Product development outsourcing has grown in popularity over the years, with 74% of companies relying on software development partners to handle all or part of their development projects.
Companies that outsource some of their software development hire app development teams and freelancers to work with their in-house teams. Others hire a full-service, dedicated development team to handle everything from design to development to Quality Assurance, relying on their partner to manage the project at every stage.
This blog post provides an honest look at the benefits and risks of outsourcing, along with a step-by-step breakdown of how to mitigate risks, get the most out of your outsourced team, and produce high-quality software with the functionality your users demand.
Is It Better to Outsource App Development?
Since we’re an app development agency, you might expect us to push outsourcing as the only way to achieve your business needs. However, the truth is that while outsourcing has many benefits, it comes with its share of risks.
Benefits of outsourcing app development
There’s a reason so many companies are adopting IT outsourcing services these days. It offers a whole host of benefits, including the following.
- Cost savings: Outsourcing tends to be more cost-effective than in-house development for several reasons. First, in-house employees come with hidden expenses (e.g., hiring costs, benefits, payroll taxes). Second, outsourcing companies in places like India and Ukraine come with reduced labor costs.
- Access to specialized expertise: Companies hire software engineers for in-house app development teams based on day-to-day coding requirements, but nobody is an expert in everything. Working with an outsourcing partner can help fill those skills gaps, assuming you choose the right firm with the appropriate tech stack.
- Accelerated time to market: Hiring an outsourcing partner can help you develop software faster, enabling a quicker time-to-market that comes with a competitive advantage.
- Massive scalability: Adding new software engineers to an in-house team is time-consuming and costly, whereas delegating new projects to a third-party provider is easy and painless. This sets the stage for easy, painless scalability as your company grows.
Risks of outsourcing app development
As promised, we also want to inform you of potential risks associated with outsourcing app development and ways to mitigate those risks.
You’ll notice that these risks are largely preventable if you do your due diligence when choosing an app development service provider. That’s why we provide a step-by-step guide for finding, vetting and selecting the right firm.
1. Language Barriers
Working with companies overseas can offer tremendous cost savings, but only if you’re working with people who can communicate effectively. If an outsourcing partner isn’t fluent in whatever language your team speaks, rework (and extra costs) are inevitable.
Risk mitigation: Have extensive conversations with potential outsourcing partners, not just with project managers but with other team members, to ensure they’re fluent in English or whatever language you use in the workplace. Read the website content as well. If their blog is written in broken English, that’s a bad sign!
2. General communication issues
Even when everyone speaks the same language, communication can be a struggle if a company doesn’t have clear processes for meetings, documentation, and discussing requirements.
Risk mitigation: Ask any potential outsourcing partner about their communication and documentation strategies and the software development methodologies they employ. Are they well-versed in Agile Scrum development or some other methodology you prefer?
3. Timezone disconnects
Certain outsourcing partners are willing to adapt to your work hours if you need it—we do that here at Net Solutions—but others will not. If you need to work with someone synchronously, establish that upfront.
Risk mitigation: Discuss any needs upfront before moving forward, so you don’t waste your time with a prospective partner who can’t meet them.
4. Security issues
Security is paramount; giving your code to an outside team introduces additional risk. It is, however, a fully manageable risk if you properly vet potential partners.
Risk mitigation: Ask prospective outsourcing partners about their security protocols. Look for a partner with a proven track record, plenty of case studies, and client testimonials.
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How to Find an App Development Outsourcing Company
There’s currently a worldwide market of $585 billion for IT services, which means you’ve got a lot of options when it comes to finding an outsourcing partner.
Of course, with such a vast marketplace, it’s easy to get overwhelmed, so we recommend strategically finding a third-party software development team. Here are some common methods people use to find an outsourcing partner.
Online directories like Clutch.co can guide your search and give you a chance to read reviews from previous clients.
Referrals from clients, partners, colleagues, and current employees who have worked with development partners at other organizations can be beneficial. They’ll help you find a talented team they trust.
Issuing an RFP through referral networks or to companies you find through an online search can guide you in selecting a partner. Writing an effective RFP can help you attract the perfect vendor.
Once you’ve narrowed your list of potential partners, set up interviews and dig deep to discover whether each partner is willing and capable of serving your needs.
Important topics to address with prospective vendors include:
- Technical skills and development languages they employ
- Software development methodologies they use
- Approach to planning and managing workflows
- General app development process
- Pricing for various services and developer hourly rates
- Expected timeline
- How the company addresses time-zone differences when working with clients around the world
These tips will help you find talented developers. Now let’s explore the step-by-step process of outsourcing app development.
The Process of Outsourcing an App: Step by Step
Outsourcing web apps and mobile application development requires time and careful planning, but that planning will pay off in the long run. Follow these steps to increase your odds of successful development and deployment.
1. Define your objectives and requirements
Before you even begin searching for an outsourcing partner, it’s important to have a reasonably strong idea of what you hope to accomplish with your software.
This doesn’t mean you must identify all the programming languages your partner will use for product development. We’re not talking about detailed requirements, but it’s important to be clear about the following elements:
- General design and approach to User Experience (UX)
- Your target audience and how you plan to reach and serve them.
Conduct market research to understand your audience and their needs. When creating your project brief, include this data and get input from all key stakeholders.
2. Evaluate your budget
Several factors impact the costs of bringing a software product to the market, from the project’s complexity to its overall functionality. The total number of screens the user can experience is a big factor since each screen translates to labor and time.
If you need to figure out how much to budget for your project, you can chat with different vendors and get price estimates based on your requirements.
Once you’ve chatted with several potential vendors, you can set a realistic budget and decide whether moving forward is worth it.
3. Research app development companies
We’ve already talked about how to find a good development partner. Here are some ways to verify that your prospective partner is the ideal fit.
- Review customer case studies—any reputable firm should have them available
- Read the company’s reviews on Clutch.io and Goodfirms
- Determine how many years of experience your prospective partner has in the type of development you require
- Conduct live interviews to ensure strong communication and language skills
- Ask technical questions to ensure they have the skills to deliver what you need
Choosing the right App development partner is not a decision you should take lightly. Never rush vendor selection, even if it moves the timeline back.
4. Assess the outsourcing model
We often think of outsourcing as something that involves hiring companies on the opposite side of the globe, and that’s often true, but it’s not the whole picture.
While offshoring to distant countries is a common and practical approach to outsourcing, there are other effective models, including onshoring and nearshoring.
Onshoring occurs when companies hire partners within their home country to handle some or all of their software engineering. This can work well for companies planning in-person meetings with their development partners. However, it is usually far more expensive than outsourcing overseas.
Nearshoring takes place when a company outsources to a nearby country, such as a German company that outsources development to a partner in Eastern Europe. This can effectively save money because hourly rates for programmers are lower while keeping all the work in a nearby time zone. On the downside, it usually doesn’t save nearly as much money as offshoring to places like India or the Philippines.
Offshoring takes place when companies outsource to the opposite side of the globe, such as a U.S. company outsourcing to a country in Asia. The time zone difference may present some challenges, but only if your partner is unwilling to adapt to your time zone.
At Net Solutions, we can work whatever shifts make sense for your organization. Of course, sometimes the time difference works to your advantage if you want to have developers working around the clock. We did that for Kitco when we performed QA for their Android app.
5. Evaluate app development companies
When evaluating potential partners, it can be challenging to keep your options straight. That’s where creating a scoring system comes in handy.
Build a weighted criteria matrix in an Excel spreadsheet that lists all the qualities and skills you’re looking for in a partner, and rank each prospective partner accordingly. This will give you a clear idea of which outsourcing companies might fit your needs.
However, remember that the winner shouldn’t simply come down to the score they receive. One team might score higher but fall short in areas you didn’t choose to evaluate.
Plus, there may be some intangible elements, such as the rapport you feel and whether your gut tells you you can trust them. These are not quantifiable metrics, but they matter, and you should consider them.
6. Determine intellectual property rights
Be sure to put plenty of time and thought into creating contracts, and don’t be afraid to speak with an attorney who will ensure that you will retain all intellectual property rights once you’ve paid your invoices in full.
Protect your intellectual property rights by:
- Writing thorough contracts
- Using Non-Disclosure Agreements (NDAs)
- Vetting potential vendors
7. Finalize the contract and NDA
Review all contracts carefully, including Service Level Agreements (SLAs), Non-Disclosure Agreements (NDAs), and any others you’ve written to govern the nature of your relationship.
Once again, don’t be afraid to have your attorneys look over these documents to ensure that your interests are fully protected and that there is no legal ambiguity in the agreements you’ve forged.
8. Collaborate and communicate effectively
Effective communication is essential to success in any software development project. When working with an outside team, setting up systems that support regular, clear discussion and strategic alignment is even more important.
Here are some tips that will help ensure a successful partnership.
- Use project management tools like JIRA and Basecamp to provide a central hub for ticketing, communication, and project updates.
- Set up a dedicated point of contact between your organization and the outsourcing partner’s point of contact.
- Set up regular meetings via video chat.
- Set realistic expectations for feedback, turn-around, and addressing issues.
Teams that communicate regularly can ensure that everyone is on the same page—ultimately resulting in a product that meets or exceeds your expectations.
9. Monitor progress and Quality Assurance
Establish a plan for monitoring progress through the software development process and clear guidelines for your approach to Quality Assurance (QA).
You can ensure progress and quality by setting up a plan for:
- Reaching milestones
- Reviewing code
- Testing and fixing bugs
- User Acceptance Testings (UAT)
At Net Solutions, we take an Agile, DevOps-driven approach to QA. And if you’re in a distant time zone, our testers can find errors and produce complete reports while your in-house team sleeps.
Whatever approach you take to QA, it’s important to establish clear rules for feedback, bug fixes, improvements, and testing.
10. Deployment and ongoing support
Releasing software into the wild is not the final goal—that’s just part of the process.
If you’re releasing a Minimum Viable Product (MVP), you’re going to get feedback from users that will immediately shape the new features you start to build for additional releases.
Even if you’re not taking an MVP approach, there will still be bugs to fix, security patches to update, and features to add. That’s why establishing a long-term partnership with a trusted outsourcing firm is so helpful and why choosing the right partner upfront is so critical.
How Much Does Outsourcing Mobile App Development Cost?
Outsourcing mobile app development rates can vary considerably based on various factors, from the functionality you’re looking to achieve to the location of the development firm building the app.
We’ve written a complete guide covering the cost of software development that you can reference, along with a breakdown of software development rates worldwide.
The following factors influence software development costs:
- Project complexity
- Total number of screens that users encounter
- Desired features
- Overall functionality
- Design requirements
- UX requirements
- Third-party integration
- Ongoing maintenance
Taking a Minimum Viable Product (MVP) approach can save money since you won’t spend money developing features that customers don’t want or need.
Instead, you can create a functional product, introduce it to a market segment, and let user feedback drive your future development.
How Long Does Application Development Outsourcing Take?
Quite a few factors are at play when assessing how long it will take to develop a software application.
These factors include:
- Project complexity
- Setting requirements and scope
- Market research and analysis involved
- Design requirements and iterations
- Client feedback and revisions
- Quality Assurance and testing
You can take certain measures to expedite the process, including:
- Providing comprehensive requirements upfront
- Ensuring timely feedback and approvals
- Using methodologies like Agile Scrum to keep everyone on track.
Once again, proper planning, solid communication, and a clear strategy make everything easier. This results in a more cost-effective solution that reaches the market faster.
Looking for an App Development Partner?
Net Solutions has been building powerful, award-winning software for over 30 years, and we’ve worked with global leaders like Euro Car Parts, IMG, and many more. We’ve also built MVPs for small startups—and everything in between!