How do I know when to outsource my software development requirements?

Clock icon 2 years agoFolder icon Oleksandr Kravets

The only limit to what can be built by a team of software developers is imagination. You come up with an idea for a product or service, and chances are engineers can build it for you.

But embarking on a software development project is not as simple as clicking your fingers. It’s a challenge.

In order to ensure the build of your software project is successful, you need to consider different aspects:

  • Budget available
  • Human resources available
  • Technology tools required
  • Users who want the product or service you’re planning to build
  • Timelines

Of course, these are just the highlights. A sub-set of challenges will emerge under each of those over-arching considerations.

Looking for ways to simplify the process, many companies ask themselves when to outsource software development?

This post is a guide to when and how you might want to consider outsourcing the software developments of your company.


When is the right time to outsource software development?

Startups, as well as large and established enterprises, increasingly choose to outsource their software development to agencies. Perhaps you want to create your own app or build a new software tool and you need to reach Minimum Viable Product (MVP) status as quickly as possible.

This is where an outsourced software developer, or a team of developers, can really help. However, it’s worthwhile to do your homework before you embark on building a relationship with a software development agency.

Questions to ask yourself before you work with a software development agency

Working with a software development firm can solve a lot of headaches. But it’s unwise to think that all you have to do is find an agency, brief in your project and sit back.

The most successful partnerships between agencies and companies, no matter how small or large they might be, happen when both sides are clear on their expectations. The way to gain that clarity is by asking questions and drilling down on the answers. By the end of this due diligence exercise, you’ll know for sure if you’re ready to outsource your software development requirements.

  • What is my budget? Money. Money. Money. It all starts with budget! Often, it’s more cost effective to work with an agency than to hire your own in-house software engineers. While the attraction of spending less to develop your product is understandable, don’t let price be the only factor you consider. Neither lower nor higher rates indicate the level of quality you can automatically expect. Also think about whether you’re planning to outsource one piece of work or whether this will be an ongoing part of your business. Get to know the agencies you’re considering working with and consider budget within that broader framework.
  • Do I have a team who can work on my idea? Working with a software development agency can take two forms. Sometimes a business already has in-house resources but require extra hands on deck, and sometimes there are no software developers within the business and outsourcing to an agency is the most sensible option. You’ll gain a more realistic understanding of how many people you need to fulfil your project once you’ve completed an initial scoping exercise.
  • Is this my area of expertise? Whether you have employed engineers already or not, it’s not always a given that the project you have at hand is their (or your) area of expertise. One software project is not the same as another. For example, developers who specialise in enterprise-software may have zero skillset for developing apps. Get really clear about the expertise you need on hand to build your project. Often it makes sense to bring on outsourced teams to fit with the specific technology and development requirement unique to your software idea.
  • How aligned is my software development project with my core business?  When you decide to embark on a software development project, it’s necessary to take a long and hard look at how the project will impact on your overall business. Can your business sustain the effort and resources needed to see the project to fruition?

While outsourcing can be the answer to building a proof-of concept or MVP as quickly and cost effectively as possible, it’s a good idea to ask yourself whether you’ll need to bring the skills required in-house at some point. It’s not always necessary to do so, but it’s worth taking a longer-term view of the software project that only its build stage.

I want to outsource. What do I do next?

That’s great news! Getting to the point where you’ve decided to go the software development outsourcing route indicates a fair amount of critical decision-making in itself and is the first step to getting your project off the ground.

Now is when expectations, both yours and an agency’s, need to be identified and very carefully managed.

How to work effectively with a custom software development firm

Your software development agency needs to understand your brief fully. At Netfully, we place huge emphasis on building a partnership with our clients. Thanks to this approach, we spend time getting to understand exactly what outcome a client wants and we ask a lot of questions to build that understanding. Effective communication is key and any company who wants to work with software projects outsourcing companies needs to accept that you need to prioritise communicating with the agency you work with.

One of the early stage considerations to decide on before your app, product or service is build is the technology stack needed. There may be a variety of different ways to build your project, but an effective outsourced software development resource will have enough technical knowledge to propose a solution to ensure your needs are met.

Naturally, we run into our old friend, the budget, again at this point. The development plan you and your agency partner commit to needs budget and timeline figures and projections very clearly marked. This essentially is the roadmap that will get your project from a briefing document to a MVP.

While the course of true love and software development never runs smoothly, a detailed development plan, that takes into account how projects running overtime will be managed and paid for, will resolve a lot of headaches. You’re fully within your rights as a client to expect your agency partner to provide an estimate of how much each step of your project build will cost and how much time it will take.

Even though an agency will be writing the software code to build your project, the intellectual property remains with you once the product is built. This means that you need to understand the code, or at least be able to ensure that a present or future team member can. Ask the lead who is working on your project to document the code and include details of unit tests and integration tests.

Ah, testing. Code needs to be vigorously testing. Automating some of this testing is a way to reduce costs, but remember that some manual testing will need to be done too.  You and your agency need to be clear about which one of you holds the ultimate responsibility for Quality Assurance (QA) testing. Most likely, your agency will offer QA services but get this clarified at the start.

It’s also best practice that your agency will provide a grace period for you to use the software they’ve created once they hand it over to you. Use this grace period effectively to uncover any bugs that need to be fixed, and get the timeline of the grace period clearly stipulated in your contract.

The success or failure of your outsourced software project is going to rest on how closely deadlines are adhered to. Your agency should deliver strictly within the deadlines, but it’s important to get those time estimates right when you first start scoping the project. Time will be of the essence, of course, but setting reasonable deadlines that can be achieved is necessary to achieve high quality work.

If parts of the project are going to take longer than expected, and this can happen due to unforeseen circumstances, it’s expected that your agency will communicate immediately with you. A delay needn’t be too serious if both sides know it’s coming and can plan for it.

You’ll want your agency to still be in touch with you after your product is completed. Ongoing work may be needed, and your partner at your outsourced agency will be the expert on your project’s technical architecture.

Confidentiality is a non-negotiable. Outsourcing a project means sharing some of your company’s business decisions. Your software development agency needs to know how the product they are building fits in with your overall business strategy. Sign a non-disclosure agreement (NDA) to safeguard the confidentiality you need and expect. It’s also worthwhile to consider whether you want to write a non-compete clause into your contract.

Managing expectations between internal and external stakeholders

You may be outsourcing for custom software development but that doesn’t mean that you won’t have internal stakeholders invested in the project.

The role effective communication will play in keeping both internal and external parties involved with the project cannot be overestimated.

Be clear on the skills and experience you want onboard in your agency, and then reassure your internal team members that your project is in safe hands. Your agency has to be allowed to get on with the work without being micromanaged.

We’ve already mentioned a technology stack earlier in the post, but this topic is worth revisiting. Very seldom is software created from nothing. Nearly all software products rely to some degree on libraries or services that are already built. Share with your agency what your in-house team members have already built as an existing technology stack, if you have one. If you don’t, make sure your agency can built the right stack to get your project completed.

3 tips to manage your software development agency

As you get used to software projects outsourcing, you’ll find your own style with how to manage them. However, three tactics can go a long way to working well with your agency.

  • Consistent monitoring is a good idea to help ensure the highest quality possible. This doesn’t mean micro-managing; it means staying on contact with your agency, keeping track of your development plan and understanding as far in advance as possible if any challenges threaten to derail the plan.  
  • Set short-term goals that can be achieved within a few weeks or a few days. Short-term goals help build momentum for the overall project; there’s something enormously satisfying about ticking off items on a checklist, as well as well as provide you with the opportunity to see how your agency works.
  • Set up weekly status calls. It’s likely, and preferable, that you’ll be in contact more than once a week with your agency, but having a formal call scheduled is helpful. A status call keeps the focus firmly on delivering the project in time and in budget.

Asking yourself when to outsource software development is not a question to be taken lightly, but it could be the start of streamlining your business and building an amazing product. Just remember that outsourcing a software project requires a degree of management to ensure its success.