Software Development Outsourcing | Steps, Cooperation Models, Required Roles, Success Tips

In IT since 1989, Vertscend helps businesses with fast, quality and hassle-free software development.

Software Development Outsourcing: The Essence

Outsourcing is one of the reliable ways for a businesses to develop software at a lower cost and effort. Software outsourcing entails the following benefits and risks:

Software development outsourcing advantages

Reduced hiring efforts and costs.
Quick project start.
On-demand access to required resources.
Optimized managerial efforts.
Easy team scaling up and down.

Software development outsourcing disadvantages

Less control over the project.
The risk of communication gaps.
The risk of security breaches.

How to Set Up Software Development Outsourcing

The outsourcing process setup will take from several days to several months. It will depend on the chosen outsourcing model, the maturity of the vendor’s processes, your readiness for such kind of initiatives, and more.

Step 1. Decide whether to outsource

A software development outsourcing initiative should start with a feasibility analysis. It can include the following steps:

Determining the stumbling blocks in your existing software development process.
Deciding on a part(s) of your software development project to outsource.

Vertscend recommends

Software maintenance and testing are usually the easiest project parts to outsource, while software requirements gathering and design are the most difficult to outsource.
When outsourcing software coding, make sure software can be safely divided into independent modules.

Comparing Total Cost of Ownership (TCO) of in-house vs. outsourced software development.
Selecting the fitting model of software outsourcing services:

Team augmentation

A vendor provides you with remote professionals for you to manage directly. You can get an exact number of experts you need, from 0.5 FTE to 100+ FTE.

Dedicated team

A vendor offers a dedicated team to work on an outsourced project or a part of the project, sharing risks and responsibility for the quality with you and/or your other vendors. Team management mostly stays on the vendor’s side: their Team Lead/PM reports regularly to your PM on the work progress.

Full process outsourcing

A vendor takes over the whole development process, with full responsibility for team organization and management, quality of the development results and accompanying risks.

Step 2. Select the software outsourcing company

When shortlisting potential vendors, consider the following factors:

Experience in outsourcing software development services shared by a vendor on their website, in case studies, etc.
Vendor collaboration experience shared by third parties in testimonials, reviews from independent research agencies, etc.
Location (onshore, nearshore, offshore), time zone differences.
Language and cultural proximity.
A vendor’s development infrastructure (hardware, network, bandwidth, etc.).
The maturity of project management, quality management, and security management processes (e.g., proved by ISO 9001 and ISO 27001 certificates).
Compliance with industry standards and regulations you need to follow (HIPAA, FDA, PCI DSS, etc.).
Pricing options offered (fixed price, T&M).
Software maintenance and support options available.

Note

Vendors offer a variety of support models, for example, free/paid post-implementation software maintenance for a certain period, free/paid post-implementation software maintenance and free/paid post-implementation support (L1, L2, L3, L4 support in different combinations) for a certain period, free post-implementation software maintenance and support and paid software support and evolution for the required period, etc.

Step 3. Set up the outsourcing process

Project manager

To outline a project roadmap, manage the software & AI development life cycle, and foster collaboration between business and tech stakeholders.

Business analysts

To analyze business and user needs and translate them into technical requirements for software, AI, and integration between them.

Data scientists

To cleanse data for AI and engineer features; to build, train, test, and validate ML models. Domain experience is preferred.

Specifics of Software Development Outsourcing Models

Staff augmentation

Pros:

Easy resource scaling up and down to adapt to changing project needs.
Quick access to specific skills.
Direct supervision over the development process and team productivity.
1-2 weeks for onboarding (if the required resources are readily available in the vendor’s pool).

Cons:

Full responsibility for project-related risks is on your side.
Onboarding and managing efforts are on your side.
High risk of communication gaps and collaboration difficulties.

Dedicated team

Pros:

1-2 days to start (if the team is pre-assembled by a vendor and the team structure just needs to be reasonably adjusted to your project needs).
A vendor provides a Team Lead/PM to coordinate the work of the outsourced team so that they need little/no guidance from your side.

Cons:

Risks related to vendor selection.
Project team coordination and project risk management can be still partially on your side.
In a newly gathered team, people may underperform during the first 2-4 weeks until the group turns into a real team.

Full process outsourcing

Pros:

Minimum management efforts on your side.
Guaranteed quality of project deliverables and timeline alignment (with penalties for breaching them).
Access to a vendor’s established development processes.
Tackling project-related risks is on a vendor’s side.

Cons:

The longest setup (up to a month).
The highest vendor risks.

Have a Complex Dev Project with a Tight Deadline?

Vertscend can help deliver it on time and of top quality.

Software Development Outsourcing Costs

The software development outsourcing cost is defined by the following factors:

Specific cost factors for full process outsourcing:

The maturity of the vendor’s outsourcing processes (mature project management and well-established development processes help avoid rework).
The vendor’s QA process specifics (proactive testing lowers QA costs while fixing bugs in production makes QA more expensive).

Vertscend Software Development Outsourcing Offering

With 32-year background in IT and 700+ IT experts, Vertscend provides flexible software development outsourcing services for businesses to deliver software solutions cost-effectively and fast.

Staff augmentation

Developers and architects well-versed in Java, .NET, Python, Go, PHP, and more (including legacy and retiring languages).
Wide pool of roles for outsourcing: testers and test automation engineers, DevOps engineers, system and integration architects, data architects, data scientists, support engineers.
Flexible cooperation terms: 1 month – 10 years.
The exact number of qualified professionals you need (from 0.5 FTE to 150+ FTE).
Capabilities in advanced technologies (AI, IoT, Big Data, VR, computer vision), modern architectures (cloud-native, serverless, microservices) and development approaches (CI/CD, test automation), and industry-specific knowledge.

LEVERAGE EXPERT IT SKILLS

Dedicated teams

Fast ramp-up of the outsourced team (2 workdays – 2 weeks).
Experienced PMs and Team Leads to manage distributed teams.
Full assistance in establishing a collaboration environment and project progress control.
Strict compliance with agreed quality KPIs.
Easy team scale up or down.
1.5-2x faster development due to high proficiency and use of best coding and time management practices by our developers.
20-50% project cost reduction due to the agile approach, CI/CD, and reuse of readily available components.

HIRE A TEAM

Full process outsourcing

Full-scale Project Management Office (PMO) to handle projects of any complexity.
Industry-focused consultants (manufacturing, retail, healthcare, logistics, professional services, telecommunications, and 24 more) to help bridge business and technology.
Defining the business and software development goals you want to achieve and taking the overall responsibility for the ‘how-to’ part of the development project.
Tailored communication with each stakeholder.
Continuous granular monitoring of project progress, regular reporting.

Have any questions?