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Tips for Outsourcing Your Software Product Development

Published on 30 October 16

Here’s a dilemma – you need rock star developers to bring your product vision to life. However, the best talents are rarely the cheapest ones and most of them are already happily employed at other startups. That’s where outsourcing enters the scene.

The global outsourcing market has already surpassed $524.4 billion in 2015 with IT outsourcing being the largest segment. Deloitte uncovered some additional benefits of outsourcing IT services in their recent survey apart from cutting down the budgets. Over 35 percent of respondents admitted that outsourcing has brought them value beyond cost savings as 3rd party service providers are rapidly evolving into innovation centers and bring in new opportunities for their clients.

Interested in finding the right outsourcing partner for your web development project? Here are the essential tips to get started.

Identify the Optimal Region for Outsourcing

Great developers can be found with equal probability in Madrid, San Francisco, Budapest or Buenos Aires and so does underperformers. Limiting yourself to a single region isn’t the wisest move to make. Hence, you should decide which of the following works best for you – onshore, offshore or nearshore outsourcing.

Onshore stands for working with a company based in the same country with you are but within a different area. The obvious pros is that you are within the same time zone and don’t struggle with miscommunication and cultural differences. The con is that the development price tag is often the same or even higher, compared to what you’ve paid to an in-house team. Additionally, you may not be able to tap into a rare talent if it’s not available locally.

Nearshore outsourcing means opting for a region within the same or close time zone. You are comfortable with making occasional onsite trips and yet manage to cut down some costs due to financial arbitrage. Working together is a breeze as you have a lot of overlapping hours.

Offshore outsourcing means that you and your team are based at different corners of the world. You need to invest more heavily in building an efficient communication funnel and juggle the time zone differences, however. the average hourly rates are rather lucrative and you may have access to a vast pool of talents if talking about Eastern Europe.

Here’s a quick breakdown of what mobile developers charge per hour in different countries around the globe.

Tips for Outsourcing Your Software Product Development - Image 1

Find the Right Prospects

So, you have some ideas about a suitable region and possible costs of product development. Let’s narrow down the search to the exact prospects. The best way to do so is:

  • Ask your professional network for referrals.
  • Make a list of the apps and web products you like and reach out to the founders asking who did the development (or search their website for any clues). Most will likely recommend you their outsourcing partner.
  • Do some online digging and browse niche directories e.g. Clutch, Product Hunt, and Crunch Base , PressFollowers to see which companies pop up and which projects they did previously.

Weed Out the Unsuitable Candidates

You now have a list of emails and contacts. However, you don’t want to get on the phone and spend the whole day talking to a sales rep. Let’s have the garden weed itself.

Send a quick introductory email briefly outlining the kind of project you have in mind e.g. an iOS travel app for millenials. Ask them about the services they offer and how can they help you. Next, assess the following:

  • Speed of reply. If you are based in different times zones, it’s fine to give it a day. Other than that a good company should get back to you within the same day with at least some query.
  • The type of questions they’ve asked. Keep the initial email rather vague to see how the company is willing to dig into specs and your product goals. Based on the questions/replies you receive you can understand fairly well how the company builds its communication funnel and if you can establish mutual understanding effortlessly further down the road.

Ask to Get in Touch with Former Clients

Once you’ve narrowed down the list to just a few great prospects, ask them if they don’t mind you having a conversation with one of their former clients, preferably in a similar niche. Obviously, a decent software development company shouldn’t feel reluctant about that. Give them a quick call and ask the following questions:

  • Can you rate the team’s qualifications on a 1 to 5 scale?
  • Did the communication/collaboration run smooth?
  • Did you have any issues with the deadlines or reporting?
  • And most importantly – would you hire the same company for another project?

If the last one is a firm yes, congrats you’ve probably found a great team to bring your product to life!

This blog is listed under Development & Implementations Community

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