Serhiy Kozlov — February 28, 2019 — February 28, 2019
Such scenes are played out all over the world. A creative has a unique idea for an app he knows will be a big seller. A small company needs a customized piece of software for its logistics and inventory tracking. A mid-sized or large enterprise has grown to the point that it now needs to update with new custom software development, unique to its operations – HR, customer service, and more.
But here is the issue. In some of these scenarios, there is simply not the budget or the need for permanent full-time developer hires. In others, the IT department is overloaded already and may not even have the development expertise to get the job done.
The solution is obvious – outsource the development to a team of developers who will take the time to discuss your goals and needs in detail, prepare a clear and detailed proposal, and then get to work quickly. Easier said than done.
In-House Development vs. Outsourcing: Cost-Efficiency Compared
A lot of businesses waste time looking for local hires, thinking that this will give them the control and communication they need. Unfortunately, there is usually a short supply in the local market, and the specific expertise may be hard to find.
According to ESG industry survey, 53% of organization already experience a shortage of cybersecurity skills at their companies; 38% report the same for IT architecture/planning skills. And those are the “big guys” with budgets to spare for headhunting and retaining talent with prime benefits packages.
When local talent is scarce and the hiring costs are steep, the best route for SMEs is to “cast a wider net” and look for software outsourcing among the many global software development companies that can provide a dedicated team for your project(s). Last year, small businesses have been spending 7.8% of their IT budgets on average on outsourcing IT processes and 37% of companies plan to increase their spending this year, per Computer Economics study.
This increased spending is driven by the clear ROI of outsourcing certain business processes. According to the same report the outsourcing the following IT functions holds the greatest potential for cutting costs:
- Application development
- Help/service desk support (with further automation)
- Disaster recovery
- Data center operations
- Cloud infrastructure monitoring and support
And fortunately, new PM and communication tools allow business to have the same level of control and communication with a remote team as with a local hire.
The Hard-to-Ignore Benefits of Outsourcing IT to a Dedicated Development Company
The term “dedicated development” really refers to a development team model. Such a model means that, when you have a software need, you get a team of developers who work on your project, each with unique areas of expertise to bring to the table. And you get a project manager who oversees the software development lifecycle process, ensures progress, keeping you regularly updated and in the loop. Depending on your needs, you can also choose to use an extended IT team model (ETM). In this case, a remote team joins forces with your in-house staff and works as a united front.
This is just one of the benefits of using an outsourcing team for your software development. Consider the others as well.
- Employing a software developer, or several, on a permanent basis, will be costly. As you know, it’s not just the salary. It’s the recruitment efforts, the interviews, the hiring, the onboarding, and the benefits package. All of these expenses are nullified when contracting with a software company that can meet your project needs.
- You have flexibility, within your own timeline requirements, to use a dedicated team on a full- or part-time basis. Large software development companies will provide these options.
- Get the specialized skills you need. These are not always available in-house, especially for SMB’s. Outsourcing brings those skills to the table.
- You actually get 24/7 operational activity. You may run your business from 8 – 5 in your time zone. An outsourced developer in a different country and in a different time zone is working while you sleep, and sending you updates and requests for approval, so that you have them when you wake up.
- Outsourced development teams may bring fresh ideas to you and your own in-house IT department.
- Outsourcing development frees up you and/or your IT department to focus on other business goals and more critical tasks of your operations. Per Deloitte, last year 84% of businesses relying on outsourcing have managed to initiate discussions, conducted pilots or implemented at least some disruptive solutions.
- You reduce time to market or time to implement new in-house software needs. Specifically, you do not have to rely on an in-house team that may be working on several other projects or tasks at the same time.
4 Steps To Choose the Right Dedicated Development Team
It’s a process, and an important one at that. If you err in your selection, it can mean disaster, money spent for naught, and products that are not right. Here are the key steps.
1. Decide what do you want your software to do
Schedule a brainstorming session with your team to decide what kind of features you’d like to add to your current system; what’s the priority for them and what tech stack is the most preferable. You need to reduce this to writing, not just for your own benefit but so that you have all of the details clearly in mind before you talk to anyone. These notes will later become a list of requirements that you will share with your vendor.
2. Research Your Options
As popular as outsourcing is today, it will not be difficult to locate development companies that have provided similar types of software development for others. Start with a simple Google search, access their websites, and look at their portfolios. Have they developed similar software products for companies of your size and niche?
If you network with other comparable businesses, see who has used outsourcing companies with dedicated teams and ask for their assessments of the firms they have used.
Look carefully at the size of a potential partner company. In general, the larger ones will have more flexibility and the ability to meet more urgent deadlines. If speed is critical, then you want a larger firm that can provide that dedicated team immediately.
Ultimately, your goal is to narrow your list to several that you want to consider.
3. Start The “Interview” Process
Beyond the initial contact, you want to take a company through a strong interview process. Preferably, this will be done via video-conferencing, so that you get a solid “feel” for the firm, its culture, and its ability to meet your demands.
During the interview process you will want to do the following:
- From your needs and goals list, go through each detail of what it is you want the product to do. But be a listener too. An expert will often make suggestions and recommendations that you may not have thought of. This is a good clue that the agency has expertise, is committed to quality of product, and will bring the latest technology to the table.
- Ask the question: “What is a dedicated team in your environment?” you want the right answer – a team of experts will be assigned to your project, based upon the development parameters, and there will be project leader who will be your contact person throughout the process.
- What is the availability to begin now? If a company has the necessary resources, it will be able to begin immediately.
- What will be your role as a key member of this team? You don’t want just updates. You want to be involved in the decision-making along the way, as suggestions and recommendations are made.
- Do they use an agile development model? This is preferable, because as each iteration is completed, it is tested, debugged, etc., and the whole development process moves quickly and more efficiently.
- Ask for References. A professional development firm will have those available to you immediately. If possible, ask for references from companies that are comparable in size and that have had projects similar to yours. Don’t be lazy. Contact those references and ask a lot of questions.
- Check out flexibility of time availability and language barriers. When using a foreign outsourced firm, these are important details. You want a project manager who can communicate in your language. And the time zone differences can a barrier to quick communication.
- Costs: Obviously, you want a quote for the project and you want it in writing along with a binding contract that specifies exactly what is to be produced and the timeline involved.
- Follow-Up support: What type of follow-up support will the firm provide? If you experience issues, what is their commitment to resolving those? This should be included in the contract as well. Never choose an agency that will not provide full follow-up support, as well as scaling that software as you may need in the future.
4. Make Your Selection
If you have carefully followed the three steps listed above, you will make a wise choice. Now, it’s time to let that dedicated team go to work, keep you involved, and produce the perfect software product.
Originally published here.
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