Beginners Guide to Outsourcing Your Software Development Project

Clock icon 5 months agoFolder icon Oleksandr Kravets

Developing or outsourcing a product is quite difficult. You must not only create something that people want to buy but also avoid dead-ends and keep an eye on new functionality your users are asking for.

If you work for a start-up, then everything is even harder. It is likely that you will often face a fluctuating workload that will sometimes require more people than the company can currently obtain. In addition to working harder and hiring software developers, there is another way to overcome these challenges.

In these urgent situations, the development of outsourcing software could partially or totally make a real difference to your business.

With this guide, you will discover the entire offshore software development process and learn how to use best practices to filter fraud, reduce potential risks, and possibly make it an effective option for you.

If you are looking for a software development team, this guide is for you.

Difference between Offshore, Nearshore, and Onshore Software Development

  • Offshore software development means that you work with a remote team outside of your home country. They are usually several time-zones away from you.
  • Nearshore software development is quite similar to offshore software development, but the main difference is proximity. A nearshore software development company is usually in the same time-zone or at least close to your country.
  • Onshore software outsourcing means that you are working with a software company operating in your country.

What is Offshore Software Development?

Offshore software development is an act of outsourcing work to an external software developer. Software-related services may vary widely; these could be web development, web application development, mobile application development, and many other related services.

One of the main reasons for outsourcing software development to an offshore partner is to take advantage of lower costs.

Advantages of Offshore Software Development

Cost effective: companies can save up to 30% on operating costs by outsourcing their software development! Hiring on-site IT staff is expensive. Software agencies based in the United States, Western Europe and other highly developed countries charge higher fees while foreign, developing countries have a lower cost of living, which allows them to pay lower fees than software development companies onshore.

Reduced operating costs: hiring new members for your software development team involves administration costs. Also, it is likely that you will need to provide the necessary equipment (computers, peripherals, etc.), as well as office space.

You do not have to train employees: your software development partner will be responsible for training your employees. This is something you absolutely must do to keep your workforce competitive and to keep these people in your business long term. An outsourcing partner can take care of all special training and equipment which is part of their main activities.

Specific Skills: Most offshore software developers have targeted knowledge. Therefore, if you need a qualified specialist with specific skills, it is better and faster to use the services of a software outsourcing company.

A boost for product development: Hiring an outsourced software developer gives an instant boost to your product development and helps you reach your next product milestone on time.

You will be more focused: If you partially or fully outsource your software project, you can focus on other pressing issues. You will have additional resources to process other parts of the project with added value.

How to make Outsourced Software Development work for you

Unfortunately, there is not much guarantee that your software development partner is 100% compatible, but by following these tips you will undoubtedly be able to reduce the risks associated with the selection process.

The good news here is that problems can be avoided using the following steps:

1. Before choosing a partner

Before you start looking for the ideal software development agency, you must first specify precisely what you need. Having a vague idea is not enough. Having a plan with some sketches is better, but it does not cut it either. If you are about to find an offshore or nearshore software developer, you must first specify the following:

  1. Have a clear understanding of the products/features your target audience wants.
  2. Make sure the product you want to build complies with the regulations (if there are any). It is frustrating when regulatory problems are discovered during the project at a later stage.
  3. A roadmap of the product with milestones. You need to articulate the goals and objectives of your project in order to see where you want to go and what benchmarks you need to reach. This creates a list of priorities.
  4. Organize user stories: Specify who will use your product and what you can do with your application.
  5. Select a person who is authorized to make decisions about the product, and the software agency can deal directly with them (this speeds up communication and decision-making).

2. When selecting an offshore software developer

When you have found potential partners with whom to work with, the first thing to do is to check their online presence. This is where you should focus:

References: Does the company have references showing that it does? It doesn’t take a rocket scientist to put fake projects on a website. You can do two things in order to see if references are legitimate:

Get in touch with the companies they claim to have worked with, ask them about their experience, what went wrong and what worked well during the project. They can give you great insight into how your potential partners operate and how they manage projects related to product development.

Testimonials: Customer testimonials are certainly a factor when it comes to trust. In this case, you can also go further by contacting the person who has supplied the recommendation.

You can also interview their old customers who have a similar project about their experience. Check if the company has a blog where it writes about coding, look for information about team members and review their LinkedIn profiles in order to view their experience and skills.

3. At the end of the first contact

It is time to get in touch with the selected companies that made it through the first qualifying round. We recommend you pay close attention to the following things:

Response: How long did they take to respond after the first contact was made? This can be an indicator of the weak processes that the company has.

Technologies/tools they use: always ask for the technologies being used. Not only the technologies related to software development, but also the tools used for communication and project management. This gives a better understanding of their workflow and practices.

Time-Zone Challenge: In many cases, your software partner is located far from your country. Make sure you specify how you will manage communication and when you schedule regular meetings and collaboration sessions.

Projects tested: quick results build confidence. With a project being tested, you can see exactly how communication and coordination operate with the other team and how they work. You can also check their code and see if the quality meets your expectations.

4. Working together

Working efficiently with a geographically distributed team adds a little complexity to the project, which makes coordination of work and communication a little more difficult during the project.

The problem is that even small misunderstandings can quickly turn into more severe problems. Working with an outsourced software development company, therefore, requires a higher level of coordination.

These are the most important best practices you need to follow for offshore software development to work for you. Applying these practices will lead you to a system that keeps your project running smoothly and greatly reduces risk.


Most problems with outsourced software development come from communication issues. We cannot over-emphasize the importance of frequent and regular communication. It seems that face-to-face conversations are irreplaceable, but fortunately, we live in the 21st century and many great tools can be used to support/imitate face-to-face communication.

First, you need to make sure that each project stakeholder is a member of a chat forum or a constantly open instant messaging platform. By doing this, you can create an environment in which most team communications are centralised and problems can be resolved quickly. Tools like Google Hangout, Skype and GoToMeeting are perfect for this.

Time-zone Issues

Time-zone difference can be a real problem that could slow down the communication and overall progress of the project. In more severe cases, it is entirely possible that your software developer partner finishes work just as you are starting, which means that working hours do not overlap between both sides.

The best way to solve this problem is to use “time-zone synchronization.” Ensure that certain hours of work (ideally 4 hours) overlap and that most communication takes place during this time. Time-zone synchronization requires time flexibility for all project stakeholders.

Document Management and Administration

Administration: working with an offshore software developer involves management (well, almost everything comes with administration work) and tools such as DocuSign and Hellosign, which offer paperless solutions to sign any document, can help. This saves you from unnecessarily printing and scanning documents.

Therefore, this is a system that can be used to manage outsourced software projects; it is the backbone of mutual trust and successful cooperation that allows seamless cooperation between your team and your outsourcing partner.

Even if the code is tested, there may be minor errors that weren’t discovered during testing. It is normal, and your software developer must provide support once the project is complete.

Developing outsourcing software is not as scary as it seems if you do it right. You can significantly reduce risk and make it work for you if you carefully define your project, look for potential businesses and use best practices to make the work transparent, communication clear and the project properly coordinated.

With this guide, we hope to have shed light on the development of outsourced software that can work for you.