How to successfully outsource software development?

Today in our article we are going to look at the benefits of partnering with a software development contractor. Recall that each project has its own unique set of complexities, cost barriers and expectations, and the cooperation between the customer and the supplier is built individually. We do not give any specific formula, but try to identify the criteria for finding your ideal IT services provider.

Outsourcing and the situation on the market

Outsourcing is a ubiquitous practice that sooner or later is on the minds of most business owners. They weigh the pros and cons of outsourcing and outsourced development to determine the best course of development for a host of processes: marketing, e-commerce, operations, administration and other business processes that don't require manual intervention. Outsourcing goes far beyond subcontracting. It is sustainable and scalable. Through outsourcing, customers increase their profit potential. Companies around the world are finding that outsourcing software development services to companies with expertise and experience in the required industry is sometimes much more profitable. Such companies spend their resources more economically and, based on their experience, can offer top-notch IT solutions. Let's delve deeper into the ideology of conscious outsourcing and take a closer look at why outsourcing a software development team is becoming more valuable than insourcing development services. And we will also try to shed light on some of the "rough edges" in making such a decision, based on our 10 years of experience.

Why do businesses choose to outsource?

Staffing hunger

This is one of the common reasons for outsourcing, is that companies have difficulty finding qualified personnel to handle individual jobs and projects. In 2022 we were approached by a large chain retailer with a complicated task that needed to be implemented in a tight schedule. The customer weighed the cost of recruiting, onboarding, training and retaining staff, which led them to decide to outsource their development needs to the Svitla Systems team, rather than trying to bring in 16 employees with different backgrounds and levels of expertise from the labor market or other internal projects. The team required a total of:

• 1 IT solutions architect
• 1 business analyst
• 1 systems analyst
• 1 UI/UX designer
• 2 software testing engineers at Middle level
• 10 .Net developers + team lead

By choosing to outsource, the customer has struck a balance between the operational structure and business goals. He approached the long-standing dilemma of "insourcing or custom turnkey software development" with logic and a thorough analysis of the advantages and disadvantages.

Lack of resources

Staffing may be in place, but the volume of tasks requires more manpower, and that requires strengthening the team. Then it is worth looking for partners who will undertake the process of creating the service.

Efficiency

Lots of studies (e.g., an Oakland University of Technology study) confirm that with an 8-hour workday, in-house employees are only 3 out of 8 productive. An external developer, on the other hand, is motivated to demonstrate an hourly result because it is governed by the SLA and the customer's pre-agreed budget.

Manageability and transparent budget

Customer manages his budget by choosing outsourcing. As a rule, the works are carried out at a fixed cost. The exception is if there is a need for further revision or technical support, but this is discussed separately.  

Disadvantages of IT outsourcing

Often companies are in no hurry to take advantage of such a useful and profitable service for fear of:

• Loss of permanent control over the information infrastructure of the enterprise;
• the possibility of disclosure of confidential information and personal data;
• getting dependent on the provider of IT outsourcing services

As a result, heads of companies are often satisfied with formal control over the work of the internal technical department, while incurring additional expenses for its maintenance and having to lose additional funds in case of unforeseen situations.  

How to Choose a Good IT Service Provider?

The greatest risk lies in the vendor's misunderstanding of the essence and requirements for development. A frequent case is when a customer saw himself one requirement, but after our actualization it was specified, and it had a positive effect on the final picture. In essence, we get a symbiosis, not just doing the job according to the TOR. So how do you find your IT service provider?

Your vendor:

1. Conducts a free initial needs analysis. Will help formulate the requirements for your IT project, and only then estimate the timing and scope of work.
2. Practices a transparent process of cooperation, and it is easy to control. Works in your ALM system or transmits data from your ALM system, so you can see daily in real time what is being done and when it is due.
3. Provides the developed software with documentation and video instructions, adapted to the language of the customer.
4. Flexibly builds a team and toolkit to suit specific tasks and project costs. Quickly and easily integrates with the customer's processes and cross-functional teams. Takes into account technological features of projects to ensure an optimal balance of cost, speed and quality. Ethically approaches tool selection, "doesn't put you on the hook"
5. Experienced in full-cycle software projects: from development requirements to implementation and support.
6. Promptly organizes self-diagnostics, controls the state of developed software, and implements integration with the existing monitoring system.
7. Uses and adapts the developments, implemented in other projects, to save the Customer's time and resources.
8. Able to organically consolidate data from multiple channels into a single source.
9. Can implement IT solutions with a large number of integrations and a variety of execution options.
10. Ideally has partner statuses of vendors whose resources he is inclined to use.
11. has experience in learning what he/she does. According to the ALM ranger model, this index indicates the maturity of most of the IT-service provider processes.
12. has subject matter expertise, and accelerates time-to-market, leveraging the work done in other projects.
13. The company's specialists and management have profile certificates On the other hand, there are known cases when well-known specialists not only do not have a single certificate, but even do not have a resume. Why? They are known anyway. They are literally passed "from hand to hand".
14. May not be able to advertise their clients and cases in full. That's fine. Having an NDA shows that the vendor participates in serious projects, and cares about the confidentiality and safety of his clients, more than his PR, because he knows: everything is connected ;

 

Conclusion

You don't need to buy a boat, maintain it every year and build and maintain a crew for one-off participation in a regatta when you can hire a crew of professionals with all the necessary equipment and level of skills for a fixed term. What you should pay attention to when choosing an IT outsourcing service provider:

1. A pre-project survey allows you to discover new bottlenecks in business processes and development processes, and sometimes to look at an established situation from a different angle and discover new opportunities.
2. The right IT service provider can help you find several target architectures, which will solve your problems in the best way.
3. saving time on recruitment and/or training period, because the vendor has brought in a cohesive and reliable team of industry experts to outsource.
4. A digital product complies with all the Customer's requirements and is put into operation in exactly the specified time, except for some non-standard situations, when the Customer decides to change his requirements for the project drastically near the end of cooperation :)
5. If the supplier of IT services is an experienced one, outsourcing gives a quality result, which is regulated by the article of clear and controllable expenses. They, in turn, are difficult to predict when creating a complex technological product insourcing.
6. By choosing outsourcing, you save money because the supplier works hourly to achieve your goal, following an agreed-upon schedule of work and costs.