Software development outsourcing

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Outsourcing software development

In today’s business climate of increasing globalization, recent figures show that more than half of Fortune 500 companies practice offshore outsourcing as a part of their overall business strategy, and this should come as no surprise. For several years now, the benefits of outsourcing specific aspects of your workload to more economical parts of the world so that you are better able to concentrate on your core specializations have been well known.

And in no area of offshore outsourcing has this been more valid or necessary than Information Technology, and in particular the development of new software. The principle reason for this is that IT uses a language and skills that transcend national and cultural barriers. The potential expenditure in time and money spent developing a bespoke piece of software for your company makes sourcing the cheapest provider a top priority.

Regardless of this, if your company is proposing to outsource an offshore software developer, it is worthwhile understanding the benefits and risks involved. A good way of minimizing risk, for instance, is to use a UK based offshore software developer, or an agency whose business is to connect clients with developers matching certain requirements.

The benefit of using a facilitator to outsource your software development needs is that they will have the experience to secure the best package with the minimum of fuss. In no time at all you will be able to get on with your core business activities while your software is built to your exact specifications. However, in order for this process to run smoothly, it is important to establish certain working conditions, which could equally be applied to any software development project.

  • That there are regular opportunities for the people who will be using the end product to test the prototype and have a say in any improvements. Also, that any decisions about the development of the software above a certain level are referred straight to head office.
  • That any future product enhancements or upgrades will be carried out by the original team of software developers using the same stringent quality and testing standards.
  • A top of the range piece of software will only be useful to you if you understand how to get the most out of it. Ensure a clear user guide will accompany the final product and sufficient training is carried out during or after software implementation, as is most appropriate.
  • Seek guarantees about the quality, usability and durability of the software and establish a clear time frame and budget for its development, above which certain penalties will be incurred by the developer.

The time and effort spent establishing a good working relationship with an offshore developer is worth it because of the 40% to 60% cost savings you’ll make compared to using a developer working solely in the UK. Alternatively, if time is more of a factor, it is possible to set up an onshore/offshore system, so that as the British team starts their day’s work, the Indian or Chinese team is just completing theirs. Or perhaps you’d prefer an offshore developer who keeps similar hours to you, in which case contracting the work to South Africa makes more sense.

An additional benefit of the South African model is that you will be able to conduct video conference meetings and emergency phone calls at mutually convenient hours and won’t suffer from jet lag when visiting the site.

As should be clear by now, offshore software developing can be a winning formula for your company, so long as the client/developer relationship is strong, with benefits including improved access to local labour and IT markets in the world’s fastest growing economies in addition to considerable cost savings. Thanks to the software outsourcing pioneers of the 1980s and 90s, offshore software development is now a highly competitive industry offering lower risk and higher gain. As such, there has never been a better time to outsource your next IT project to an offshore software developer.

Choosing a software developer

The mere thought of selecting a software developer can be daunting if you are not technically minded, but be assured that your role in the selection process is one of assessing the developer, rather than that of assessing software technology.

Successful software development relies heavily on a strong partnership with the developer. Thus, picking the right developer is crucial, and the following suggestions will assist you in hiring a reputable and proficient developer.

Establish your software requirements

Software development cannot occur without a well structured and clearly defined set of your business's software requirements, as the work is in essence a process of addressing needs and solving problems. Consequently, development success will depend largely on the time and effort you dedicate to this stage of the process. It is only by analyzing needs and desired functions that a developer can provide you with as accurate a job proposal and cost estimation as possible.

Be extremely thorough and precise at this stage, including key employees' suggestions and needs, and compile a comprehensible requirements document, separating the mandatory needs from the optional.

Draw up a list of potential developers by asking business people you know for recommendations or by researching web directories. Send them the requirements document, as well as information about your company (such as business objectives) and your budget, so that they can in turn provide you with a job proposal and quotation.

Assess the candidate developers

A preliminary assessment of developers' written proposals and quotations should give you a good indication of their suitability in addressing your needs, but a final decision should be determined by in-person interviews as well. Meeting face-to-face is crucial in evaluating not only the candidates' services, but their personalities and communication skills too. The latter two are vital aspects in ensuring a strong collaborative partnership with the company, which will largely determine the success of the software development. In your assessment of the potential developers, consider these factors:

Experience and expertise

You will obviously want to hire someone who is proficient in the field and keeps abreast of the latest software technology trends and discoveries. Be sure that the candidate is a genuine software developer able to suggest solutions to your problems, and not merely a programmer who wants exact instructions on what program he or she should write.

Also be careful of developers who are preoccupied with their particular area of technology specialization at the expense of your particular needs. A good developer should provide you with the type of technology most suited to your requirements.

It is preferable to choose a developer who is both experienced in their own domain and familiar with your particular industry. The reason for this is that they will be aware of the common needs (both clearly stated and implied), problems and general expectations in your line of work.

Visiting a candidate's website should give you a good indication of these aspects, but the best and most direct way to determine a candidate's experience and expertise is to contact former and current clients. Ask them specific questions about the development company's general service delivery, response to problems, and the efficiency of the developed software.

You can ask to see samples of software, and test it yourself to see whether it is user-friendly (although remember that training will be provided) and effective. Industry awards are also obviously a good indication of a company's expertise.

Companies Size

There are advantages and disadvantages to both big companies and sole proprietor situations. A big company may house all the skills and services needed by your requirements, but you run the risk of getting lost among many clients. The opposite is true for a small company or sole proprietor. Therefore, size is not an important deciding factor. Rather, make sure that the developer you choose can cope with the size of your company, and either cover all your requirements or be able to outsource specialized skills to reputable contacts.

Personality and communication skills

This may sound trivial, but your instinctual like or dislike of the person or group is significant in the selection process. You will be working in close partnership with the developer, discussing problems which can become draining and difficult, so it is vital that you get along.

The ability to communicate clearly and patiently, without loads of jargon, is also imperative. Software development entails your description of needs and problems being translated by the developer into functional solutions. Misunderstandings are inevitable in such a complex communication situation, therefore be sure that a good basic level of interaction is evident from the start

Also note their interest in the work and in your vision. Passion for a subject will generate creative problem solving.


Your company will need technical and administrative support during and after software implementation. This includes staff training, user manuals or help documentation, and debugging of software. The company should also be committed to the general improvement of your software and the software should support integration with your existing applications and major systems, and comply with all platforms. These issues, along with specifications of the amount of support provided, should be clearly stated in the contract.


This is another factor which should not solely determine your choice of developer. Software development is a complex process and you should expect to invest a substantial amount of money in the process.

More important issues of price in choosing a developer are those of costing methods and charging for changes. Avoid companies that charge hourly rates without specifying the amount of time that the job will take. A good developer should be able to make a fairly accurate cost estimation that constitutes fixed fees, providing that your requirements have been clearly and completely stated. Be prepared, however, for possible added costs later in the development process if changes are needed (which they usually are). Changes cannot be predicted, but be certain that you understand the developers means of dealing with and charging for changes (this should also be stated in the contract).

Legal issues

An important aspect that should be stated in the contract is that of licensing. Ensure that you will be able to use the software on all the computers that you need to, and be aware of any specific copyright claims the developer might have. A guarantee as to the end product’s effectiveness should also be stated.

Questions to ask to developers

When choosing between candidates for a software development project, you should ask any and all question you have and be sure that you receive satisfactory answers. First of all, the more general questions:

  • What is the estimated timescale for carrying out the work from conception to installation? Will this include the creation of prototypes and demo versions that I can try out? And will my observations of the prototypes be factored into the final version?
  • Will your research into and selection of optimal technologies be influenced by pre-existing relationships with other companies or will you start the process free of any particular affiliations?
  • How much liaising would be expected while detailed specifications for the project are drawn up? I understand that the software programmer will be custom made for me, but how much of a say will I have in the process?
  • How much time do you put into the creation of project documentation (such as detailed descriptions of the source code, system architecture and system protocols) so that our in-house IT experts can follow what is going on?
  • User documentation will be required so the system can be used be employees who are not technically orientated once the software is developed and up and running. Will the user’s manual, troubleshooting section, installation guide and FAQ section be written in as clear and easy to follow language as possible? Is this work done in-house or outsourced to a professional copywriter?
  • What post-installation product support and remote administration services will you be able to offer? Will training be available to ensure that users make the most of the software? Are there any guarantees that you will be on hand to fix any problems that might arise and will you take full responsibility for any problems that do arise?
  • Can the software be upgraded in the future as new technology becomes available? Also, can additional features be implemented as and when they are required and the software reused at a later date for other systems?
  • Can you give guarantees about the security of the site and its resistance to bugs and viruses?

The answers to these questions should give you a good picture of how adaptable the software development company is and the level of service, support and security you will receive from them, both in the short- and in the long-term. As you consider the answers to these questions, you should also review their employee turnover, years of tenure and the number of contracts of your size that the company has previously had. And ask questions about the terms of payment, and whether this is performance related.

Once you have had your questions satisfactorily answered and the software development company seems reliable and adaptable and able to match your requirements, you can go ahead with drawing up a contract. However, if the company is offshore, additional questions come into play that will enable you to assess whether you can work with them and if they will be able to complete the development project to the standard you expect:

  • Will a project manager be assigned to me as a contact person? Will this contact person be available throughout the time the software is being developed?
  • Will he send me a progress report on a daily basis detailing the work that has been completed? What other pieces of information will he update me on? Will the progress report include a plan for the week? If I make a request or submit a question, how soon will it be answered?
  • What system of cost tracking do you have to ensure that the software development is completed on time and within budget? If, for any reason, there is a delay to the project or it has gone over budget, will I be notified of this development immediately?
  • Does the work you do include any warranties, and are you available for system support and maintenance in the period after the warranty has elapsed?

Begin the software development

After considering all these factors in the evaluation of candidates, you should be able to hire one that you are happy with. After signing the contract and starting the development, remember that communication is key. Address problems and announce required changes as early in the process as possible. The beginning of development will involve a more in-depth analysis of your company needs by the developer. This may include interviews and observation, and should demand a fair amount of your time. Keep in mind, however, that this is the most crucial phase of development and therefore a sound investment of time.

The developer should then provide you with a functional specification of your requirements, which can be signed off to commence the project. Make certain, however, that signing off the requirements does not bind you to them, but allows for changes to be made for an added fee. The remainder of the process entails the development of prototype(s), testing, implementation and post-development training, support and maintenance.

Software development costs

As with any bespoke project, software development costs are incredibly difficult to estimate. No two development projects are the same, and the specific requirements, development steps involved and problems to overcome for every unique project can affect the price that you pay. As such, the below should be viewed as guidance only, and for any real estimates you should request quotes from software development companies.

In general, the cost of a development project will be based on the number of hours of programming required. Since computer programming is a skilled and highly specialized occupation, hourly rates can be very high, from £30-50 at the bottom end, up to hundreds of pounds per hour for experts in esoteric or obscure systems and programming languages. You should never find yourself in the position of paying an hourly rate for a particular software project; instead, having analysed your requirements, a software development company will be able to give you a fixed price for the project. While this may still be subject to some variation, particularly if major changes need to be made, or requirements change during development, such variation should not be too significant.

As a very rough guide, a typical software project which involves customizing or adapting an existing system or piece of software will cost at least £2,500, rising for more complex, feature rich, or challenging solutions.

A fully bespoke software application, written from the ground up, requires a significant investment, and is worth the money to get a tailored solution for your business needs. Expect to pay at least £5,000 for a relatively simple solution. Again this price will increase as the application demands more sophisticated solutions or is integrated with existing systems.

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My name is Rahmouni k and I am a full time blogger and author of a blog tutorial and news called Automation “Outsourcing My Apps” “Web Tasks and application development outsourcing”

27 thoughts on “Software development outsourcing

    1. Software engineering is developing software programs for computers using engineering design processes.
      Software development is the process of gathering requirements, specifying details, architecture design, documenting, testing, and troubleshooting involved in creating software applications, software frameworks and software components.

    1. offshore development or outsourcing is your gateway to success. Outsourcing software development has proven to be a great success for many companies worldwide.
      Outsourcing will reduce your internal costs while allowing your company to focus on its core competencies.

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