Software Outsourcing Process Step by Step

Software development outsourcing has grown in popularity in recent years for a variety of reasons, including a high-level skill set, time and cost-effective development, a greater emphasis on core company tasks, and so on. According to Statista, the worldwide IT outsourcing industry has already topped $92 billion, with the software development outsourcing industry contributing significantly.

Numerous companies have started to look at outsourcing of software development as a tool for growing their business. With different cooperation models, such as team extension, staff augmentation, and fixed price projects and different pricing models, almost every company can find a model that will best suit their business needs.

Main reasons for software development outsourcing

Lack of in-house developers: If your team is already stretched and doesn't have the capacity to handle an additional project or workload, outsourcing can help you bring in the expertise and software engineers you need to get the job done. 

Lack of technical expertise: If your in-house team doesn't have the specific skills or knowledge needed to complete a particular project, outsourcing can help you access the expertise you need to ensure that the project is successful. 

Cost savings: Outsourcing can sometimes be more cost-effective than hiring in-house staff, especially if you only need a particular set of skills or expertise for a limited time.

Time savings: Outsourcing can help you get a project completed more quickly than if you were to handle it in-house, allowing you to focus on other areas of your business. 

Access to a global talent pool: Outsourcing allows you to tap into a global talent pool, giving you access to a wider range of skills and expertise than you might have access to in your local market. 

If any of these factors apply to your situation, outsourcing software development may be a good option for your business. It's important to carefully research and evaluate potential outsourcing partners to ensure that you choose the right one for your needs. 

If you decide to outsource, before choosing a software development partner, familiarize yourself with the process of the software development outsourcing process itself, which consists of several steps.

1.      Research and evaluate potential outsourcing partners

The first step is to research which potential software development partner is the best fit for your needs. This may involve looking at companies' portfolios, customer reviews, and other relevant information that will help you in your selection.

When evaluating, pay attention to the following:

Experience and expertise: Look for a company that has experience in the specific area of software development that you need help with, and that has a proven track record of delivering successful projects.

Portfolio and customer reviews: Review the company's portfolio to see examples of their work and read customer reviews to get a sense of their level of satisfaction with the company's services.

Communication and collaboration: Effective communication and collaboration are key to the success of any outsourcing project, so look for a company that has a strong track record in these areas.

Price and value: Consider the company's pricing and the value they offer in relation to the services they provide. While cost is an important factor, it's also important to consider the quality of the work and the level of support and assistance the company provides.

Cultural fit: It's important to choose an outsourcing partner that is a good cultural fit for your business, as this can help to ensure a smooth and successful collaboration. Look for a company that shares your values and approach to business.

By carefully evaluating potential outsourcing partners based on these factors, you can choose the right one for your needs and increase the likelihood of a successful collaboration. 

2.     Define the scope of the project

This involves clearly outlining the goals, objectives, and deliverables for the project, as well as any constraints or limitations.

Defining the scope of a project is an important step in the outsourcing process, as it helps to ensure that everyone involved has a clear understanding of the goals, objectives, and deliverables for the project. To define the scope of a project, you should:

Identify the project's goals and objectives. What do you want to accomplish with this project, and what are the specific outcomes or deliverables that you need to achieve?

Determine the project's constraints and limitations. What are the factors that may impact or limit the project's scope, such as time, budget, or resources?

Develop a high-level project plan. This should include a broad overview of the project's timeline, including key milestones and deadlines, as well as a general outline of the tasks that need to be completed.

Identify the project's stakeholders. Who are the individuals or groups that will be involved in or impacted by the project and what are their roles and responsibilities?

Communicate the project's scope to all relevant parties. This should include the project's goals, objectives, constraints, and limitations, as well as the roles and responsibilities of all stakeholders.

By clearly defining the scope of a project, you can help ensure that everyone involved has a shared understanding of the project's goals and expectations and that the project stays on track and within budget.

3.     Negotiate and sign a contract

This typically includes details such as the terms of the engagement, the scope of the project, the payment structure, and any other relevant details. 

Here are some tips to help you negotiate effectively when outsourcing software development: 

Start by understanding your own needs and goals. What are you looking to accomplish with this project, and what are your key priorities? This will help you identify your non-negotiables and make more informed decisions during the negotiation process.

Research the market and potential partners. What are the typical rates and terms for the services you need and what are other companies offering? This will help you understand the market and make more informed decisions during negotiations.

Be clear and transparent about your needs and expectations. Clearly communicate your goals, objectives, and constraints to the outsourcing partner and be upfront about what you are looking for in terms of pricing, timelines, and deliverables.

Be prepared to compromise. Negotiations often involve give and take, so be prepared to compromise on certain issues in order to reach an agreement that works for both parties.

Focus on building a relationship. Negotiations are not just about getting the best deal; they are also about building a relationship with the outsourcing partner. Try to approach negotiations in a collaborative, solution-focused manner and focus on finding common ground and creating a mutually beneficial relationship.

These tips can help you improve your negotiating skills and increase the chances of reaching a successful agreement when outsourcing software development. 

Another important part of collaboration is a well-written contract that clearly outlines the terms of the engagement. Some key elements that should be included in the contract include: 

The scope of the project: The contract should clearly define the goals, objectives, and deliverables for the project, as well as any constraints or limitations.

The roles and responsibilities of each party: The contract should specify the roles and responsibilities of both the client and the outsourcing partner, including who is responsible for certain tasks and decisions.

The payment structure: The contract should outline the payment structure, including how and when payments will be made and any penalties for late payment or failure to deliver on agreed-upon terms.

The term of the agreement: The contract should specify the length of the agreement and any provisions for renewing or terminating the contract early.

Intellectual property rights: The contract should clearly state who will own the rights to any intellectual property (such as software code or other assets) developed as part of the project.

By including these key elements in the contract, you can help ensure that both parties have a clear understanding of their obligations and rights and that the project is set up for success.

4.     Communicate and collaborate with the outsourcing partner

This may involve setting up regular meetings or check-ins to discuss progress, address any issues, and ensure that the project stays on track. 

Effective communication is key to the success of any outsourcing project. Here are some tips to help you improve your communication when outsourcing software development: 

Establish clear channels of communication. Determine how you will communicate with the outsourcing partner, such as through email, phone, or video conferencing, and establish clear guidelines for when and how to use each channel.

Set regular check-ins and meetings. Schedule regular check-ins or meetings with the outsourcing partner to discuss progress, address any issues, and ensure that the project stays on track.

Use clear and concise language. Avoid using technical jargon or industry-specific terms that the outsourcing partner may not be familiar with. Instead, use clear and concise language that is easy to understand.

Be open and transparent. Be open and transparent with the outsourcing partner about any challenges or issues that may arise, and work together to find solutions.

Be responsive and accessible. Make sure to respond promptly to any communication from the outsourcing partner and be available to discuss any issues or concerns that may arise.

By following these tips, you can improve your communication with the outsourcing partner and increase the chances of a successful collaboration.

5. Monitor and manage the project

Keep an eye on the project's progress and ensure that it stays on schedule and within budget. This step may also involve making any necessary adjustments or changes to the project plan as needed. 

Here are some tips to help you effectively monitor and manage an outsourcing project: 

Set clear goals and expectations. Before the project begins, make sure to clearly define the goals, objectives, and deliverables for the project, as well as any constraints or limitations.

Establish a project plan and timeline. Develop a detailed project plan that includes a timeline of key milestones and deadlines, as well as a breakdown of the tasks that need to be completed.

Monitor progress regularly. Keep an eye on the project's progress and check in with the outsourcing partner regularly to ensure that it is on track and on schedule.

Adjust the plan as needed. If any issues or challenges arise, be prepared to adjust the project plan as needed to ensure that the project stays on track.

Communicate regularly with the outsourcing partner. Maintain regular communication with the outsourcing partner to discuss progress, address any issues, and ensure that everyone is on the same page.

6. Review and evaluate the project

Once the project is complete, it's important to review the work that has been done and evaluate its quality, effectiveness, and value. This can help to identify any areas for improvement and ensure that future projects are even more successful. 

Review the project against its original goals and objectives. Compare the final deliverables to the goals and objectives that were outlined at the beginning of the project and determine whether they have been met.

Evaluate the quality of the work. Look at the work that has been done and assess its quality, including factors such as accuracy, functionality, and aesthetic appeal.

Assess the project's effectiveness. Consider whether the project has achieved its intended goals and objectives and whether it has added value to your business.

Identify areas for improvement. Look for any areas where the project could have been improved and consider how these could be addressed in future projects.

Share feedback with the outsourcing partner. Provide the outsourcing partner with constructive feedback on their work, including both positive and negative aspects, and discuss ways to improve in the future.

By reviewing and evaluating the project, you can gain valuable insights that can help you improve future projects and ensure that your outsourcing collaborations are even more successful.

Conclusion

According to a Deloitte survey, the number one goal for organizations that choose to outsource is cost reduction. Other reasons include faster time to market, agility, and technical skills in the tools and languages used to produce several of the most successful products currently on the market.

Are you looking for a reliable software development partner? Numerous companies, leaders in their industry, have found a reliable software development partner in Serengeti and achieved a long term and successful cooperation that resulted in exceptional software products.  

Contact us to learn more about how you can benefit from our expertise.