth of employees. Our team members are professional developers who concentrate on the tasks you have outlined on a monthly payment. This alternative arrangement places the client in a position of greater accountability for the specialist's work, similar to a remote employee of their organization. The client works independently during the contract period and pays a fixed monthly fee for the quality development outsourcing services.
Below, you can see the outsourcing model comparison table with detailed features and models:
Mistakes to Avoid When Outsourcing Development
We know that outsourcing IT projects is a smart business decision, but it is not a complex undertaking. To prevent any problems and achieve a good outsourcing result, here are five basic things to avoid:
Focusing Exclusively on Cost
Oh, costs…this is one of the main things to consider. Do you want to prioritize the lowest hourly rate without considering the developer's skills and experience? I hope you don’t, otherwise, it might result in expensive reprocessing and missed deadlines.
Prevention: Make sure that the experience and quality are excellent, like in Overcode ;) Assess potential partners not just by their cost, but also by their abilities, expertise, and compatibility with your culture.
Micromanaging Your Outsourced Team:
Picture this: You micromanage every detail like a hamster, destroying the independence of your team. Wait, let’s avoid that, shall we? Stressed team and missed deadlines because of changing scope creep? To be honest, we have no idea since we never had micromanagement issues.
Avoidance: Demonstrate effective and transparent lines of communication and goals, but depend on external collaborators to stick to a predetermined plan.
Neglecting Security Considerations
If you don’t establish the necessary security measures for data handling and access control, you can endanger the security of intellectual property and user data.
That’s why you need to research the security measures of the companies you hire to outsource. Specify who owns the Intellectual Property and who can use it in agreements.
Failure to handle risk properly
Picture this: you deal with potential problems like miscommunication, delays, or changes in the project scope because of the bad outsourcing company. That’s a whole other world you don’t want to live in.
To prevent, recognize possible dangers before they happen, and create plans to deal with them. Keep in touch with outsourcing partners and promptly resolve any problems that may occur in your IT projects outsourcing.
Pros and Cons of Outsourcing Software Development
Before choosing outsourced development, it is crucial to comprehend the potential advantages and drawbacks. Quickly check out the advantages and disadvantages of outsourcing to decide if it's the best option for your project.
In-house development? You see, there are still many differences to talk about... Budget constraints, skills gaps, and scope creep - these factors can catch any person off guard. Face the fear and outsource your project. Work with a skilled team (like Overcode!). Meet the challenges and bring out the best in your software. Now, are you ready to get a breath of fresh air for your team and feel the real power of outsourcing? We'll help you to turn your project into a work of art, not a chaotic mess. Talk to us about your outsourcing needs - and let’s get it on!
