How to Outsource Software Development in 2024 [An Updated Guide]

Key Takeaways:

  • The software outsourcing development process consists of defining project goals, determining scope, selecting potential vendors, choosing the right partner, signing a contract, initiating the development process, to quality assurance and deployment.
  • There are four types of outsourcing software development models which are a project-based model, a dedicated team model, staff augmentation, and managed services.
  • The four core reasons to outsource custom software solutions are lack of an in-house development team, resource constraints, focusing on core business activities, and rapid pace of software development.

Do you want to focus on your core business objectives? Are you looking to outsource software development?

If yes, you might have probably thought about software development outsourcing.

However, outsourcing your project and goals are not easy until done with the right process and best practices.

If you are searching for a way to outsource your software project development that ensures effective end results, this blog post is for you.

Being one of the leading software development outsourcing service provider companies in Canada, we know the importance and challenges faced in outsourcing project development. This is the reason we have written this dedicated guide on how to outsource software development. Follow this blog post to get result-driven outcomes. So, let’s get started.

Follow These 7 Steps Process to Outsource Software Development

In the following section, learn about the core steps that help you to outsource software development effectively. Remember, these are the core steps and getting clear about each step helps you to be aware of the outsourcing software development process. Let’s start with the first step to define the project goals.

  1. Define the Goals of Your Software Project

    Before outsourcing software development, you need to be clear with your goals for the project. Having clarity of the project helps to identify your exact requirements in terms of software functionality. Outlining your software business objectives is more important than developing the software at this stage.

    As you identify and specify the goals of your project requirements, you help everyone involved in the project development to understand what the requirements developers need to work on, what is expected, and how success will be measured.

    Getting clear with your goals helps you design specific, measurable, achievable, relevant, and time-bound (SMART). This way, you can easily track project progress, measure success, and ascertain to know if outsourcing software development provides the expected results.

  2. Develop a Robust and Scalable Software Solution

    Our software consultants can guide you from idea validation to complete software development.

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  3. Determine Your Project Scope and Requirements

    When you develop a software project, defining the scope of your project is important to define. Having a clear scope helps in prioritizing the different aspects of your software development. Determine what features and functionalities are important and need to develop first.

    In addition, as you determine the project scope, you know what needs to be for your project which helps you budget effectively and schedule the tasks optimally and properly. Above all, when you create the scope of your project, it helps you to avoid the issues of maintaining control over the project.

    By taking project scope as a baseline for your development, you can easily measure the project’s progress and performance. For that, you can compare the project plan with your actual project development and take the necessary steps for adjustment during the process.

    Moreover, follow these steps that help you to determine the basic project scope of your requirements.

    • Identify all stakeholders of your project considering end-users, department heads, and managers.
    • Conduct interviews, and surveys, and take brainstorming sessions with the stakeholders to gather requirements.
    • Understand what are the overall expectations from the software, what problems need to be solved, and what benefits you get from the software.
    • Collect the requirements of the software project which includes features, functionalities, design, and what your software solutions should be able to do.
    • Analyze and prioritize the requirements based on their importance and feasibility.
    • Determine the scope of your software project which includes what software will do also the tasks, deliverables, features, and functionalities of the software.

    Following these basic steps help you to write the scope of your project. Later on, you can use scope document as a reference guide throughout your software project development.

  4. Shortlist the Potential Software Development Companies

    The right software development company helps you to drive your project to success. This is the reason you need to focus on choosing a reliable outsourcing software development agency. But, do you choose the right software development outsourcing partner for your project development? Here are the certain aspects that help you to make a measurable decision.

    First of all, start by creating a compiling list of potential software development outsourcing companies. Find the companies through referrals, online searches, technology events, and outsourcing platforms, such as Clutch, Goodfirms, and G2.

    Next, you need to assess the expertise and experience of the companies you choose. For example, you need to have information such as experience in a specific industry, work experience with similar software development projects, and check the portfolio and learn which projects are being developed.

    Further, you need to check the reviews and ratings and feedback of software development outsourcing companies. For that, you can visit websites G2, TrustRadius, Goodfirms, and Upwork. Remember, when you outsource your software project, costs are important. You need to learn about the different vendors’ pricing structure that suits your budget.

    If you want to learn more about costs, read this detailed guide on the costs of software development outsourcing. In this blog, we have provided a quick cost of outsourcing, factors that impact the costs, and the pros/cons of outsourcing software development.

    Another important thing is to check each software development outsourcing company’s adaptability to change in project development. When you need to scale up or scale down quickly, you are able to do that as per your requirements by communicating with the vendor.

  5. Once you have created a shortlist of outsourced software development agencies, you need to follow the steps that help you to choose the right vendor for your project.

    • Review and evaluate the technical expertise in relevant experience and technology of a vendor.
    • Look for a software outsourcing company that has a good balance between value and money.
    • Evaluate how effectively a software vendor communicates and how well they can align with the cultures of yours.
    • Learn and check the vendor’s references and online reviews and try to get in touch with past clients to gain insights into their reliability, professionalism, and quality of work.
    • Go through the proposed contract terms while ensuring that include payment terms, disruption resolution, confidentiality issues, and termination conditions.
  6. Hire Space-O as Your Outsourcing Software Development Partner

    Talk to us. We are a leading software development company, having experience in developing 300+ custom solutions and serving over 100 customers worldwide.

  7. Sign a Software Development Outsourcing Contract

    While selecting a reliable software development agency for your project, discuss the project terms, conduct interviews, and discuss work terms and project specifications with your chosen software development company. For that, consider the following things and sign a software development contract.

    • Specification on the timeline, project start dates, project end dates, and key milestones.
    • Clarity on the rights to the developed software, code, and ownership of the whole project.
    • Clause declaration on protecting the sensitive data and secrets of your business.
    • Outlines the software evaluation criteria, use cases, software behaviour, and clear vision of the final software product.
    • Clarification of software development KPIs that are measurable, progress tracking, quality, and compliance.
    • Declaration on the services of software development, pricing, and payment structure, depending on if the project is signed based on per milestone or hour.
    • Defines the legal conditions, service levels, obligations, metrics, and penalties.
  8. Initiate the Software Development Process for Your Project

    As soon as you sign a contract with a software development company, you need to start a kick-off meeting. Within the kick-off project meeting, you, your team, and the outsourcing software development partner to discuss the project in detail. This meeting helps to keep everyone on the same page and clears the expectation of software development.

    Your outsourcing software development partner provides you with a detailed plan project which includes information like tasks, resources, timelines, and milestones. Also, learning how to develop software solution from scratch that match your expectations. This roadmap helps to keep the project development on track and easy to monitor progress.

    Afterwards, you must establish clear communication challenges that help conduct regular meetings, emails, project management tools, and chat applications. Furthermore, according to your project development, the outsourced development team breaks down your project into small sprints i.e. small phases. This way, as per the agile software development life cycle, the development of your project is done.

    Once each phase gets completed, you get regular updates from your outsourcing partner. This way, you are on the same page and easily able to track development to ensure the progress is going ahead as per decided milestones and meets the timeline.

  9. Quality Assurance and Deployment of Your Software Project

    As your hired software developers complete the development work, next the quality assurance progress is done. Testing is an important part before you make your software live on the web servers. The team QA of your outsourcing partner prepares a testing plan that describes the entire software testing strategies from what to test to the requirement of necessary testing resources.

    When bugs are found during testing, the testers send the build version to the development team. Further, the development team checks the software bugs and fixes them. Further, the reporting of bugs is done and once the software bugs get ready, then the deployment is done.

    For deploying your software, the project manager and software developers team works together to set up the installation in the live software environment. Depending on the software, you can deploy on a server which might be your own or a cloud environment.

When to Consider Outsourcing Software Development?

Here are the scenarios when you might consider outsourcing software development.

Lack of In-house Expertise

  • Outsourcing can be an excellent option when your project needs specialized skills that your internal team doesn’t possess.
  • For example, you might be developing a mobile app and need expert knowledge in iOS or Android development that your team lacks. Outsourcing can give you access to professionals or access to a global talent pool with extensive experience in these areas.
  • By collaborating with experts in the field, you not only get your project completed efficiently but also have an opportunity to learn from them, adding value to your business in the long term.

Resource Constraints

  • If your current team is at full capacity or your organization has limited resources, outsourcing can allow you to continue progressing with new projects without overstretching your staff or budget.
  • Consider a scenario where your in-house team is already engaged in maintaining existing applications, and a new client comes in with a project requiring a quick turnaround. Rather than overloading your team or turning away the opportunity, you can outsource the new project.

Rapid Scaling Needed

  • When there’s a need to ramp up your development efforts swiftly – such as for a significant project, a new product launch, or meeting seasonal demands – outsourcing provides a quick way to increase your resources.
  • Suppose you are a start-up and have landed your first big client. The project scope is much larger than what your existing team can handle within the tight deadline.
  • Outsourcing parts of the project, such as testing, development of certain modules, or UI/UX design, can allow you to meet the client’s needs without incurring the cost and time required to hire and train new employees.

Focus on Core Business

  • If software development is not your core competency, outsourcing these tasks can free up your internal team to concentrate on your main operations and strategic objectives.
  • For instance, if you run a healthcare business, your core competency might be in providing medical services rather than developing software. Outsourcing the development of your patient management software allows your team to focus on improving patient care while ensuring you still get a high-quality software solution.

These are the core reasons why companies outsource software development. While outsourcing, you also need to take care of choosing a reliable software development outsourcing company. Proper planning, careful vendor selection, clear communication of your requirements, and regular monitoring and feedback are key to successful outsourcing.

As you are clear with the conditions for opting for outsourcing software development services, let’s now learn about the comparison of different software outsourcing services models.

Comparison of Software Development Outsourcing Models

Here is the comparison table that describes the information about the different models in software outsourcing.

Model NameModel DescriptionBenefitsRisks
Project-based ModelThe outsourcing company is given a specific project with defined requirements and deliverables. They are responsible for delivering the completed project within a specified timeline and budget.Great for one-time projects with well-defined requirements. Allows for budget control and a clear timeline.Less flexibility for changes during development. The outsourcer may not fully understand the business context.
Dedicated Team ModelAs you hire a team of remote developers from the outsourcing company. This team works as an extension of your in-house team and manages all the work directly.Direct control over the team and project. Good for long-term projects and when requirements may change over time.Requires time and resources for management. Less cost-effective for short-term projects.
Staff AugmentationThe outsourcing company provides individual developers to augment your in-house team. The remote developers team is managed by you.Good for scaling a team quickly or adding specific skills. More control over individual team members.Requires time and resources for management. Not ideal for full-project outsourcing.
OutstaffingSimilar to staff augmentation, the outsourced staff are managed the vendor. As a client, you sets the tasks, but the day-to-day management is handled by the vendor.Access to specific skills and quick scaling without management overhead.Less direct control over staff. The outsourced team may not fully understand your business context.
Managed ServicesThe outsourcing company takes over a particular IT software service for you. They are responsible for both the team and the output.Allows you to focus on core business functions. Good for ongoing, routine tasks.Less control over the team and tasks. Potential risks in terms of service quality.

Now that you are clear with the outsourcing software development models, let’s know the reason why you should outsource your custom software development in Canada. If you want to know in detial about different outsourcing model we have read our detailed guide on each software development outsourcing model.

Why Outsource Software Development Projects in Canada?

According to the CBRE’s report of tech talent 2022, Toronto, Vancouver, and Montreal are among the top 25 market talents in North America. This is the reason that Canada is known for its highly skilled workforce. Moreover, English is one of the two official languages of Canada, which helps you to have clear communication and reduces the risks of misunderstandings that occur during software development.

Above all, there would be no issue of time zone compatibility issues. The reason is that US-based companies can benefit from time-zone alignment. In addition, Canada is politically stable and has favourable policies supporting the outside business to invest in Canada and get fruitful results in return without paying the high investments.

Hire Software Developers for Your Project

Let’s talk. We have a team of experienced software engineers, testers, designers, and a project manager to help you.

Do you still have doubts about outsourcing software development? Check the following section of the FAQ.

FAQ About Outsourcing Software Development

  1. How do you measure the success of outsourced software projects?

  2. For measuring the success of your outsourced software development, you need to define KPIs that align with your project goals. Here are the steps you can follow.

    • Define clear objectives
    • Set KPIs for tracking development progress
    • Monitor development progress regularly
    • Check the quality of development
    • Measure team satisfaction
    • Evaluate business impact
  3. How do you protect intellectual property during outsourcing?

  4. Here are the things that you need to follow for protecting intellectual property (IP) during outsourcing.

    • Sign a non-disclosure agreement (NDA)
    • Sign intellectual property rights agreement
    • Ensure secure communication and data transfer
    • Follow the process of access control
    • Conduct regular audits of your outsourcing partner
  5. What is Agile outsourcing software development?

  6. Agile outsourcing software development is when you work with an external team to develop software using Agile methodologies. In this approach, the development process is broken down into small parts, known as “sprints.” Each sprint has a specific goal and a set timeframe, usually a couple of weeks.

    The Agile method encourages constant communication, flexibility, and collaboration. It’s great for adapting to changes quickly and delivering functional pieces of software at the end of each sprint. It’s all about iterative progress, continuous improvement, and delivering value to the user fast.

  7. How do you ensure quality in outsourced software development?

  8. Here are the points that you need to take care of while outsourcing software development.

    • Prepare a document that consists of quality standards
    • Choose a reputed software development company
    • Use Agile methods for your software development
    • Keep regular communication with the outsourcing team
    • Ensure to implement robust software testing
    • Conduct code reviews to resolve issues in the project
    • Ensure to follow the proper documentation for your project

Outsourcing Software Development to Space-O Technologies

In this blog, you have learned about the process of outsourcing the development of software solutions. From defining goals to deployment of your software solutions, we have covered every point in detail that guides you about the entire process. By choosing talented and experienced developers, you can develop robust and scalable software solutions within your budget.

When you outsource software development, you also get benefits like cost reduction, flexibility, speed to market, and access to global for your software development project. If you are looking to outsource your software development, let’s connect. We have a team of talented and experienced software developers who can build feature-rich and reliable software solutions. Let’s talk.

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Rakesh Patel

Written by

Rakesh Patel is the Founder and CEO of Space-O Technologies (Canada). He has 28 years of IT experience in business strategies, operations & information technology. He has expertise in various aspects of business like project planning, sales, and marketing, and has successfully defined flawless business models for the clients. A techie by mind and a writer at heart, he has authored two books – Enterprise Mobility: Strategy & Solutions and A Guide To Open311

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