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The tech talent shortage and lack of domain expertise drive the demand for IT development outsourcing. Cost efficiency and faster time-to-market are other benefits for businesses outsourcing their software development.If those sound appealing, you may have already considered outsourcing your IT affairs.

So, how do you choose the right vendor company? Here, we want to help you make a decision you won't regret later.The Freshcode team has compiled these ABCs of software outsourcing to help you better understand how to choose an offshore software development vendor to bring your ideas to life.

Setting your goals and expectations

Imagine hiring a contractor to build your dream house without precise blueprints or communication. The results might be… interesting. The same goes for a software product. Just like any significant project, it hinges on clear expectations. Here's how to set yourself up for smooth sailing (and avoid code-fueled shipwrecks).

Envision your app: its primary purpose, goals, and value proposition

By taking the time to envision your app beforehand, you empower yourself to make informed decisions, attract the right partner, and ultimately, pave the way for a successful and rewarding app development journey. By answering critical questions about your app's core purpose and target audience, you move from a fuzzy dream to a concrete roadmap. This clarity fuels your excitement and allows you to communicate your vision to potential partners effectively.

  • Who is your ideal user? (Demographics, behaviors, pain points)
  • What is the one problem your app must solve?
  • What are the most significant risks and challenges you anticipate?
  • What are the must-have features for the initial launch?
  • If there are any integrations required?

As you see, you don’t have to be an IT expert to answer those questions, and answers to them help you shape your desired outcome. As you start your cooperation with an IT provider, you’ll deepen your understanding of the topic during the discovery phase.

List the technologies, frameworks, and platforms in which the team should be proficient

While specific needs will vary, consider these critical areas of technical proficiency for your software development outsourcing partner:

Cloud Technologies

Expertise in leading cloud platforms like AWS, Azure, and GCP is crucial for scalability and agility.

Development Frameworks

Look for proficiency in popular frameworks aligning with your project requirements.

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DevOps & Automation

Familiarity with CI/CD pipelines, containerization tools like Docker, and infrastructure automation tools shows their commitment to efficiency.

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Security & Compliance

Expertise in industry-standard security protocols and compliance frameworks like HIPAA and SOC 2 is essential for data protection.

Communication & Collaboration Tools

Familiarity with platforms like Slack, Jira, and Confluence enables seamless communication and project management.

At which stage is your product?

You have the outline of where your project is heading. Now, let’s inspect its current state and needs. Using our experience in cooperation with businesses of various sizes, we prepared this handy table to translate business goals into specific IT services to help achieve them:

Freshcode web development outsourcing:
Clients’ business needs and stages of collaboration
Business stage
Preseed & Seed
Series A-C+ Funding
Medium-sized enterprises
Needs
Market Research and Identifying a Clear Product-Market Fit
Launching MVP to the market
Fueling Business Growth
Product/Service Web Development & Optimizing
Scaling and Improving Business-IT Alignment
Management and Tech Support
Freshcode Services
Customer Development
Discovery Phase
Defining Product Road Map
Prototyping
MVP Development
Product Launch and Launch Strategy
Product Marketing / Management
Business Analysis
Improving Customer Journey(Mapping & UX)
Web Development
Web Design
Software Testing
Project Management Flow
Staff Augmentation
Project Management Flow
CTO Consulting
Web Development
Software Testing
Staff Augmentation
Product Marketing / Management
Outcome
Product validation and refined business model
Ensuring the epitome of product delivered and reducing costs of web development
The first iteration of the product
New features and functions of the product
Increasing customer acquisition
New ability to scale while improving the product and customer experience
Identifying key specialists to scale business model and full analysis/automation missing roles
IT support: from PM to CTO
Improved tech ecosystem
Needs
Market Research and Identifying a Clear Product-Market Fit
Launching MVP to the market
Freshcode Services
Customer Development
Discovery Phase
Defining Product Road Map
Prototyping
MVP Development
Product Launch and Launch Strategy
Product Marketing / Management
Outcome
Product validation and refined business model
Ensuring the epitome of product delivered and reducing costs of web development
The first iteration of the product
Needs
Fueling Business Growth
Product/Service Web Development & Optimizing
Freshcode Services
Business Analysis
Improving Customer Journey(Mapping & UX)
Web Development
Web Design
Software Testing
Project Management Flow
Staff Augmentation
Outcome
New features and functions of the product
Increasing customer acquisition
New ability to scale while improving the product and customer experience
Needs
Scaling and Improving Business-IT Alignment
Management and Tech Support
Freshcode Services
Project Management Flow
CTO Consulting
Web Development
Software Testing
Staff Augmentation
Product Marketing / Management
Outcome
Identifying key specialists to scale business model and full analysis/automation missing roles
IT support: from PM to CTO
Improved tech ecosystem

Identify your budget and timeline

Budgeting is not an easy task. Luckily, you’ve made huge steps towards setting its frames, so there are fewer chances for it to bloat.

Remember, transparency is key in software development outsourcing. Be realistic about what you can afford and your working timeframe. A well-defined budget and timeline attract the right partners, help avoid surprises, and set your project up for success.

Choosing a cooperation model

Choosing the right cooperation model depends on your specific project requirements and preferences. Here's a quick overview of the three main models:

Type
of Outsourcing
Staff Augmentation
(Synonyms: Extended Team, CoSourced Team)
Dedicated Team
(Synonyms: Delivery Team, Managed Team)
Project-Based Outsourcing (Synonyms: Outsourced Development Team)
How It Works
It’s a flexible outsourcing strategy that enables you to hire tech talent worldwide.

You can ‘borrow’ the provider’s IT specialists for however long you need it, combining existing resources and contract staff to achieve your business objectives.
You and your outsourcing partner share ownership and responsibility for the project and its deliverables.

It’s the intermediate solution falling between Staff Augmentation and a fully Project-Based approach
Within this outsourcing model, you hand off the requirements to the development partner for the full management of the entire process according to the specifications you’d provide.

It’s the most ‘classic’ of the three types of outsourcing engagements.
Pros
Cost efficiencies
Increased development capacity
Flexibility and scalability
No recruitment risk
Transparent management
Reduced time commitment
Tight communication
Relevant Experience and Expertise
Least amount of control: responsibility lies on your vendor
Clear timelines and outcomes
Best solution for non-tech-savvy businesses
Cons
You should maintain the highest level of project control
Staff training and integrating new team members might take much time and resources
Low efficiency for short-term projects: this model is more profitable within longtime project
Further time for hiring the right team to be completely sure in your partners
High-cost considering the partner’s engagement level (comparing to other models)
Defining full project’s specifications at the beginning could be a challenging task
How It Works
It’s a flexible outsourcing strategy that enables you to hire tech talent worldwide.

You can ‘borrow’ the provider’s IT specialists for however long you need it, combining existing resources and contract staff to achieve your business objectives.
Pros
Cost efficiencies
Increased development capacity
Flexibility and scalability
No recruitment risk
Cons
You should maintain the highest level of project control
Staff training and integrating new team members might take much time and resources
How It Works
You and your outsourcing partner share ownership and responsibility for the project and its deliverables.

It’s the intermediate solution falling between Staff Augmentation and a fully Project-Based approach
Cons
Transparent management
Reduced time commitment
Tight communication
Relevant Experience and Expertise
Pros
Low efficiency for short-term projects: this model is more profitable within longtime project
Further time for hiring the right team to be completely sure in your partners
How It Works
Within this outsourcing model, you hand off the requirements to the development partner for the full management of the entire process according to the specifications you’d provide.

It’s the most ‘classic’ of the three types of outsourcing engagements.
Pros
Least amount of control: responsibility lies on your vendor
Clear timelines and outcomes
Best solution for non-tech-savvy businesses
Cons
High-cost considering the partner’s engagement level (comparing to other models)
Defining full project’s specifications at the beginning could be a challenging task

Fantastic Developers and Where to Find Them

So where to look for the best team and how not to be mistaken?

How to find IT outsourcing Company
Sources
Upwork
LinkedIn
Google Search
Conference & Online Communities
Checklist to choose the best one
1
Company Size: Number of Employees
2
Domain Expertise
3
Location
4
Agility and Versatility: Range of Services

The key searching channels are:

Pre-screening criteria

While researching, pay attention to

  • Hour rates;
  • Is their portfolio fresh and relevant?
  • Do they have testimonials from previous clients?
  • Company size to tech stack ratio - Jack-of-all-trades is a master of none.
  • What security practices do they implement?
  • Are they clear about their communication and development processes?

Making a final choice

When the shortlist of 10-15 companies is ready, select the right software product outsourcing partner.

At this point, you have specifications and other documents defining your business needs. This will help save time during messaging and meetings.

Pay attention to the time taken by the company representatives to respond. How prompt and thoughtful are these responses? Is this team proactive enough? (not to be confused with annoying 🙂)

In good communication we trust. Firstly, it's about:

  • mutual understanding
  • active listening and feedback
  • client data safety and security
  • regular updates and reporting
  • clarity and transparency
  • and risk analysis and mitigation.

So far, so good, but how do you assess these requirements? We believe the answers to the following questions will show you your future partners.

Checklist for a software outsourcing company

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How long has the company been in business?
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Do they have experience in your industry or with similar projects?
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Can they share references from past clients? (Contact them for verification)
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What is the size and structure of their development team? (Experience, certifications)
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What are their preferred communication channels and frequency? (Meetings, reports, email)
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Do they have dedicated project managers assigned to your project?
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How will time zone differences be managed?
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What is their process for handling feedback and revisions?
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What is their pricing model (hourly, fixed fee, etc.)?
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What are the payment terms?
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What is included in their service offering? (e.g., project management, documentation)
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Do they offer any additional services that could be valuable to you? (e.g., UI/UX design, marketing)
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What are the contract terms regarding ownership, warranties, and dispute resolution?
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Where will your data be stored and processed?
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What security measures do they have in place? (Data encryption, access control)
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How do they handle intellectual property rights?
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Do they have established data privacy policies?
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What are the contract terms regarding ownership, warranties, and dispute resolution?
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What is their company culture like?

Takeaway

We believe a professional outsourcing company should be a versatile, multifunctional, and reliable partner offering services from business consulting to turnkey software development. Such IT providers have the tools and efficient approaches to foster clients' product growth.

Are you looking to explore more digital solutions for your business? Let's discuss all possible opportunities at a free consultation.

Build Your Team
with Freshcode
Author
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Artem Barmin
Co-Founder

12 years in software development. Co-founder of IT agency and EdTech company.

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Alexandra Lozovyuk
Content Strategist

With a passion for technology, business ideas and storytelling, bridges the gap between technical concepts and engaging narratives. Writes catchy texts and explores design and marketing trends to find the best experiences to implement.

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