Outsourcing is the not-so-new talk of the town.
- 3 out of 5, that’s a whopping 60% of businesses are turning to software development outsourcing services – as noted by back4app.
- Furthermore, the outsourcing industry is not planning to hold back and is expected to reach a market size of $904.9 billion in 2027 – as predicted by Research and Markets.
As exciting as these numbers sound, there is a darker side to outsourcing that needs your attention.
- Close to 39% of software development outsourcing deals end up failing, either completely or partially – according to the Global State of the Shared Services & Outsourcing Industry Report
An eye-opener for sure!
But despite the risk involved, there is still 61% of outsourcing software development deals that hit the success mark.
As a leader, wouldn’t you want your business to join the successful 61% club?
We heard you!
To boost your chances of success with outsourcing software development companies, we have done the legwork and prepared a list of actionable steps to help you navigate the software outsourcing landscape.
What will you read today?
- – What is software development outsourcing? Do you need it?
- – Common challenges encountered during outsourcing and how to overcome them
- – Best practices for successful outsourcing
- – The USA’s top offshore outsourcing software development companies
Let’s get going without further ado.
But First, Are Software Development Outsourcing Services Really Meant for You?
On the fence about software outsourcing services?
Thinking if outsourcing software development is only meant for startups or companies that are non-technical?
You are in the wrong zone for big-time now!
Giants like GitHub, Slack, and WhatsApp have also benefited from outsourced software development services. As outsourcing has potentially helped them build sustainable web apps during the early phases of their journey.
Whether you’re a young start-up or an established enterprise, strategic partnership with software development companies will bring you benefits like –
- Shared risks
- Efficiency boost
- High-cost savings
- Competitive edge
- Direct access to experts
- Comparatively faster time to market
- Compliance with the latest standards
You can get all of this with a single right decision that you make at the right time – invest in the right offshore software development outsourcing company.
Outsource software development and let the experts do the job for you!
But, you have to be sure that things are done correctly.
(Before we proceed to the real talk, here’s a quick recap of software development outsourcing services, something you may already know. Feel free to skip if you’re familiar with the basics, but don’t miss the read as there is a lot about partnering with outsourcing software development companies that you should know.)
What is Software Development Outsourcing?
Outsourcing software development is the delegation of software development to an outsourcing software development services provider who provides all the resources to deliver them.
This process involves preparing a team of skilled software developers, designers, testers, infrastructure engineers, and quality assurance experts. Additionally, a dedicated project manager to ensure seamless project execution.
Moving on, we’ll look at common challenges encountered during software development outsourcing contracts and how to overcome them.
Common Issues with Outsourcing Software Development Companies and How to Avoid Them?
Having served a global clientele and as an outsourcing software development company we understand how critical a project failure can be.
To avoid the same – here’s a guide on the challenges you should know while choosing from the best outsourcing software development companies in the USA.
1. Communication Barriers
Communication is the key!
Working with an outsourced software development company can fail miserably if you fail to communicate your business objectives and requirements clearly.
The most significant advantage of outsourcing to software development companies is the access to a global pool of talent. But one of the main difficulties is – communication problems due to timezone differences and cultural barriers.
There are definitely going to be a few other challenges such as aligning the time zones, aligning the language for communication, and understanding each other’s cultures.
Alone access to talent isn’t going to get you to the desired outsourcing results. You need to build the connection and communicate effectively to reach the desired business goal with the outsourcing software development company.
Solution:
You can use collaborative tools such as Jira and Asana, along with video or audio calls to communicate with your remote team at regular intervals.
This is the best way to bridge the communication gap and achieve success with the outsourced software development company.
2. Failing to Understand the Scope of the Project
Before outsourcing a software development project to an offshore outsourcing software development company, you need to clarify the requirements, set up a regular delivery schedule, and decide on the project’s overall scope.
Failure to communicate such details may result in distortion of the project scope.
In the absence of clear project scope, your team of outsourced software developers will continue to work in a silo, and it will widen the gap between your expectations and the final product.
Solution:
The Software Requirements Specification (SRS) document can be an excellent tool that gives your software development team a clear insight into the requirements.
Clear documentation is the first step in ensuring that your expectations and the outputs provided by the outsourcing software development companies are in sync.
3. Non-Adherence to Code Quality Standards
Determining whether your outsourced software development services provider, who is an extension of your in-house team, adheres to the quality standards could be a great challenge.
Code quality is an ambiguous term because there is no strict definition of high quality and low-quality code. Code quality is a set of attributes that must be communicated with the software outsource company, upfront.
Solution:
A well-documented and well-tested code format following best practices for the programming language is an ideal solution for long-term success and error-free implementation.
4. Ambiguity Among Stakeholders
A major disadvantage of outsourcing to software development companies is the lack of ownership.
If you opt for a software programmer on a contract rather than a full-time basis, ownership of the project becomes uncertain.
This ambiguity in the software development process can lead to inconsistencies in output, as no project leader or team will take the initiative to finish the project on time.
Solution:
While outsourcing software development, you need to make sure that there are dedicated project managers and resources, consistent and accountable throughout the software development outsourcing process.
These are the individuals you hold accountable and stay connected through email threads, video calls, and other communication channels.
5. Ambiguity in Contract Signing
It’s more than difficult to hand over the full-fledged budget to the outsource software development firm at the very beginning of the project development.
This is mostly true in the case of startups as it doesn’t create a legal appeal to do so and overlooking negligible loopholes may be an open invitation to substantial financial losses in the future.
There is an old saying – “Get it in Writing” which comes true in case of software development outsourcing services as well.
Solution:
The detailed contract, which has been prepared perfectly in all terms, acts as a roadmap while working with outsourced software development companies and saves you from unwanted surprises in case things go south.
Now that you’ve seen the common pitfalls of working with software development outsourcing companies and how to overcome them, let’s uncover the best practices to follow while collaborating with them.
Best Practices to Follow While Working with Software Development Outsourcing Companies in the USA
Drafting a precise contract free from any legal errors helps you ensure that no significant details are missed during software development outsourcing.
Have a look at the best practices that you should keep in mind when partnering with an outsourcing software development firm in the USA:
Define Deliverables and Timeframes:
The outsourcing contract must clearly define the expected output in the form of bullet points and approximate timelines by which the software development outsourcing services company shall complete the project.
An outsourced software development company that adheres to agile development practices is in a better position to provide an accurate picture of the project lifecycle.
Feature-based Contracts Over Time-based Contracts:
At times, contracts that are made for time-based software development outsourcing services don’t adhere to the expectations that are set forth.
Thus, instead of a time-based contract, going for a feature-based agreement can create a great drive for the software developers who are working on the project.
Feature-based agreements help to keep the developers encouraged to stick to the timelines and ensure the ownership of the outsource software development company you are working with.
Installment Based Payment:
Rather than paying upfront, instalment-based payment structure facilitates the division of the project into different phases and sets the payment schedule aligned with the completion.
Ensure regular follow-ups in the process and schedule meetings with the team to maintain project momentum and keep everyone aligned.
The instalment-based payment system brings a lot of clarity to the agreement and makes disputes resolution easier later on.
Code Collateral:
Accepting apps without code collateral should be avoided when working with outsourcing software development companies.
The code you receive at the end must be free of any malware and subject to an acceptance test period.
5 to 10 days is a reasonable acceptance test period during which you need to identify and rectify errors in the software application at the software development consulting company’s expense.
Your agreement should also specify the management of web hosting or app store submissions thoroughly.
Maintenance Support:
An outsourcing software development company may pause work in the middle of the software development outsourcing project in the absence of any support contract.
The maintenance assistance agreement should clearly state how long the team will support the software programs they create and deliver.
Specifying support terms in the project increases the sense of ownership for software developers working on building your app. As they know that the poor-quality code means more rework in the future.
Intellectual Property Rights:
As a software development client, you have complete ownership of the intellectual property rights. But make sure you get it documented by including the intellectual property rights clause in the contract.
This will save you from future headaches in the event of a rights violation.
For instance, this will prevent the outsourcing software development firm from reusing the code written for your application when working for your potential competitor in the future.
Privacy Agreement:
The Privacy Agreement is a non-disclosure agreement that guarantees the confidentiality of the proprietary information you share with the outsourcing software development companies.
This ensures that your ideas, concepts, and sensitive information cannot be copied or shared with others.
The non-disclosure and privacy agreement must be signed by the offshore outsourcing software development and the individual software developers involved.
Compensation Clause:
Compensation clauses are legal provisions in the outsourcing services agreement that relate to the distribution of risk and liability between you and the outsourced software development company.
It states who will bear the legal charges if any dispute arises in the software application development process.
Termination Clause:
It’s always a good idea to be prepared for the worst.
Make sure to include a termination clause in your software outsourcing services agreement that clearly states that termination will occur if the outsource software development company fails to complete the project as per requirements or fails to satisfy certain conditions.
Jurisdiction to Solve Legal Disputes:
Outsourcing software development companies have made software development a truly global process.
Specifying the jurisdiction in which any dispute will be settled helps you clarify the applicable law governing the project.
Up next, we bring you the USA’s top offshore outsourcing software development companies so you can make an informed choice without hassle.
4 of the Best Software Development Companies in the USA
Outsourcing to a software development consulting company can result in chaos if you do not have clearly chalked business objectives, or neatly specified business requirements.
Moreover, it’s important to have the right outsourcing software development company to support your project development.
To avoid a crash associated with project outsourcing, we bring you to the leading software outsourcing companies known for their reliability and expertise.
Integrative Systems
Headquartered in Chicago, USA, Integrative Systems is a leading offshore outsourcing software development company.
It has been known for delivering promising custom software solutions for more than twenty years.
Integrative Systems takes pride in prioritizing clients’ success and delivering customized solutions at double the speed and half the cost compared to other outsourcing software development companies in the USA.
This renowned offshore software development company in the USA is committed to supporting organizations, big and small, in their long-term digital transformation.
Regardless of the starting point of your project, team Integrative Systems adds value at every stage, ensuring successful results from idea to execution.
Awards and Recognitions:
- Inc. 5000 List of America’s Fastest-Growing Companies
- Great Place to Work Certified
- IBM Silver Business Partner
- SOC 2 Type II Certified
- AICPA SOC Certified
- Microsoft Partner
Binmile
Binmile is one of the leading outsourcing software development companies in the USA with a global presence.
With a record of satisfied clients and successful projects, Binmile has proved itself as a trusted partner in the domain of enterprise custom software development.
Their dynamic team includes software development professionals who are experienced, passionate, and excited to transform your business with custom software innovations & market-leading solutions.
Digital Silk
Digital Silk is known as an outsourced software development company in the USA that offers end-to-end web development services.
Founded in 2019, Digital Silk is working with brands of all sizes and across industries to plan, design, and develop custom solutions that drive brand awareness, increase onsite conversions & boost brand loyalty.
At Digital Silk, they are not just software developers but a team of experts who turn your vision into digital reality with unparalleled expertise and creativity.
Scopic
One of the best software development companies in the USA, Scopic is a cost-effective, cross-continental technology partner you can rely on.
From medical, fitness, education, entertainment, trading, manufacturing, and finance to the cannabis industry, Scopic offers software development outsourcing services powered with innovative digital marketing solutions to make your product meet its spotlight.
Scopic’s promise – we plan, build, and promote new applications – so you don’t have to serve as a testament to their excellence.
Final thoughts
As we come to the end of this blog, we’re confident that you gained actionable insights about software development outsourcing than yesterday.
Don’t let the over smart outsourcing software development companies ruin your outsourcing project experience.
However, it would be an exaggeration to claim that the above-listed threats are the most common by software development outsourcing companies in the USA.
Also, there are no concrete rules for outsourcing development services as it all depends on the project’s features and specifications.
However, if you are struggling to outsource software development services successfully, consider our tips and suggestions.
This blog was brought to you by Integrative Systems.
At Integrative Systems, we have helped businesses of all sizes to improve their ROIs from a mere 5% to 20% and empower them to evolve with the ever-changing business landscape at twice the speed and half the cost.
If you are still left with any queries regarding outsourcing custom software development services or partnering with outsourcing software development companies, feel free to connect with us, and we’ll be happy to answer your questions.
Please send your queries at [email protected], and our team of experts will get back to you within 2 business days.
With technology growing by leaps and bounds at a fast pace, outsourcing software development companies are on the rise with the increasing demand for the latest innovative development approaches.
If you are stuck in a dilemma that outsourcing software development is meant for only startups or companies that are non-tech, you are in the wrong zone for big-time now!
Giants like GitHub, Slack, and WhatsApp are also benefited from outsourced software development. During the early phases of their journey, outsourcing has potentially helped them build sustainable web apps.
In fact, hiring an outsourcing software development company has its own benefits to offer such as; improved efficiency for your business, reduced risks, comparatively less time to market, and high-cost savings. You get all of this with a single right decision that you make at the right time.
Outsource software development and let the experts do the job for you!
But, you have to be sure that things are done correctly.
How to create an effective outsourcing strategy?
Outsourcing can result in chaos if you do not have clearly chalked business objectives, neatly specified business requirements, and the right outsourcing software development company to support your project development.
To avoid a crash before you launch your project you need to define a clear outsourcing strategy for yourself. Here are some essential factors to consider for designing an effective outsourcing strategy.
Common issues with outsourcing custom software development companies and how to avoid them?
Having served a global clientele as an outsourcing software development companies, we understand how critical a project failure could be and avoid the same here’s a guide on the things that you should care about while choosing the best out of the outsourcing software development companies.
1. Communication Barriers
Communication is the key!
Working with an outsourced software development company can fail miserably if you fail to communicate your business objective and requirements clearly.
The greatest advantage here while with an outsourced company is the access to the global pool of talent. Getting experts to do the job is amazing, but they need to understand what are you expecting from them – clear communication.
The most significant advantage of outsourcing development is the access to a global pool of talent, but one of the main difficulties is – communication problems.
There are definitely going to be a few challenges such as aligning the time zones, aligning the language for communication, and understanding each other traditions and cultures.
Alone access to the talent isn’t going to get you to result, you need to build the connection and communicate effectively to reach the desired business goal with the IT development.
The use of collaborative tools such as Jira and Asana, with a remote team via video or audio call, at regular intervals, is the best way to build a communication path and achieve success with an outsourced software development company.
2. Failing to Understand the Scope of the Project
Before outsourcing a software development project to a remote team, you need to clarify the requirements, set up a regular delivery schedule, and the project’s overall scope.
Failure to communicate such details may result in distortion of the project scope. Without resolving these issues, software developers will continue to work in a silo and widen the gap between your expectations and the actual product.
The Software Requirements Specification (SRS) document can be an excellent tool that gives the development team a clear insight into the requirements. The clarity in the documentation is the first step in ensuring that your expectations and the outputs provided by the third-party company are consistent.
3. Non-Adherence to Code Quality Standards
Determining whether your outsourced software development services that is an extension of your in-house team adheres to the quality standards, could be a great challenge.
Code quality is an ambiguous term because there is no strict definition of high quality and low-quality code. Code quality is a set of attributes that must be communicated with the outsourcing partner, upfront.
A well-documented and well-tested code format with best practices for the programming language in which the application is written is necessary for long-term success and error-free implementation.
4. Ambiguity of Stakeholders
A major disadvantage of outsourcing is the lack of ownership of the project.
If your outsourcing software development company chooses a programmer on a contract rather than a full-time basis, ownership of the project becomes dicey. This disturbance in the project development process can lead to inconsistencies in output, as no project leader or team will not take the initiative to finish the project on time.
While outsourcing software development, you need to make sure that at least some project managers and resources are consistent throughout the process of development.
These are the people you can hold accountable and stay connected through email threads, video calls, and other communication channels.
5. Ambiguity in Contract Signing
At the very beginning of a development project, it’s more than difficult to hand over the full-fledged budget to the outsource software development firm, especially in the case of startups. It doesn’t create a legal appeal to do so as well and signing a contract overlooking loopholes like these may be an open invitation to substantial financial losses.
There is an old saying – “Get it in Writing” which is true in the case of software development as well.
The contract, which has been prepared perfectly in all terms, acts as a roadmap while working with outsourced software development companies and will save you from losses in case things go wrong.
Best Practices to Follow While Working with an Software Development Outsourcing Companies
Drafting a tight contract free from any legal errors helps ensure that no significant issues are missed during app development. Have a look at the things that you should keep in mind when drafting an agreement with an outsourcing software development firm:
Define Deliverables and Timeframes:
The contract must clearly define the expected output in the form of bullet points and approximate timelines by which the company will complete the work. An outsourced software development company that adheres to agile development practices can help provide an accurate picture of development progress.
Feature-based Contracts over Time-based Contracts:
At times contracts that are made for time-based development don’t adhere with the expectations that are set forth. Instead going for a feature-based agreement can create a great drive for the developers who are working on the project.
Feature-based agreements help to keep the developers encouraged to stick to the timelines and ensure the ownership of the software development company you are working with.
Installment Based Payment:
This payment structure facilitates the division of the project into different phases and sets the payment schedule as these stages are achieved—plan regular follow-up in the process and schedule meetings with the team. Instalment based payment system brings a lot of clarity to the agreement and makes it easier to resolve any disputes later.
Code Collateral:
Accepting apps without code collateral should be avoided when working with an outsource software development firm. The code you receive at the end must be free of any malware and specify an acceptance test period.
5 to 10 days is a reasonable period during which you need to rectify some errors in the application at the development company’s expense. The agreement should also specify how the web hosting or app store submissions will be managed.
Maintenance Support:
An outsourcing software development company may stop work in the middle of a project without any support contract. The maintenance assistance agreement should clearly state how long the team will support the programs they create and deliver.
Specifying support terms in the project increases the sense of ownership for developers working on building your app. They know that the wrong code means more work for them in the future.
Intellectual Property Rights:
As a customer, you have full rights to your project but make sure you get it in writing by including the intellectual property rights clause in the contract. This will save you some major headaches in the event of a rights violation. When working with your potential competitor in the future, this will prevent the outsourcing software development firm from reusing the code written for your application.
Privacy Agreement:
The Privacy Agreement is a non-disclosure clause that guarantees the confidentiality of the proprietary information we share with contractors. This ensures that app ideas cannot be copied or shared with others. The non-disclosure and privacy agreement must be signed with the outsourcing partner and the individual developers.
Compensation Clause:
Compensation clauses are legal provisions in the agreement that relate to the distribution of risk liability between you and the outsourced software development company.
It states who will bear the legal charges if any claim arises in the application development process.
Termination Clause:
It’s always a good idea to be prepared for the worst. Be sure to include a termination clause in your agreement that clearly states that action will be taken if the outsource software development company fails to complete the project as per requirements.
Jurisdiction to Solve Problem:
Outsourcing has made software development a genuinely global process. Specifying the jurisdiction in which any dispute will be settled will help understand the law under which a project is covered.
Summary
We would not say that the above-listed threats are the most common. Also, there are no rules for this – as it all depends on the project’s features. However, if you are challenged to implement your project successfully, consider what we have written here.
Considering the issues mentioned here is a perfect guide for you, which suggests what you should not do and how to deal with the threat. If you are still left with any queries regarding custom software development services, feel free to connect with us, and we’ll be happy to answer your questions.
Please send us an email at [email protected], and someone from our team will connect with you within 1-2 business days.
