Building a business-critical product is a high-stakes endeavor. Success means you can gain a market edge, unlock new opportunities and elevate sales.
Ultimately, the #1 factor for getting top results is selecting the ideal IT partner. Although 78% of businesses enjoy positive outsourcing relationships, don't rush the hiring process.
Knowing how to choose a software development company can make all the difference. Our experts at Netcorp have put together 12 steps to vet your next IT outsourcing partner. Explore our criteria to discover a perfect match for your specific business needs.
To make the best decision, use our criteria on how to choose a software development company.
Do your due diligence and look into the company’s past projects. Ideally, they’ll have a website where you can browse their portfolio and testimonials. Whenever possible, contact former clients to get an insider’s look into past projects.
What’s more, look at reviews on third-party platforms such as Clutch. Customer ratings on the Apple Store or Google Play Store may also be useful. This way, you can determine whether their expertise and quality meets your standards.
Next, evaluate whether the company has the right technical fit for your project. While your tech stack may yet be TBD, get the full picture into the company’s specializations. This includes their IT experts, as well as resources such as equipment, tools, etc.
Although technical ability is important, your partner must also have business aplomb. Ensure the company has a deep understanding of your industry, current market and so on. In turn, the right partner will align with your vision and priorities.
Achieving partner chemistry starts with sharing a working style. Understand how the company sets up communication practices, feedback processes and more.
Get a sense of their style by interviewing team members and undertaking a trial meeting. You might also ask what project management tools and best practices they leverage. Doing so will ensure you’re on the same page from day 1.
Some of the best IT outsourcing partners are in regions such as Eastern Europe, LatAm and Asia. As you vet potential companies, carefully consider how the teaming logistics will work.
Analyze factors such as the time zone difference and local laws (such as labor, tax and IP protections). Most importantly, bear in mind the potential cultural and language differences. Top-ranked companies align well with Western business practices and have English-proficient developers.
Besides geographical differences, gauge the outsourcing company’s team processes and methodologies. Your partner should be well-versed in remote work and communication across time zones.
In particular, the company should follow agile methodologies and values. This sprint-based method will streamline the development process. It also guarantees frequent deployment for you to give ongoing feedback and direction. Ask for a well-documented development process to clarify the company’s approach.
Do you know how to choose a software development company when IP is on the line? It’s crucial that you protect your security, data and IP when working with a partner. Check that they're using industry-best cybersecurity protocols. In addition, they should stay compliant with data and privacy regulations.
Pay careful attention to how IP and source code ownership is defined in your contract, too. You may request paperwork (such as NDAs and PIAs) to close any potential loopholes.
The software development lifecycle isn’t just about building a product. It’s also about testing and maintaining it over time.
Cover your bases by including rigorous QA, testing and maintenance in your timeline. Having these post-launch processes will guarantee a stronger product with fewer bugs. In turn, this will significantly reduce costly downtime and customer complaints.
As you learn how to choose a software development company, be extra cautious about the scope of work. This document defines your end-to-end product needs. Key items include deliverables, timelines, KPIs, team members, resources, pricing and more.
Guarantee that your scope is airtight, clarifying every area in no uncertain terms. Otherwise, you may face inflated costs, delays and other issues down the road.
You should also have a crystal-clear understanding of pricing. Double-check your contract so that you know exactly what’s included (and not) in the quote.
Often it’s best to choose a flexible outsourcing pricing model, such as “Time and Materials.” This type of contract charges you by the “time” or hours worked on your project. It enables you to constantly revise, add and prioritize features to your liking. No matter how you set up pricing, feel confident that your partner is transparent about costs.
Don’t forget to evaluate the company’s size. As a rule, it’s ideal to choose a similarly sized partner to align your goals.
A larger company may not be as invested in your project, as they usually depend on big-name contracts. Sometimes these businesses are bloated as well. This can result in disorganized communication and/or overhead costs.
In contrast, a smaller-sized IT partner hits the sweet spot. Often they have a top reputation, affordable prices and a strong interest in your success.
Last but not least, the company should act as a genuine partner committed to getting results. While having partner chemistry will get you far, sharing key values is most important.
Ask about your partner’s mission and principles, including transparency, communication and commitment. Get to know how past clients would characterize their level of partnership. From here, you can get assurance about working together in a long-term capacity.
Once your potential partner has met these minimum requirements, consider these additional areas. Doing so will deepen your research into how to choose a software development company.
To narrow down your partner’s location, you’ll want to understand the three main types of IT outsourcing:
Typically, onshoring and nearshoring are ideal for having streamlined collaboration. This is especially true if you have an ambitious software deployment schedule. Often these partners have closer cultural proximity and may even share a language. However, staying in-country or nearby may incur higher salary costs.
In comparison, offshoring doesn't have the advantages of shared time zones and culture. That said, developers in these regions charge much lower competitive rates. If you choose an offshore provider, just be sure local laws (labor, tax and IP) align with your expectations.
What’s more, your IT partner should offer the ideal type of outsourcing strategy for your needs. Fortunately, these models are flexible, so you can tailor them to your requirements.
If you’re keen to keep control of the project internally, you might try extending your teams through:
Or, if you want your partner to handle your full IT project, leverage options such as:
Moreover, you can create your own hybrid option for some of your IT needs. For example, you might outsource a special project, an R&D center or another focus. Just be sure that your chosen IT partner is willing to set up the engagement model you’re looking for.
Finally, you should explore whether the company is committed to innovative solutions. Overall, IT outsourcing is well-suited to state-of-the-art solutions with the right partner.
Probe into whether your partner has experience with latest trends. Key areas may include digital transformation, next-gen technology, big data and more. Expertise with this tech is a clear sign that the company is ready to innovate with your product.
Screening potential IT partners can be a long, rigorous process. As you research how to choose a software development company, keep in mind these red flags. If you notice one or more of these warning signs, the company may be not qualified or trustworthy.
Next, you’ll want to undertake a thorough search process. To identify potential IT partners, try out these tried-and-true recruitment methods.
From here, you can come up with a shortlist of potential IT partners and start screening!
Now that you’ve learned how to choose a software development company, make the right decision. Find an IT partner that checks all your boxes with our expert criteria and vetting tips.
After you do your due diligence with research, go with your gut feeling. After all, your software company should inspire trust and a sense of optimism. At Netcorp, we stand beside you to build best-in-class products. We’re proud to create world-class rapport based on transparency, efficiency and quality. Reach out to get more info about how our elite teams can achieve your product vision.
Paavo Pauklin is a renowned consultant and thought leader in software development outsourcing with a decade of experience. Authoring dozens of insightful blog posts and the guidebook "How to Succeed with Software Development Outsourcing," he is a frequent speaker at industry conferences. Paavo hosts two influential video podcasts: “Everybody needs developers” and “Tech explained to managers in 3 minutes.” Through his extensive training sessions with organizations such as the Finnish Association of Software Companies and Estonian IT Companies Association, he's helped numerous businesses strategize, train internal teams, and find dependable outsourcing partners. His expertise offers a reliable compass for anyone navigating the world of software outsourcing.
Download the free copy of our "Software Development Outsourcing" e-book now to learn the best strategies for succeeding in outsourcing!
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