Proven Process to Outsource Your IT Development

February 16, 2024

Want to outsource your IT development, but not sure of how to go about it? Outsourcing software development is nothing new, and many businesses have successfully outsourced and benefited from the cost efficiency and access to a vast talent pool in offshore countries like the Philippines. For example, here at Cloud Employee, we’ve seen the immense improvement in our client’s operations in terms of workforce efficiency thanks to our premium offshore staffing solution.

If you have never outsourced your IT needs, don’t fret, because we are here to help you out. In this article, we’ll address some of the essential steps to take to successfully start the outsourcing process so that your business can be fully set up for success.

Vital Steps To Successfully Start Outsourcing It Development And Set Your Business Up For Success

Establish your project goals

The first and most crucial step to take when outsourcing your IT development involves defining your project goals. There is no way to set your business up for success if you do not envision what you hope to achieve. Once you have defined your goals, you’ll need to communicate them with team members, before exchanging them with the offshore team. Doing this ensures that all parties are on the same page and understand the need and purpose for the project at hand.

Find out the best countries to outsource

You may not already know this, but just because your business is in the US doesn’t mean that you can only outsource your IT development needs to US firms. In fact, research has shown that outsourcing IT development to freelancers in foreign countries is cheaper and results in more efficient work.

Several countries are known for having a good outsourcing culture; they include the Philippines, India, and Ukraine. When choosing the country to outsource to, make sure you consider the time-zone difference to figure out how to execute a good communication strategy.

Research the best software development agencies in that region/area

Once you have settled on a country to outsource to, the next thing to do is find the best IT development agencies located in that region. Researching this is not as complicated as it sounds, as you can simply do a quick Google search to find everything you need to know. The next stage involves putting together a list of about five or six agencies that met your basic requirements.

You can then streamline that list by doing in-depth research on each of their past projects, portfolios, customer reviews, and even referrals. Your selection process has to be very rigorous at this stage, because failing to properly investigate the agency can lead to very disappointing results. A couple of recommended steps you can take at this stage include:

  • Contacting their previous clients and making inquiries about their work ethic, project delivery time, and their overall experience working with the agency.
  • Interviewing the agency’s project manager and technical team lead
  • Checking for similarities between their portfolio and your proposed project.
  • Discussing the number of resources that would be needed to execute your project.

Doing all these things will ensure that you select the agency that is best fit to execute your project and give you your desired results.

State and agree on the working terms

Working with an offshore IT development agency certainly has its perks, but you may also run into certain risks with this, especially with geographical separation and differences in legal structures. For example, what happens if the agency just stops responding abruptly? Or if they deliver a disappointing product and decide to overcharge for it?

To keep yourself and your company covered, you would need to draw up a formal contract with the help of a lawyer. This contract should clearly state the working terms, including other things like the project deadline, payment structure, and how to manage unforeseen happenings. Also, stating the terms of ‘ownership of work’ is necessary and should be included in this contract.

If the product is something you want to be released under your company’s name, this will have to be clearly stated in your formal contract.

Establish milestone payments

Making payments in milestones is a good idea. This involves making payments for every module that is vetted and approved by you. Doing this ensures that the agency doesn’t slack on their work and that you remain in control of the project at all stages. Of course, keep in mind that you will need to include this term in your formal contract.

Consider after-service support

Even with the best-designed software products, there is still the possibility of running into technical issues that can only be navigated by the team that built it. That is why you need to consider discussing after-service support with the agency. Before making your final payment, address service support, and how you plan to compensate the agency for any technical support they provide after the product has been finished.

You’ll also want to avoid hiring someone else for this service because not only is very costly, but they probably won’t have extensive knowledge of the product the way the original team does. So, try as much as you can to ensure that you retain the agency for after-service support.

Build a relationship for the future

If the agency you worked with did an excellent job on your project, then it’s logical not to let them go. Building a good business relationship with them can benefit you, especially if you need other projects carried out in the near future. Even after the project is done, make an effort to establish a relationship for the future.

To Summarise

So, there you have it. We have put together a comprehensive 7-step process for successfully outsourcing your IT development to help you avoid negative software development experiences. These steps will also set your business on the path to success. Note that this is not a blanket guarantee for success as there are external variables involved. But it will help you avoid inevitable curveballs along the way.