Outsourcing Software Development: How Can Start-Ups and Enterprises Make It Successful

No matter what type of business you run, a start-up or an entrepreneur, outsourcing your software development is a critical aspect of your business decision. You should consider various factors before choosing the right company for this task, especially when building software products at start-ups.

Following are a few steps to take into consideration when outsourcing software development for start-ups. These steps will help mitigate the risk factors and help build a good business relationship with the company you partner with. 

• Pricing/Budget Structure: Before you approach any company for outsourcing your software development, it is important to have a financial plan ready for at least the next 2-3 years. An important factor in this is that you don’t get too stingy on this in saving money and reducing the budget. You need to partner with a company with good experience, and that has professionalism. So, the key is to invest well and invest right. You don’t want to be in a situation where just because you wanted to save some money, you go for the cheapest option and then have to throw out four months’ worth of code and start from scratch due to a lack of quality. Don’t choose a mediocre company just for a lower rate.

• Background Check: It is always a good idea to first look into its history and previous track records, precisely their cooperation with other startups. Good firm, and Clutch is a good place to get genuine reviews from past clients. Review testimonials of a company are something you should never compromise on, and hence you should always know the history of the company you are hiring. There are two areas which you should specifically keep a check on:
  • Architecture/Code: ask someone with knowledge in this field to evaluate the codes used by the company. You need to understand why they made certain decisions in the past.
  • UI/UX Design: this you can obtain relatively quickly by looking at their portfolios to look into the development and design quality. 

• Flexibility: working with a company that offers flexibility in terms of time and team size will be to your advantage. Test them out first by committing to a small sprint and deliverable, and then if you find that it works out well, commit to a contract for the next few months. Software development can keep changing throughout the process, and hence you need to work with a company that is willing to evolve and adapt to it. By first committing to a shorter period, you can truly assess whether you work well with the company or not and whether they work well with you.

• Technology: this is a technical decision that will impact your budget and product stability. It is ideal if you find a company that is specialized in a particular technology stack. Software development companies often propose that they work with all technological stacks, but this could also show that they are not specialized in any one particular type. Find a company that is specialized in a specific technology, for example, JavaScript Framework. 

• Proper Structure and Roadmap: the company or agency your hire should be straightforward with their process. They should have a solid structure in the plan of how they will achieve your goal and be transparent about the process. There must be communication beforehand regarding the details of the project. 

• Involvement/collaboration: during your short sprint with the company, look to see whether the software development company is just finishing the minimum work required or getting involved with the project. Also, see whether they agree with everything you say or challenge your idea and suggest new ones. If they just simply agree with everything you say and finish the minimum amount of work agreed upon, then it showcases they aren’t as committed to your work as you would hope. When a company can say “no” to a particular idea of yours and suggest new ones, it shows that they are talking from experience and demonstrating their level of involvement in creating the best possible product for you. 

• Transparency/Communication: Fluency in communication while outsourcing software development is extremely important. It is through this, the company properly understands your requirements, and you understand whether you work well with this company or not. This will have a direct implementation to the success of your project as you will be able to understand the proper scope and risk factors involved with the project. 

• Dependency: there are two kinds of “lock-in” to be aware of- 
  • Code Lock-In: it is crucial to see whether the software development company follows the industry standards while developing the code. This helps in the future in case you want to move on to another company. If they do not follow the industry standards, it will be difficult for any other company to understand the code. You must look into this point when you are doing a background check on the company.
  • Legal Lock-In: if in the future you can work with another company or even move to insource the work, the IP must be on your side when the project is done. For this, you must ensure that you have a suitable contract that would allow you to take the code and give it to another company. Hence before signing any contract, first check whether the IP is entirely yours or if it belongs to the company developing software. 

In short, outsourcing tech, especially software development, can be a bit complex, but it will not be so daunting with the right company. The right partner will not only be suitable for your budget but also maintain your timeline.