5 Dos and 5 Don'ts To Remember For Successful Development Outsourcing

Businesses outsource numerous of their processes, functions, and operations at present. This approach is cost-efficient and enables organizations to get the similar quality output without utilizing any additional resources.

One of the most popular implementations of outsourcing is evident in the IT sector, where businesses planning digitalization outsource their digital product's design and development to IT agencies. These IT agencies undertake the development process on the organization's behalf and deliver a high-end product with their top-tier specialization.

However, outsourcing development to an agency is not a five-finger exercise, as there is a lot more to it than just hiring a development agency to work on your project. A business needs to carefully strategize its development outsourcing plan and ensure to eliminate all loopholes for the best results.

This blog will provide complete information on what you should and should not do when planning to outsource your IT requirements. By the end of the blog, you will be able to create a fail-proof development outsourcing strategy for the best results.

Let's start the blog with the basics, i.e., fundamentals and advantages of development outsourcing.

Today, businesses of all scales, sizes, industries, and countries are planning to undergo digital transformation and leverage technology. This calls for an approach to building a digital product that a business will use, once it is digitalized.

While there are many ways to build a digital product, development outsourcing is undoubtedly the most preferred and widely recommended option. Here, you have to hire a development agency to work on your project and play a supervisory role in your product's development. Let us tell you that IT service outsourcing is a highly popular idea, and the market size of this sector is expected to cross USD 682.3 billion by the end of 2027.

It is worth noting that while many businesses hire freelance developers as a form of outsourcing, this option is often discouraged as it has numerous limitations and drawbacks. On the contrary, outsourcing your development to an agency ensures you receive a cost-effective, well-coded, and high-quality digital product within relatively less time.

Owing to this factor, businesses prefer outsourcing website development, mobile app development, software development, and a lot more. However, as easy as it might sound, outsourcing your IT requirements to an external development team comes with its own risks and challenges.

There is a lot that can go wrong and can potentially sabotage your project when outsourcing IT services. Here, you need to be wary of the challenges in order to make an optimal choice. Therefore, moving further, we will discuss the dos and don'ts of outsourcing development. This will enable you to recognize the common mistakes that businesses make when outsourcing development and thoroughly understand the concept. Let's start with the dos of outsourcing development.

Seamless communication is the essence of a successful project. The more you focus on easing the communication between your business and the development agency, the higher your project's success potential will be.

Having a transparent and effective communication plan in place is fundamental when outsourcing your development requirements. It is through this communication that you can determine whether or not your project is going in alignment with your objectives. This includes scheduling and conducting milestone-based meetings with the development agency to discuss the project's progress.

Here, the agency provides an update on the project and enables you to review the current stage of the product. These meetings ensure that your product is up to the mark and in accordance with your expectations. This approach is known as agile methodology and is a popular model when outsourcing design and development requirements.

Businesses often think that developing a digital product is a one-time process that stops as soon as the product is programmed. However, as opposed to this popular misconception, digital product development is more than just programming a product and launching it on the internet.

To elaborate, one of the most critical parts of the Software Development Life Cycle (SDLC) is undertaking constant maintenance and updation. Here, the development agencies constantly test the product, eliminate bugs, upscale the platform, and even add new features to it.

This process continues for as long as your product exists in the market and ensures that your offerings are in alignment with the latest market demand. Therefore, by choosing a development agency, you must think in terms of long-term collaboration and appoint a development partner that is capable of providing these services.

A development roadmap is highly useful not only for the development agency but also for businesses planning digitalization. This roadmap breaks the development process into different milestones, which are usually in the form of different stages of the development process.

Based on these milestones and the project's requirements, development agencies provide an estimated timeline for each phase of the development process, which is useful for businesses to determine the product's total time-to-market.

Moreover, the development roadmap also serves as the ground for scheduling meetings between the business and the development partner, as most agencies offer a follow-up meeting after each stage of the development process is accomplished. This ensures that the development process is completed without any hurdles or communication gaps between the two parties.

When planning to outsource your requirements, you are likely to share your business ideas with numerous agencies and development partners to get their input on the project. While this is an important step of the overall development partner hiring process, it is also essential for you as a business to maintain the integrity of your ideas.

This will ensure that your ideas remain unique and are not copied by other parties. Putting a contract in place is the best idea in this aspect. Here, you can sign a Non-disclosure Agreement (NDA) with the development partners when sharing your project ideas.

NDA is a legal contract that ensures that your ideas remain at your discretion and are not copied by others. Moreover, you might also want to sign other forms of contract, like a project contract that usually states the project's overall cost, working model, terms of discontinuation, right of code ownership, etc.

When businesses plan to outsource their IT requirements to an agency, they also have to make a choice between the outsourcing model they wish to appoint, which are onshore, nearshore, and offshore development.

Out of the three choices, offshore and nearshore development are the most popular ones for businesses looking to efficiently and safely optimize the overall cost of their project. However, these approaches also increase the chances of legal, cultural, and language differences.

To elaborate, if you are a US-based business planning to outsource your project to an India-based development agency (offshore model), you also have to brace for numerous legal challenges. This is because the laws and legislation between the two countries highly differ, and so do other factors like culture, time zone, and languages.

While most development agencies are actively working to overcome this challenge by working in their client's time zone and gaining fluency in their native language, this solution might not always work for you. Therefore, you must not neglect these differences and thoroughly discuss them with your development partner before commencing your project.

These were a few things to remember when planning to outsource your IT service requirements. Now, let's discuss what you should NOT do for optimal development outsourcing.

Of course, every business planning digitalization aims to complete the project within limited and, preferably, minimal capital investment. However, it is commonly known that the cheapest way is often not the best way, especially when it comes to digital product development.

Outsourcing development enables businesses to cut down the overall cost of their digital product. However, in many cases, businesses engage in further cost-cutting by hiring freelance developers for outsourcing, skipping stages of the SDLC, and even solely focusing on the development rate when going for offshore development.

This often results in the development of a low-quality product that has a high chance of market failure. Therefore, instead of focusing on cost-cutting, you must aim to build a high-quality digital product, as the ROI in digitalization is extremely high at present.

One of the major challenges that businesses face when outsourcing IT requirements is the communication gap and differences that arise due to ambiguity and lack of coordination. This not only increases the overall development timeline but also results in great dissatisfaction and development hurdles.

As a result, you must be very particular and transparent when sharing the requirements of your project. This will ensure that you and the appointed development agency are on the same page and there is no scope for misjudgment of requirements.

It is the best idea here to get all the ideas and plans documented and foolproof your project. You must also get the development agency's input here and document the technologies that will be used for your project for optimal efficiency and reduced chances of miscommunication.

When outsourcing IT requirements, businesses also have to select an outsourcing approach. The final cost and quality of your product will be largely determined by this choice, and therefore, it is essential that you choose the right and most optimal approach for your project.

Most of the businesses go for the onshore model as, here, it is easy for them to communicate with the development agencies at any time. More than often, this is not the most efficient approach to outsourcing development.

To elaborate, if your business is based in countries like the USA, Canada, Australia, etc., going for the most common outsourcing approach, i.e., the onshore approach, will increase the overall cost of your project. This is because these countries have some of the highest hourly development rates across the globe, and hiring agencies from these countries can eliminate the cost-efficiency factor from your project.

On the other hand, businesses in these countries can optimize the cost of their project and get high-end results by going for the offshore approach. Here, organizations outsource their IT requirements to agencies based in countries like India, Ukraine, and Indonesia. These countries have some of the lowest development rates and are globally leading IT hubs. This will ensure that your digital product is not only cost-efficient but also of superior quality.

One of the most important steps to outsourcing your IT requirements is looking for potential outsourcing partners and conducting the screening process. This is a make-or-break factor for your project and can tremendously impact the end quality of your product.

To elaborate, by rushing the agency research and screening process, you are likely to select the wrong agency for your project. This can significantly increase the chances of market failure, as hiring agencies without adequate experience and skills will decline the overall quality of your product.

On the other hand, by thoroughly researching the market and conducting an extensive screening process, you can find the most optimal development agency for your project that is capable of delivering a world-class product. Moreover, by considering and screening numerous development partners, you can also find the most cost-efficient development agency for your project's outsourcing.

Testing is one of the most essential parts of developing a digital product. Thorough and rigorous QA testing ensures that you launch a high-performing, bug-free, and top-notch quality platform into the market for the best results. However, many businesses outsourcing their design and development requirements overlook this stage.

While it is true that almost every development outsourcing agencies undertake QA testing of their projects, it is also important for you as a business to test the final product before its launch. This will ensure that the final product is at par with your expectations and is in alignment with your business idea.

Earlier, we discussed the benefits of agile methodology in easing communication. This approach is also useful in QA testing and enables businesses to test the product at every stage of its development for the best results and hassle-free amendments.

These were a few don'ts of outsourcing design and development. By avoiding these mistakes, you can efficiently outsource your requirements and get high-end results.