Software development outsourcing companies are not all created equal. Therefore, given the potential for either great gain or a disappointing waste of time and resources, your choice of outsourcing partner should be made with careful consideration.
7 things to consider when outsourcing software development
Which software development outsourcing model best meets your needs?
A number of factors will determine whether you will want to choose staff augmentation, a dedicated team, or a hybrid team. This can depend on:
- how well the resources you have match the needs of your project;
- your project goals;
- your budget; and
- your timeline.
Staff augmentation means that a company hires one or a few specialists from a software development company to join its local or remote team. If you have most of what you need in house, staff augmentation can help you fill the gaps.
A dedicated team is a complete team hired from a specialist company. This software outsourcing company works closely with the client and takes all the risks. If you have little or none of the resources the project requires, a dedicated team can take care of everything for you.
Finally, these two models can be combined to create a hybrid team. Each role may be filled by both internal and external employees, or half of the roles are taken by each company. This model grants substantial control over the project to both parties, more than in pure outsourcing or dedicated teams yet less than in staff augmentation.
Which kind of software development outsourcing contract suits best?
The traditional choice was a fixed-price contract, where the client and the outsourcing partner negotiate a certain price for delivering services with a well-defined scope and deadline.
The more typical choice now is a time and materials contract (T&M). The client pays for the amount of time the outsourced team works and for the materials required for the project. However, such a contract does not account for the software developers’ performance or level of success.
A quoted time and materials contract (QT&M) solves the issues inherent in the above types of contracts. The client will only pay for the work done by the outsourcing team and not for the time spent on doing it. There is a well-prepared project backlog with clear priorities and estimates, and a fixed price per iteration or per story point. This model maintains control over spending and allows for effective project governance.
Ensure the software development contract sets up a proper legal framework
An outsourcing contract should be structured as a framework agreement. Such a contract defines the general terms and conditions of the project and the processes and procedures that will apply to each project. Purchase orders specifying the details of each project enable the client to launch new projects quickly and easily. Framework agreements even help with single projects because the client can make changes to the team or the way they work.
How should a software development team be built?
It is essential to have a well-structured and well-managed development team that includes a project manager and skilled software engineers. Factors such as team composition, size, and seniority level; solution architecture; and project backlog will go into the decisions you make about your development team.
You will need a clear vision of the final product and be able to clearly communicate that vision to your outsourcing partner. Define your needs and expectations in detail before starting the project to improve the quality and efficiency of the software solution.
Covering risks common in outsourcing software development
Some of the most common outsourcing issues relate to properly planning and preparing the outsourced development team. A team that is too large, too small, or unbalanced in terms of skills could lead to wasted time, money, and resources, so take a close look at the initial backlog and the technical skills that will be required to determine the optimal size and composition of your software development team.
Once the outsourced team is hired:
- Make sure they understand the nature and specifics of the project.
- Consistently review and revise the ideas behind the choice of architecture and tools.
- Assess completed development process tasks often.
- Create a plan for introducing individuals to, and removing them from, the team as needed.
- Continually develop the team members’ skills.
The security- and compliance-related issues that may come up when providing software development services should be included in an appendix to the framework agreement.
Such issues include:
- physical access to the premises
- security measures and access rights to IT systems
- how personal data is processed and accessed, and GDPR documentation
- security audit procedures
- how sensitive data should be stored
- sanctions for any breach of confidentiality
Each of the project team members should sign a confidentiality agreement. Your outsourcing software development company should organize training for all project team members to explain what kinds of project-related information is confidential in order to minimize the risk of an accidental breach of regulations.
Ensure the best working conditions for your software development project team
Retaining employees is a challenging and important issue for firms that hire development teams from software outsourcing companies.
Holding on to your staff helps project teams function well. More product features are delivered in less time because a motivated and cohesive project team works like a well-oiled machine, reusing elements it developed earlier and using shared practices and tools more effectively.
Some good practices are to:
- Ensure that projects are interesting, unconventional, and meaningful.
- Create a positive culture within the group and foster good relationships between its members.
- Celebrate the group’s work.
- Make sure the team members are given tasks according to their skills and preferences and rotate them when necessary.
- Maintain a healthy work–life balance—avoid extended periods of time pressure.
- Plan time for IT specialists to participate in corporate events and professional development activities.
- Conduct personality analyses of the team members to ensure they complement each other.
Outsourcing software development—a summary
Since there are plenty of software development companies on the market, choosing the right software development outsourcing company might sometimes be a very arduous task. You can treat this article as a checklist that will help you make an informed decision and secure success in your software development projects.