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Top 7 Things to Keep in Mind When Outsourcing Software Projects

Guest PostGuest Post
February 13, 2019

Editor’s note: This is a guest post by Igor Tkach, CTO at Daxx. 

Many companies outsource software projects. This is because outsourcing software projects offers companies with the flexibility to have the workforce they need, when they need it, while reducing cost and improving output quality.

Despite these benefits, businesses often report that outsourcing software projects does not work out for them. This is because they encounter difficulties working with the outsourced software partners.

To have a positive experience with an outsourced software partner, it is important to understand the difficulties businesses encounter, and what can be done to avoid such situations.

1. Make sure you have the right partner

One of the main problems that companies have is working with a partner that is not a true fit for their unique needs. When selecting a software development vendor, it is important to make sure that they are the right fit for your business and the specific project scope, and not just skilled on paper. If the partner is unable to understand the product requirements and translate them into measurable business outcomes, the work together will not yield positive results.

That is why businesses looking to outsource software projects need to align expectations with vendors and make sure that all project milestones and requirements are clear before selecting a partner to move forward with. One of the best ways to make sure that a potential partner is able to perform the necessary work is by examining online reviews and speaking to former clients. Remember to review the vendors recruitment process to make sure they are able to recruit top talent for your software needs.

Companies that want to find the best possible vendors or partners for their outsourced software needs must be active in the candidate selection process, evaluating the soft and hard skills of each potential candidate and choosing the ones whose abilities and past experience best corresponds with their unique project requirements It is also important to have a single point of contact that understands the full project scope and is able to relay your company needs to the executing team.

2. Be aware of team integration and onboarding

A key difficulty companies encounter when working with outsourced software partners is the difficulty of onboarding and integrating a new team into an existing company. That is why businesses looking to outsource software projects need to make sure they are aware of the time it takes to integrate a new team and onboard a new vendor into their current workforce. This is particularly important if working with geographically distributed teams. To ensure smooth operation, businesses must be able to think through the initial stages of partnership and prepare introductory materials about the product, the process, the stack of technologies, and roles of every specialist on the project.

A great way to ensure smooth transition is to establish proactive communication with your remote team. Arrange daily calls, weekly Scrum retrospectives, and at least one onsite trip for your dedicated developers (for a week or two) to make them feel like an integral part of your organization. To make the team integration even more efficient, arrange regular onsite trips every 3-6 months.

Be sure to confirm with your selected vendor that they have an onboarding strategy for you to implement. Your outsourcing partner should take care of the onboarding, retention, and stability of your remote developers while you need to be responsible for preparing the infrastructure and making sure all the roles and responsibilities are defined and assigned to the right people.

3. Allocate sufficient resources for team management

The success of your outsourcing efforts depends on the management and organization of your dedicated team. That is why, in order for an outsourced freelance project to be successful, it is imperative that businesses allocate sufficient resources for experts who will play a crucial role in organizing the outsourced team.

Key experts include product owner, software architect and HR/client manager. The product owner is the responsible for bridging the gap between business requirements and remote developers, and routinely ensures business goals are clarified and achieved with the best-of-breed solutions. The role of the product owner should be assigned to a single person that will be a dedicated point of contact.

The software architect is a crucial expert in any outsourced software project and serves as a mentor and key technology enabler on the project. A software architect is responsible for the technical success of your dedicated team and ensures that the team follows the product architecture.

It is also important to allocate resources for an HR/Client Manager who will be responsible for ensuring remote specialists are satisfied. This person acts as an escalation point for any complains and suggestions, ensuring smooth cooperation between you and your dedicated team.

4. Be aware of cultural and time differences

A key thing companies need to do when working with outsourced software vendors is make sure they are aware of the cultural and time differences that the vendor has. It is best if the selected vendor has overlap hours so that teams are able to stay in sync and discuss progress and issues in real time.

Plan all the tasks in advance and clarify the details of every requirement. This way your dedicated team won’t experience any downtime due to time difference or unclear KPIs.

Since cultural differences may have a negative impact on the overall outcome, consider selecting software development vendors that have a similar mindset and business culture. For instance, Asian outsourcing vendors have a completely different mentality and the way of doing business compared to the US and European. This can lead to a number of misunderstandings and affect software quality.

5. Have a single project manager or point of contact

One of the most difficult things businesses encounter when working with outsourced software partners step from miscommunication. To avoid this, it is crucial to have a single point of contact on the side of your outsourcing vendor that will control the quality of service delivery.

In big teams consisting of 10 or more people, this role is assigned to the delivery manager or site manager. This manager focuses on keeping the clients satisfied with the company’s services and managing team performance. He solves any reliability and technical issues, tracks service metrics and reports on the processes and progress of the dedicated team. In smaller teams, you may have a completely flat structure (for teams up to 3-4 people) or this role can be combined with the role of a team leader.

6. Balance software quality expectations and development expenses

Companies looking to outsource software projects need to recognize if they are looking for a partner who can deliver the results they need, or a partner who will deliver results for cheap. If looking for ‘hands for hire,’ the quality of work may not meet expectations. Instead of looking to reduce costs and expect quality results, select a software outsourcing provider that can deliver true value and become a long-term business partner.

Your software development partner should have strong organization and effort estimation skills and a complete understanding of your business domain. This way, your vendor will be able to provide best technical solution for any business problem that may arise. Having a value-centered approach may help you find competent developers with a much wider set of skills and in the long run, this will ensure that they are able to deliver the desired quality within the required time frame.

7. Ensure collaboration tools meet the requirements of your remote team

Working with a diverse and often geographically dispersed team requires effective digital communication and collaboration tools.

A well-coordinated software development process will incorporate multiple tools for communication (e.g. Slack), video conferencing (e.g. Skype), task tracking (e.g. Jira), continuous integration (e.g. Jenkins) and more. To ensure that your in-house and remote development teams work in unison and maintain a sustainable workflow, use the same set of tools for all teams.


At the end of the day, working with a software development partner can be a great way to improve output while reducing costs. Companies that find working with outsourced software partners a struggle need to make sure that they select the right partners and have a work process that makes the work clear and smooth for all parties involved. With the right partner and execution, software outsourcing can deliver real value to businesses.

Igor Tkach is the CTO at Daxx. He is an experienced business-driven executive, who writes about agile development best practices, product management, development team structure optimization, increasing leadership capacity in organizations, and more. Igor helps tech companies from all over the world create and run value-driven R&D centers, build robust and scalable business processes, and improve their performance.

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