April 25, 2024

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Advice on Successfully Choosing an Offshore Partner for Outsourcing Software Development

5 min read

The thought of outsourcing software development to an offshore development company may be daunting. The following tips may make this decision easier for you as you can check whether potential software development outsourcing partners meet the criteria listed below.

One of the most important factors is the quality of development. Most companies seek stable, reliable long-term relations and demand the same high level of quality that their own in-house developers would produce. However, in reality, a new offshore partner always presents the risk of exactly the opposite. From my own experience as the CEO of an outsourcing software development company, which has been operating for many years, I know that it is very difficult or even impossible for a company (for instance, an IT company in Europe or the United States) to be absolutely sure that a potential new partner in India, China, Russia or elsewhere can really deliver top quality. The following advice, however, might help you build successful business relationships with offshore development companies.

The first step should be to research the potential company online. Check the year of their domain registration because sometimes offshore companies state on their website that they have about 10 years of experience, but strangely their domain was only registered the previous year. It is also important to divide all providers of offshore outsourcing software development into two categories: developer groups and legitimate companies with a brand name and reputation. You should be aware from the start who you are working with. Developer groups are unstable and often not very reliable. Their expertise is difficult to verify since the quality varies from one individual developer to the next. If a good developer leaves the team in the middle of your project, deadlines and development quality are likely to be impacted significantly. Developer groups charge less for their services than actual offshore outsourcing companies, and though such groups might work well for small-scale projects (ranging from USD 1,000 to 10,000), they often disappear unexpectedly. Developer groups tend to advertise themselves as reliable and qualified with many years of work experience. If you only have small projects to outsource, I do recommend looking into working with a group of developers. If you do your research well and choose the right group, this can indeed be a very cost-effective option.

However, if you are looking for someone to develop a larger project with a prospective timeframe of three months or longer, I urge you to work with a legitimate offshore company rather than a group of developers. The problems than can result from a developer group disappearing mid-project, not meeting your deadlines, or not delivering the high quality that you need is simply not worth the lower cost.

To minimize this risk, I recommend that you outsource any large projects or long-term development only to large and established companies with a good reputation (good references, big clients, good reputation online, older domain name, etc.). Such companies usually have well-organized software development processes in place and are known to follow modern methodologies and best practices of software development. The most qualified software developers often work in established companies rather than freelancing or working in small groups of developers. When faced with complex projects or unusual tasks, working in a company provides the benefit of always having someone to go to for advice on a specific technical problem. This is only one of the reasons why companies tend to consistently deliver better quality.

Some additional points to keep in mind:

1. If a service provider gives you a price and timeframe for the project but does not include a detailed estimate of the time and costs required for the individual tasks, doubts about the qualification of that particular partner are completely justified. Such a company might not meet deadlines or deliver high-quality software solutions.

2. Development should always include testing. In some cases, testing and bug fixing make up 50 percent of the entire project implementation period. An experienced and professional company knows that extensive testing is absolutely vital in the development of complex projects and puts the necessary QA measures in place.

3. Check the company’s portfolio. I highly recommend finding a company that has already developed projects similar to the one you are looking to outsource. The company that best suits your needs is likely to be one that works in the industrial specialization you are seeking for your project.

Do not make the lowest price your priority. Please keep in mind that you get what you pay for. If a company offers a low price, it may be because they are using junior developers rather than senior or mid-level developers. Another reason may be that you are actually dealing with freelancers or developer groups, who work from home and do not have expenses such as rent for office space, taxes, and other costs that a company generally has to bear.

I also urge you to not rush into a business relationship with a new partner (a policy that I follow myself as well). Start step by step by discussing any issues and details that come to mind and deciding on a model and working style that works well for both parties. Following the abovementioned advice will be sure to help you find an offshore software development center that can be a reliable business partner for many years to come.

Communication is another factor that many clients worry about. Even for people speaking the same language, misunderstandings are a fact of life. The risk of misunderstandings increases exponentially when different languages and cultures, and therefore also different preferences and styles of communication, are involved. Simply having English-speaking contacts at your new Offshore Development Center is not enough. The company should have a system in place that fosters communication by means of the appropriate software, such as issue tracking systems, conference call scheduling, Skype chats, etc. Professional companies tend to be very experienced in setting up effective communication measures.

Last but not least, we have to discuss source code security and intellectual property protection, as this can easily become the most important factor of all. When a company plans to outsource its software development and the software to be developed will be based on existing source code, it is essential that this source code as well as any information about clients remains confidential. For this reason, I do not recommend working with groups of developers if confidential information is involved since these developers cannot ensure serious protection of intellectual property nor is their reputation as important to them as it might be to a large company. For example, as the CEO of the company, I sign NDAs along with all of my developers. I believe that it is the right approach for any company. Please be sure to ask your service provider about their approach to NDAs for all employees.

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