Software Development Outsourcing Hub

Chapter 5: Hiring a Software Development Outsourcing Partner

Paavo Pauklin
February 8, 2024
Unlock software success with the ideal IT partner at your side. Ultimately, a strong partnership is paramount to building a high-quality product. 

In our previous chapter, you learned how to prepare your organization for outsourcing. Now, let’s leap into finding the best-fit IT partner according to your requirements. 

To find your perfect match, get 360-degree vision into evaluating potential partners. Below you’ll find winning strategies to choose a suitable IT partner. We’ll go over key criteria, practical steps and more so you hire the #1 partner for your business. 

How to Choose a Software Development Company

Choosing a software development company can be more complex than you think. It’s important to take your time assessing potential partners in these crucial areas. 

1. Define Your Project Needs

First, get a deep understanding of your project. Work closely with your stakeholders to determine product goals. Do detailed research on the market through surveys and user interviews. 

Set specific objectives and define resource requirements. Whenever possible, you should also have a sense of the tech stack and general IT parameters. Doing so will generate more productive conversations with potential partners. 

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2. Select the Right Outsourcing Model

Next, know your options for outsourcing. Overall, models are highly flexible to your needs, so consider your best case scenario. A good starting point is to ask whether you want to control the project internally or not.

  • Internal management. Lease a developer or hire a fully dedicated team to extend your in-house efforts. 
  • Partner-led management. Hand off your one-time project or ongoing managed services to an IT partner.

Depending on your needs, a hybrid approach may also work. For example, outsource your mobile app but keep an internal maintenance team. Or spur innovation by setting up an R&D center via outsourcing. 

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3. Research Potential Partners

Discovering a reputable IT outsourcing company is no easy feat. You’ll want to use rigorous sourcing to find the most promising candidates. 

Typically, it’s useful to target IT-specific platforms and connections. Ideally, you should try a diverse assortment of methods, including:

  • Personal recommendations. 
  • Review websites (Clutch, Techreviewer, Goodfirms, etc.)
  • Professional networks 
  • Tech platforms and blogs (GitHub, Stack Overflow, etc.)
  • Industry events (conferences, hackathons, local universities, etc.)
  • Social connections (LinkedIn, etc.)

Don’t leave any stone unturned. Once you have a competitive list of potential partners, you can kick off the screening stage.

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4. Explore All Evaluation Criteria

Do your due diligence to conduct in-depth research into each potential partner. Your exact requirements will depend on your goals, but be sure to focus on key criteria such as:

  • Technical expertise
  • Industry-specific experience
  • Project management capabilities
  • Geographic logistics
  • Industry reputation

Of course, this is just the start of the process. During this stage, you should also get a good sense of their working style and partner chemistry. 

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5. Check Client Testimonials and References

Once you’ve assessed your partner’s qualities, it’s time to verify their background. Even though it can be time-consuming, don’t skip this step. It’s essential to hear from past clients and references about their work and performance. Often you’ll glean new insights into your partner, including strengths and weaknesses. 

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6. Leverage Effective Communication Strategies

Communication is also vital, as 57% of projects fail due to misunderstandings. Check your partner’s communication strategies, especially if you’re working remotely. Take a close look at collaboration protocols, tools, feedback, reporting and so on. A good way to understand your partner’s style is to undergo a few interviews and trial meetings. 

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7. Verify Security Measures

Outsourcing opens doors to exciting talent, but it can also make your IP, data and tech vulnerable. Make certain that your partner has an end-to-end security plan, including:

  • Using top-notch security protocols.
  • Complying with local data and privacy regulations.
  • Defining IP and source code ownership in the contract. 
  • Signing paperwork (such as NDAs and PIAs) with teams. 
  • Assuring staff confidentiality (access controls, cybersecurity training, etc.). 

Ultimately, don’t leave your security to chance. Cover your bases by ensuring that your partner has ironclad protocols in place. 

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8. Weigh the Finances

Stay realistic when it comes to pricing. Understand key factors including project scope, team size, expertise and more. Don’t forget that cheaper isn’t necessarily better for long-term product results. 

In addition, define all your payment parameters in advance so there’s no confusion. A “Time and Materials” method usually gives your business the best flexibility. In your contract, set forth all payment terms (milestones, methods, currency, etc.). You should also have clauses about potential additional costs.

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9. Craft a Comprehensive Contract

A detailed contract protects your project from open interpretation. Create a contract that includes:

  • Project deliverables
  • Timeline of milestones
  • Minimum project success indicators
  • Team composition 
  • Resource requirements
  • Agreed pricing terms
  • IP ownership clauses
  • Change management protocols
  • Testing and maintenance
  • Reporting requirements
  • Defined project risks

The more detailed your project scope, the clearer your expectations will be. Don’t rush the contract process or you may face vague requirements or even loopholes.  

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10. Set Realistic Expectations

Establishing a fruitful partnership depends on staying transparent and realistic. Have everything well-defined in your contract and stay as tangible as possible. It’s also worth having flexible change management protocols, so you can pivot as needed. 

You may have lots of questions as you get started with your partner – that’s great! Ask away so that you feel confident about expectations. There's a reason why transparency is the #1 quality that businesses seek in providers. Work to create a strong rapport with your partner through deep communication. 

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Choose Netcorp for Your IT Outsourcing Needs

Choosing the right software development outsourcing partner is a multi-layered process. Follow our 10-step guide to cover all your bases as you search for the best fit. Specifically, look at the full logistics so you can hire a well-rounded partner. 

As you kick off your rigorous search process, reach out to Netcorp. We’re proud to build long-term relationships based on trust and technical expertise. Find out how our elite teams work in tandem with your business to get exceptional outcomes.

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Paavo Pauklin
Executive Board Member

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.

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