10 Factors to Consider While Outsourcing Your Software Development

February 15, 2023
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In the global market, it has become a new normal to integrate technology in the existing business model to achieve technical superiority and improve operational capabilities. To do so, all kinds of Businesses outsource to meet their technological needs and expect their outsourcing partners to improve their business processes and maximize revenue. Outsourcing your software development requirements can help you focus on business development and management while IT experts handle your software development needs.It can easily be interpreted that the global outsourcing market occupies a share of around $77 billion. 65% of the businesses that have already outsourced successfully are aligned in a queue to outsource more of their IT and software services to attain a competitive edge in this modern era of technology.Although, everyone agrees that outsourcing your software development is a budget-friendly practice. But we cannot neglect the fact that outsourcing comes amidst some challenges as few business owners fail to choose the right development partner. They end up choosing a partner having insufficient know-how about the customer’s business needs and product objectives.[lwptoc title="Factors to Consider While Outsourcing Your Software Development" skipHeadingLevel="h1,h4,h5,h6"]With time, the number of IT outsourcing service providers is increasing at an accelerated rate. Everyone offers different project plans and offers when it comes to project management. The options are almost infinite in such a diverse ecosystem, making it much more crucial for a business to choose the right outsourcing service provider.

Factors to Consider While Outsourcing Your Software Development

As a business owner, you can evaluate all aspects of a project but must spare time to ponder over the following points, which can help you choose the best among numerous outsourcing partners.

Analyze Your Requirements

This is the first aspect to consider every time before searching for an outsourcing service provider. The definition of best varies from person to person. To choose the best, you have to understand your needs and expectations.As a business, it’s your liability to run a smart decision-making process by identifying your business needs, evaluating the problems, and analyzing possible solutions. There is no one absolute solution for choosing an outsourcing partner as it varies with the nature and size of your project, such as the requirements, plausible solutions, etc.

Technical Expertise and Exposure

Another crucial step is to gather information about the service provider, their skills, professionalism, capabilities of their employees, portfolio, communication skills, attitude towards the problems and challenges, seriousness regarding the deadlines, and passion for putting their two cents in an area of the technological revolution.It's always better to hold a meeting with a developer team who will work on your project. Choose a team that follows agile development methodology as it’s more effective in the project development life cycle.While communicating with the developer’s team and upper hierarchy, try to know about their working attitude and seriousness towards a project. Refrain from choosing a vendor who doesn’t have exposure to the latest technologies.

Market Reputation

Everyone wants to work with a reputable service provider. As a visionary business entity, you always search for a professional software development vendor to make a deal with. You need to know before making a contract the scalability of their solutions.Try to know about their adaptability to unseen business challenges. These are some of the most important aspects. But no one will tell you about their weaknesses, and the only way you can get first-hand info about these hidden aspects is by checking their market reputation.Look at their client and project portfolio or get client reviews on their website or social media pages. To move the extra mile, you can have their clients onboard ask for their experience and opinion. Ponder over all these aspects and decide whether you want to hire that vendor or not.

Budget & Size

Budget and Size are very important factors when it comes to outsourcing your software development. If we talk about the size of the project, keep in mind that not all companies undertake any size of projects. Some companies only opt for lengthy and complex projects.There are numerous small to medium-scale companies that undertake projects of any size and complexity. Before approaching an outsourcing partner, evaluate the project plan, whether it is small, medium, or large-scaled, then shortlist the possible vendors as per your feasibility.Analyzing the budget is equally important as sometimes we expect too much as compared to our budget. Before approaching a technology service provider, we need to analyze the budget for the project and how much Return on Investment (RoI) we can retrieve from it.Never compromise on the quality for the sake of cost-cutting. Some vendors include hidden charges in a final amount apart from the project cost. Try to neglect such vendors.

Software Project Development and Management Methodology

Adaptability is the key to survival. In today’s rapidly evolving business ecosystem, businesses need to continuously adapt to the changes and shifts in market dynamics. To stay competitive in the market, you have to opt for the agile development methodology. Agile and Sprint development models are highly effective when it comes to communication and collaboration.

Also Read: IT Staff Augmentation – Best Model for Outsourcing Software Development

Outsourcing vendors who offer flexible delivery plans are agile enough to adapt to rapidly changing technologies. Always choose the outsourcing partner who follows the agile development model and is not reluctant to adapt to the evolving expectations of the client and still deliver as per the predefined schedule.

Financial Stability of Service Provider

It is highly recommended to check the financial stability of a vendor. The client should deeply examine hierarchy and technical details etc. Unimportant factors can cast a huge impact on your project and business relations with the vendor in the future. For instance, you have signed an agreement with your outsource partner, and in the middle of the project, the vendor got bankrupt and abandoned you.Imagine the catastrophic scenario and consequences you have to deal with. Being financially stable means the vendor can sustain itself in the market for a prolonged duration having long-term achievement plans rather than having a volatile monetary goal. While opting for a vendor, one must examine how much time they are in the field or if they are an entrepreneur with zero experience and uncertain financial stability. Get first-hand info about the investors and their assets.

Trust and Security

The trust factor can’t be measured in the beginning as trust develops while working with a partner. You need to provide all your intellectual data and sensitive business information to the vendor, which can be misused if not handled by professional means.While outsourcing your software development, one of the major concerns of a business owner is data and intellectual property security. So, before choosing any vendor, make sure they will go beyond their comfort zone to protect privacy and sensitive data. It is crucial to choose a partner who runs regular security check routines and audits of its network.Check whether they possess the necessary equipment or methodology to protect your sensitive data and prevent leakage of confidential information. Due to such risk factors of privacy and data mishandling, make sure to sign a non-disclosure agreement (NDA) before you share any of these high-profile data with your outsourcing partner. It will safeguard your sensitive data and information from any alleged fraud or damage.

After-Sale Services

Even the most renowned software solutions and top-of-the-line software service providers guarantee 99.99%. Unfortunately, there is no ideal solution available with 100% perfection. Even if it is simple software, you can’t neglect the probability of a future error.Ensure that your vendor offers after-sale service and access to their technical support team for future assistance. This support must include recovery, maintenance, upgrades & error fixation.

Technical Documentation

Any type of software development outsourcing requires dealing with a lot of technical information and documentation. To keep the development process moving without any hurdle, maintain a technical document regarding it.The technical document or report should possess all the technical specifications, timelines, plans, and cost measures. It will help you get an estimate of your budget, time, and effort allocation.

Free Trial

If you are still confused and couldn’t decide on a vendor, you also have an option for a free consultation or a trial. You can choose any option to ensure quality, outcomes, and durability. Ensure that the solution solves your problems, has mandatory features and functions. A free consultation is a semi-stimulation feel free to ask any question and clear all the doubts so you can get a clear picture of how it will add value to your business model.


Outsourcing is the most efficient way to increase productivity while focusing on more core business aspects while allowing professionals to efficiently manage your project or a process. It’s all about choosing the right partner for the right project.By analyzing the factors to consider while outsourcing your software development and integrating them in your decision matrix or feasibility study, you will get fruitful outcomes by extracting the most out of the software outsourcing services.

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