Software development outsourcing is a proven way to reduce project spendings and reach better monetization results. According to Deloitte’s outsourcing research, up to 31% of app development tasks are being outsourced in 2018. That is also said that cooperation with outsource programming and remote design agencies could save as much as 60% of the development budget compared to in-house development.
What is the idea of cooperation with an outsourcing development company? Cost-effectiveness, business efficiency, optimized team management, and consistent round the clock task execution are just a couple of benefits.
From this article, learn how to choose a reliable app development vendor, pick the proper work model, and get ready with tech documentation.
Know What You Want from the App
The essential question you need to ask yourself before diving into an outsourcing partner search is “What kind of result I need on this stage?”. It is impossible to choose the right partner and find out how to outsource app development until you don’t have a clear vision for your product.
Some companies outsource only selected app development tasks (usually very specific ones like UI design or ongoing tech support) and execute the rest of tasks with their regular in-house team. Others prefer to hire an entire dedicated development team from the vendor’s base and wait until their ready-to-use products are ready. In those cases, team management and project legal support are also outsourced.
The best way to get to know whether you require to outsource all programming process only or just a single task, think of those points:
What is the key idea of your future app? What kind of features should it have to meet your tech expectations?
Who are your major competitors? What features and product peculiarities will help you overcome them?
What does your target audience look like? What MVP features are going to attract those people? What kind of design will meet their expectations?
Then, come up with the list of technical requirements concerning your product — a product requirement document (PRD) and the requirements specification document (RS). If you already have some development resources, that is high time to find out what tasks could match existing teammates’ competences.
If you don’t have a team — proceed with looking for an outsourcing vendor and start outlining outsource app development cost.
On this stage it is important to decide on side questions related to your product development:
Are you going to create a native app (iOS or Android), a web app, or a cross-platform product? Learn more in our article iOS vs Android App Development.
What features should be integrated into MVP (product with key features only) and what should full-featured app look like? Learn more in our article How to Build an MVP.
Do you have design references or a particular style (concept) you’d like your app to be close to?
What is your monetization strategy? What kind of promotional campaign you are going to use? Do you have specialists for this task? Learn more in our article How to Monetization Your App.
Does your product require ongoing tech support?
Answers will help you to evaluate what kind of specialists you need to have in your outsourcing team and explain to vendors what kind of expertise will match your expectations.
Define Your Criteria for Selecting an Outsourcing App Development Company
Everybody expects its dedicated developers will work fast, professionally (with no mistakes), and ask less money for completed tasks than others. Sounds too general, right? In fact, to be sure your teammates will be just like that from the very beginning, we advise you to keep in mind some points you need to check before starting negotiations on prices and signing contracts.
Mind that such things as a company website, sites with references, and rankings published in professional magazines could help you a lot! Shortlist outsource mobile app development vendors and single freelancers from the general pool found on the Internet and during digital-related events according to such criteria:
Skills and expertise
Check portfolio and case studies to find out if a company had already launched a similar project. If it had not, try to estimate the complexity of tasks executed by the company. Without the possibility to look through the portfolio, ask direct questions via email or phone.
Time zones differences, cultural borders, and outsourcing provider’s corporate culture, as well as particular specialist’s features of character, may influence the efficiency of outsourcing cooperation and result in money loses and delays. Make sure you speak the same language as your partners.
Timelines and budget estimates
Call it estimates experience. Companies are used to promise you extremely short terms for most development tasks. However, when it comes to the real job, deadlines used to be broken.
Sure, it’s impossible to evaluate project terms and budgets precisely before studying its tech requirements. But if you managed to find an experienced outsourcing development company, its managers are likely to tell you more or less realistic estimates from the beginning.
There is one serious argument why in the in-house vs outsourcing software development battle the first option could be more preferable by many. The regular project team is easy to control. It is also more secure to work with specialists directly having access to their hardware.
To avoid information leak, deadlines violation, or the irresponsibility of remote workers, study the way they work in advance. That will be an advantage if they use the same management methodology as you do.
What do other clients think of their cooperation with your potential outsourcing vendor? Check not only corporate websites where references could be edited and posted in a favorable order but also unbiased third-party resources. And don’t hesitate to ask your provider’s clients directly using their official contacts.
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Search and Shortlist App Developers
Choosing an outsourcing agency is not a short-time task. It may take months and hundreds of dollars to find a reliable partner. That’s why we advise you to foresee a long development preparation process and include those spendings into your budget.
The second step after you find out what project tech requirements you have and what criteria your developers should fit into, create a shortlist of companies you’d like to interview or negotiate with.
Long-term cooperation requires a special attitude to outsourcing provider search as it is alway less costly to find a good one during the preparation period then switch partners in the middle of the process.
If your project is huge, split provider search into two steps. On the first one, study the pool of all existing companies that can cope with your tasks and are likely to match your criteria. Then, create an outsource app development providers shortlist. Use the Internet to find basic information about them. Read references and check rankings on services like Clutch, Tech Reviewer, The Manifest, GoodFirms, or just Google “outsource app development company”.
Another great idea is to look for potential partners in professional conferences and public discussions. Companies whose employees used to participate in professional events are more likely to value their reputation and have a better work attitude.
In-house vs outsource? If you want your offshore workers to perform better than in-house ones, make sure that you’ve checked such points before signing documents:
Tech and design quality of the company’s website
The number of dedicated candidates to choose from (must be wide)
Top experience area (great if it is your field)
Positive references (pay attention to communication issues)
If you need just a couple of specialists (not the whole team) and your budget is not that big, consider avoiding huge providers and concentrate on services to hire freelancers and professional events where you could pick a professional with rare expertise. In this case, shortlist events and services first and then try to act on the situation.
Sometimes, it is better not to hesitate with interviews as experienced freelancers could be hunted by competitors. Platforms for checking freelancers — Toptal, UpWork, Codementor, and Gigster.
Choose the Perfect Mobile Development Outsourcing Agency
So now you have a shortlist of companies or experts you’d like to work with, what’s next? The second step is to conduct an interview and to choose the best option among them. Our advice is to visit vendors’ offices if it is possible and to speak with potential partners. The idea is to check if they can solve your particular issues and if yes to agree on the price of such a service.
There a few steps you could follow to make the process structured and do not lose important details:
— Call your candidates
Tell them your basic requirements and check the information you’ve found through the Internet or with the help of other resources that made you believe those candidates are suitable for your tasks. Then, ask them for CVs of particular employees you may work with. Finally, agree on a specific date and time to conduct a face-to-face interview in the office or with video chat tools.
— Visit the office or proceed with a video interview
That is an essential part of the selection process. It should result in your final decision as to cooperation with the candidate. Study CVs first and prepare questions to clarify if potential remote workers have soft and hard skills necessary for effective cooperation (communicativeness, sense of commitment, English-speaking skills, work attitude, etc.).
That is also possible to provide your candidates with test tasks. Those pieces of work could be paid. You may ask them to prepare estimates or be ready to discuss tech issues.
— Hard and soft skills evaluation and your decision
In several weeks (or days), give your candidates feedback as to their tests and interview. That is a good idea to compare your outsource agencies and teams, evaluating their skills with points and creating your ranking. On this point, you should know how to outsource app development with particular partners (terms and budgets).
How to Choose Outsourcing App Development Model
Dedicated development could take various forms. Outstaffing and outsourcing are the most popular of them. Deciding on the vendor or experts you are going to work with, choose the form of cooperation thoughtfully.
Outsourcing app development remains cooperation with an entire team or single expert where they should deliver you the end product according to the project timeline.
You provide them with tech specifications and other requirements and agree on payment periods. Their responsibility is to arrange the process and give you what you want. At the same time, there are several best countries to outsource software development such as Eastern European ones, where high-quality development is not that overpriced as in the US or UK.
Pros of outsourcing — low spendings, good development speed, fewer management issues.
Outstaffing means that you hire remote developers and other specialists and make them a part of your regular team. Outsourcing could involve dedicated team relocation and outstaffing is based on remote work only. Here, legal issues and project management are on you or an outstaffing company that provides workers with office space also. Outstaffing teams work as your regular team and your cooperation doesn’t finish when the project is over.
Pros of outstaffing — full control, no office issues, lower spendings compared to hiring a team to your office and working with the outsourcing team.
How to Choose Outsourcing Pricing Model
Outsource web application development may be priced in different ways. But what is the difference? Work reporting style, the level of management, and payment terms are the answer. Choose one according to your app type, existing resources, tasks, and timelines.
Time and material model
The idea is you pay for the end product only or after the development process reached the particular goal. In most cases, this pricing model means that you give your dedicated development team project requirements and then get the final ready-to-use solution. Your development partner estimates your tasks in specialists it needs to involve in the process and calculates how many hours they should spend to complete those tasks.
The time-and-material agreement is connected to the entire product development, and if necessary another contract as for further tech support could be signed.
Mind that your final goal should be defined very precisely, so choose this option only if only you’ve got a clear vision of what you’d like to have a result.
As a rule, the payment according to such a cooperation model is made half and half before the official development start and after everything is completed. In the case of tasks that require more than a month, providers usually split payments into months.
If you still can’t find the answer who is your leader in in-house vs outsource development opposition, although you define your tasks fully, the fixed-price model could be a good idea for you as it will save your money.
In this case, you pay a fixed price for the whole period of remote experts involvemed in your project. The idea is to receive concrete results being sure how much it cost.
The fixed-price model is not flexible when it comes to ongoing management. Use it if you are sure about tech requirements and have a clear vision of your future product. Note that agencies would agree on the fixed-price model if only the task is small and clear.
What Are the Risks Involved in Outsourcing and How to Tackle Them?
Outsource app development is not that risky if you’ve got a clear vision of what result you’d like to reach, work with a reliable service provider, and have enough time to check ongoing development issues to be sure your project is on the right rails.
At the same time, the market remains changeable, your vendor could have another project besides yours, and there is always someplace for human-factor mistakes. So how to outsource app development with minimum risk? Here are some most common risks and tips on how to avoid them:
— The vendor appears to be not competent enough
As a result, the project may be underestimated in terms of costs, timelines, and expert competitions which means you’ll have to pay more than it was expected. In some cases, there could be a need for changing service providers.
How to overcome? Be attentive to the interviewing stage, have a look at the provider portfolio and try to keep your tech requirements detailed. If you don’t have an in-house digital department, it is cheaper and less risky to outsource the whole development process including QA and deployment.
— No ongoing quality checking
The quality assurance issue is essential while outsourcing labor. That is necessary to check development quality unstoppably till the very end of the project otherwise you may face serious failures on the deployment stage.
How to overcome? Agree on regular quality tests with your vendor and assign ongoing QA tasks to somebody in your office. That is also a good idea to have a bug tracking algorithm and have constant access to it.
— No proper communication
Communication means everything to outsource projects. Cultural borders, time zones differences, communication skills of dedicated experts, poor English speaking skills could cost misunderstandings between you and the service provider. It is also hard to manage a project and monitor their progress without having a common language with your partner.
How to overcome? The first way is to set up a communication plan with call dates and time. The second way is to hire nearshore or onshore outsource mobile app development team (from your time zone or country). And the less costly and risky option is to have a dedicated project manager in your outsourcing team. This person will monitor progress and report it to you directly.
— Lack of security and intellectual property risks
Your product idea or details could be sold to your competitors or other companies. The product might have user data security vulnerabilities or there could be a certain risk of losing product data at all. Also, providers could use software without a license or proper authorization or left a possibility to influence code after their tasks were completed.
How to overcome? Make sure that code ownership will stay yours after deployment and create an appendix to your contract where security restrictions and policies will be mentioned. That is also important to develop an algorithm of knowledge transfer from outsourced experts to your in-house team.
How to outsource app development? Since outsource cooperation is one of the best ways to attract the best international experts, save time and development costs, as well as manage the project with fewer efforts. At the same time, the work outsourcing agency has several hidden risks such as communication, management, and QA failures, wrong time and money estimates, and risks of commercial data losses.
There is no 100% guarantee for anybody to avoid all outsourcing risks, however, with a thoughtful approach to the selection of the development provider and management commitment, one could reach fantastic results.
App complexity and area, existing resources (in-house team and budget), the level of control you’d like to have over the process, and preferable timelines are basic criteria that will help you to find development partners and create a long list of them. To shortlisted candidates, evaluate their professional ranking, portfolios, major expertise, references, and terms of cooperation.
Tech documentation is another aspect you need to consider. That is impossible to work out a good product without project guidelines, tech specification documents, and security regulation terms. Outsource programming with ongoing quality monitoring from the in-house party will also bring you significant results.
Outsourcing refers to the process of transferring an aspect of the company’s operations to a third-party firm. This may occur within the same country or result in a cross-border transfer of work. Additionally, the outsourcing may be permanent or linked to a fixed-term contract for the performance of services.
A company offshores its operations when it transfers them to another country to achieve certain benefits, such as cutting costs, reducing its tax burden or being able to ship products more easily to market. The decision to offshore does not necessarily mean that the work will be performed by a third party. While that can happen, the company may also choose to maintain direct control of its operations in another country.
Offshoring means getting work done in a different country. Outsourcing refers to contracting work out to an external organization. Offshoring is often criticized for transferring jobs to other countries. Usually companies outsource to take advantage of specialized skills, cost efficiencies and labor flexibility.
Outsourcing is a strategy by which an organization contracts out major functions to specialized and efficient service providers who ultimately become valued business partners. In some cases, outsourcing involves the transfer of employees from the company to the outsourcing company.
A striking example of personnel outsourcing is call centers in large organizations. Keeping your own staff of managers is unprofitable - it is necessary to provide jobs, equipment, and comply with safety requirements.
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