Outsourcing Software Development Key Considerations

Outsourcing software development can be tough. With so many variables to consider, costs to weigh up and risks to balance, making a confident decision is often a major struggle. After all, it's a big call and will likely have lasting impacts on your commercial success.

With so much on the line, it's critical you have a view on the details that really matter when it comes to making that all important decision.

‘37% of organisations are planning to increase the amount of work to outsource for application development.’ - Computer Economics

It should go without saying, but this course of action really could be the difference between success and failure. As such, you need to identify and evaluate the key factors that will influence the ultimate outcome, but what are they? What should be front of mind when you make the call? Let's take a look.

The Role of the Outsourced Software Development Project in Company Success / Survival


Probably the most important question you need to ask before committing to a using a partner for a software development project; how will this impact my business if it goes wrong? What is the worst case scenario? Understanding the consequences of a potentially negative experience is critical to identifying risk and making a strategic decision. If the project is of the highest importance, you need to be sure that you choose the right partner to not only get the job done, but on time and to the greatest possible standards too.

If the software development project is of the highest importance, you need to be sure that you choose the right partner to not only get the job done, but on time and to the greatest possible standards too.’

The importance of the project to your companies’ future will play a major role in determining your outsourcing strategy, and so it’s critical you appreciate the potential consequences of both success and failure.

Governance and Ownership of the Outsourced Software Development Project

Any outsourced software development partner will require internal management. There needs to be a key point of contact in your business with full visibility over the relationship and an understanding of what’s expected and when. This person will need to ensure external teams are effectively onboarded into project management and communication tools, and help them appreciate how company communication and process works too.

In addition, this individual will need to be accountable for the output developed and responsible for raising concerns as they arise. This is critical to a harmonious relationship as expectations, processes and communication will likely differ in the early stages. It’s essential that someone is there to drive collaboration and resolve challenges on both sides.

If you don’t have the internal resource available to properly manage your external partner, then you may want to reconsider outsourcing altogether, as a partner left completely to their own devices is largely working in the dark, and unlikely to deliver the output you’re looking for. It’s in everyone’s best interest to have a key contact who can nurture the relationship for the benefit of all involved.

Beyond internal management, you also need to consider how your development partner typically operates too. Identifying how their onboarding and project management systems work is key to building an efficient and successful relationship. In many instances, it’s likely compromise will be required to find the best working practices for all involved.

Intellectual Property Challenges and Protection


Before engaging in an outsourced software development strategy, you first need to evaluate the information involved in the project and ask yourself a few key questions:

  • How integral is it to your business success?
  • How confidential and sensitive is it?
  • If it leaked into the public domain, how much damage would it cause?

These help measure and audit the level of risk involved in sharing key information. In some instances, just the knowledge that the project is in development in the first place may be top secret information and so you need to think carefully about how you protect your data. If the information is highly valuable, then you probably don’t want to be sharing it across international borders, NDAs can only go so far and with external partners, there’s always the risk of something leaking out, accidentally or otherwise.

Communication Capabilities and Teamwork


Communication lies at the heart of any good relationship and so it’s essential you find an external development partner that can effectively collaborate with you every step of the way. Project strategy, transparency, management and delivery all need to be regularly communicated to ensure all parties are working from the same page. This is particularly important when it comes to developing alignment on deliverables, deadlines and problem solving. The better the working relationship, the more successful it’s likely to be.



The best outsourced software development partners don’t come cheap, so you need to think about how your budget may influence the output you receive. They say ‘you get what you pay for’ and this applies to the world of outsourced software development too. You need a good budget to receive great output; high quality outsourcing should not be seen as a cost-effective alternative to other development options.

‘They say ‘you get what you pay for’ and this applies to the world of outsourced software development too.’

It’s important to consider the comparative costs between outsourcing software development and other opportunities before making a decision. When you consider the cost of traditional recruitment; freelancers, contractors, recruiters etc. you can quickly see that the financial difference is minimal at best.

You also need to consider how your budget is going to be spent and ensure there is a clear understanding around resource allocation within projects.

Due Diligence on the Outsourced Software Development Partner


Finding the right outsourcing partner is just as hard as making the decision to outsource in the first place. You need to ensure they are the right fit, have the right capabilities and can get the job completed to an acceptable standard. Of course, this is easier said than done. To ensure you find a partner who meets your expectations, you need to do your due diligence, and in many cases this is a multi-faceted process. After all, it’s essential you evaluate everything from the experience and capabilities of the external team, to their company culture, communication and language skills. It’s a big undertaking!

It’s essential you evaluate everything from the experience and capabilities of the external team, to their company culture, communication and language skills.’

These characteristics all influence the nature of your relationship and may also impact the delivery of the project. With so many variables to consider, this is often the hardest part of the outsourcing process, particularly as the consequences of the wrong choice are so high.

Before taking the plunge on the outsourcing of your software development project, you first need to weigh-up the advantages and disadvantages of such an approach. In some instances it may not be the best course of action for your business, and so it’s important that careful consideration is made before pushing ahead.

You need to take into account multiple factors while you evaluate the opportunity. As a significant strategic investment, it’s critical you take the time to measure your companies’ needs, and compare them appropriately with external partner’s capabilities and alternative options too.

The more effort and time you put-in to making a final decision on outsourcing a software development project, the more prepared you’ll be in the event you decide to commit. This will ensure you have clarity on all factors involved and are ready for the opportunities and challenges outsourcing presents.

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