successful outsourcing

Top 5 Tips for Successful Software Development Outsourcing

Successful outsourcing is not easy to achieve. 

Especially when IT outsourcing problems cause “20 to 25% of outsourcing relationships to fail within two years, and 50% fail within five”.

Read the main reasons why software development outsourcing fails most of the time.

However, when done right, outsourcing can have a satisfactory outcome.

Here are 5 tips for a successful outsourcing experience:

1. Weigh the advantages and disadvantages

First off, you need to make sure you know all the crucial aspects of outsourcing to avoid charging in without enough information.

Overall, successfully outsourcing a project reduces a company’s overheads significantly, since the costly process of team building, selecting appropriate candidates, and retaining them is non-existent.

You can read about global software outsourcing rates in another post.

Outsourcing companies offer professional support for as long as necessary; some even form an ongoing partnership with their contractors.

You can save a lot of time and effort by outsourcing your software development.

But IT outsourcing problems still exist, such as tricky communication and data misuse. We will explain both these issues and their solutions in detail.

Though pros and cons of outsourcing and its success depend strongly on what you want to outsource, its scope, your budget, timeline, and expectations from project deliverables. So make sure to take these factors into account as well.

Weighing all the advantages and disadvantages of outsourcing and deciding that it’s suitable for your project is the first step towards successful software outsourcing.

2. Identify the ideal person or organization you want to work with

The next step toward successfully outsourcing your software is finding a suitable outsourcing partner.

Make sure you are clear on the following questions before you make a choice:

  • Do you want to work with a freelancer or an outsourcing company?
  • Would you consider working with offshore companies or foreign individuals?
  • If you do, do you have a limit in mind for the time zone difference? How do you want to manage time zone difference?
  • What are your requirements? What are the criteria your outsourcing partner needs to meet?
  • Do you need an ongoing partnership? Does your partner offer these services?
  • How is their reputation? Have they had any legal problems?
  • How many successful projects have they completed? Were their previous clients satisfied with their work?

3. Be clear about your goals and what you want

If you don’t exactly know what you want, chances are you won’t be able to manage your outsourced project.

If you want a successful outsourcing relationship, it’s vital to have a good understanding of your project’s outsourced area.

After grasping your project completely, it’s better to get things down and share them with your outsourcing partner in detail.

Unclear goals and objectives cause a large percentage of project failures, as you can see in the diagram below:

outsourcing projects failure percentage

Read more about other project management stats on Workamajig.

Also, uncertainty about your goals and what you want will lead to project pivots and sudden time and cost overruns. 

A study published in Harward Business Review stated that, on average, 27% of the 1,471 IT projects they analyzed had cost overruns, and 70% exceeded their timelines.

As you have seen in the diagram above, budget overruns and exceeded timelines lead to project failure as well, so you must avoid them at all costs if you want to have a successful outsourcing relationship.

4. Keep the communication going

Communication is the most predominant problem of outsourcing for some companies.

The language barrier and cultural norms become a problem when working with offshore companies or foreign individuals; they can cause misunderstandings and miscommunications in many instances.

Make sure you choose a partner you can communicate with well for a more smooth sailing and successful outsourcing experience.

Also, bear this in mind when you are working with an outsourcing partner; emails aren’t efficient! 

So try to use other tools to communicate and manage your project more effectively, such as Trello (for keeping track of your project) and Slack (to communicate easily).

Don’t forget to do regular check-ins and give sufficient feedback.

You don’t want your outsourcing partner to have to redo a big chunk of work just because you missed the opportunity to give them feedback in time.

5. Don’t forget about copyright ownership and NDAs

The most worrisome aspect of outsourcing for many companies is the misuse of sensitive data.

Some companies even avoid sharing some critical data with their outsourcing partners because they don’t want to have their idea stolen. 

Signing an NDA (non-disclosure agreement) or including a clause in the written contract that determines the owner of outsourced work will solve these problems.

We have explained everything you need to know about copyright ownership and outsourcing in another post, make sure to check it out!

Successful outsourcing examples
slack logo

We have already mentioned Slack as a great communication tool, but you have probably heard about it already.

You should know that Slack is a notable example of successful outsourcing.

When Slack first started, it was an internal app used by a small team. But when the company decided on releasing it externally, they hired developers and designers from MetaLab to design their app, website, and even their logo.

After this phase, the company started inviting other users and teams to test out their app and provide feedback.

Today Slack accounts for 5 million daily users.

adwords logo

Back in 2011, Google used outsourcing for AdWords’; 1000 reps from all over the world handled its phone and email support.

AdWords is now one of Google’s top-grossing products.

Google continued this road and is currently increasingly outsourcing some of its non-core tasks.

skype logo

Skype initially outsourced its back-end development and was released in 2003.

The founders had the idea but lacked the professionals to execute it, so they hired three Estonian developers named Ahti Heinla, Priit Kasesalu, and Jaan Tallinn. 

Skype was sold to Microsoft in 2011 for $8.5 billion.

What does WINaTALENT do?

WINaTALENT is a freelance platform that offers various estimation services as well.

We have a network of vetted freelancers who can take care of your every software need.

We also help you get a better sense of your product’s deliverables and its completion process through our estimates.

Learn all about WINaTALENT’s project estimates.

Want your project estimated? Sign up now!

2 thoughts on “Top 5 Tips for Successful Software Development Outsourcing

  1. As a business owner, you must always think forward to stay ahead of the game. It doesn’t matter how young or old your business is; you need to take risks and come up with smart innovations for the betterment of your business operations. Having said that, you need to indulge in custom software solutions to scale up your business. While employing an entire team seems infeasible, software development outsourcing has its advantages.

  2. Being detail oriented with a development mindset is crucial for any development partner you choose. Outcome must be prioritized over output. Here, the key consideration is that big is not better. Outsourcing must be done on a need-to-need basis with the right outcome in mind.

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