Today, with such rapid changes in technology, business seems to move more smoothly than ever. This can create strong competition among businesses.
- How to deliver products to the customer in the fastest and most economical way?
- How to make successful business and stay at the top of the competitive environment?
- How to start any business relating to or requiring software?
- How to deal with the shortage of software developers in the IT industry?
- How to developing a software project within budget, yet, bring more profit?
The answer for these tough questions is ‘software outsourcing services’.
Table of Content
What is software outsourcing service?
Software outsourcing services can be a developer, a team from an outsource development company that are experts in the software development field. By hiring or choosing to outsource software development, the company can get not only the amazing results but also release the burden of money, time, and many other things which the in-house team can’t offer.
In short way, IT outsourcing services mean using the skills and expertise of a third party to handle complex tasks relating to software development, whereby the client can achieve the best outcomes for the business.
Types of outsourcing services.
There are many types of outsourcing services. In this very limited article, the three main types of software outsourcing will be discussed below:
This means that business owners will hire a third party in a neighboring country. For example, the business located in China and forms a partnership with a software outsourcing company in Vietnam. In this case, Vietnam will be a nearshoring software outsourcing to China.
This means hiring a third party company within the country. For instance, the business is in the United States and hires a software outsourcing company locally. Hence, the United States will be an onshoring software outsourcing destination to the US companies.
This means that business owners will hire a software development outsourcing company from another country. For example, the company in the US collaborates with or hires a software outsourcing company from another country such as China, India, or Vietnam. Hence, China, India, or Vietnam will be offshore software development destinations for the US company.
We have discussed the types of outsourcing services based on location or distance. Now we will look at the outsourcing models which will identify the different ways to utilize this type of service based on the relationship between the clients and the software outsourcing provider. Of the many types of models involved in the software project, there are three primary models.
Staff Augmentation Model
The staff augmentation model is when the client will hire temporary software developers by contracting with the software outsourcing provider instead of hiring a permanent developer; in order to fill the gap within the in-house team, especially skill sets, and thus accomplish the software project.
By contracting the software outsourcing provider, the IT outsourcing company will provide the client with elite developers with skill sets, specific to the needs of their client. They will work along with the client for the best quality outcome. In this case, the clients are still in control of the project from start to finish and have right to take care of distributing tasks and responsibilities, even providing a workplace for the developers. The software developers may wish to choose whether they work-at the client's office or their office.
However, once the contract was signed, the software developers are part of the client’s human resource. And the software developers have the responsibility to ensure the tasks are completed and reported to the team on time. With this model, the clients need to choose talented and skillful developers that fit the needs/goals of the project.
Dedicated Development Team Model
The Dedicated Development Team Model is a model where the client will entrust the software project to a software outsourcing partner who will, in return, provide a high quality and professional team to take care of it from start to finish. The professional team might include every single role that a software project needs for bringing the project to fruition. Such as software developers, project managers, business analysts, quality assurance, etc.
Providing a professional team here also means that they will take care of matters relating to recruitment, IT infrastructure, vacation, team-building, sick-leave, administration, etc. In turn, the clients will discuss with the software outsourcing provider the team size, skill sets, time for launching, adding some more requirements, and their involvement in the process.
Once this model is applied, the dedicated team belongs to the clients. They have the right to be directly involved in project management if they want.
They can trust the project manager from the outsourcing provider who will help them stay up-to-date with tasks and how the project is progressing. The development team is in their hands. Hence, they are in control and can make any changes.
The Dedicated Development Team Model would be a choice for a company to purchase the best business outcomes. However, this should only be invested in if it is a long-term, dynamic, and complex project.
In the Project-based Model (another name is software outsourcing model or outsourced development team model), business owners will hire an outsourcing software development company, and allow the end-to-end development team to take full responsibility following the client’s requirements and expectations. This means that the client will be hands-off all things relating to the project and focus more on core business or business strategy.
This model gives the outsourced team flexibility in the whole process from beginning to end. For example, defining and taking care of the process, providing a skillful team to manage it, applying the most suitable technology, etc. What is expected to see in this model is the result rather than the process.
Why IT outsourcing services?
Software outsourcing would be a good strategy to start during this challenging time. Some reasons for that are cost-savings, time-saving, the cutting edge of technology, etc. This service will help the business stand out from the market, increase productivity, and boost business outcomes. Below here are the top 8 reasons or 8 benefits of outsourcing which can provide a clear vision of why outsourcing services would be a good choice.
When to outsource?
The answer may be simply depending on business needs. However, eight reasons below will help the company know whether they need software outsourcing services or not.
How to choose the reliable software outsourcing company for a business?
There are hundreds and thousands of IT outsourcing companies around the world. How to choose among these companies is always a tough question. A business owner/entrepreneur can’t just simply say ‘I like this one’-even they have the right to do that. Picking up randomly is easy but to ensure that the IT outsourcing company can bring the best quality products or the best business outcomes is another story.
How do you outsource effectively? Where to find a software development company? What do companies outsource? Here are a few steps to choose the right software outsourcing services company.
Firstly, define goal/goals clearly.
This is a significant step because you can’t go anywhere if you don’t know where you are going. Before reaching out to the software development company, business owners should define the goal/goals that they want to achieve in business terms.
For example, building a good management system for the enterprise, new ideas that want be added in the software product to boost business profit, some business problems that need software to be solved, the business needs software integrated to improve services quality or the business processes that need to be optimized. The assessment will help business owners to decide to outsource software development or not. Beyond, this can help them know what exactly they want to outsource. Remember that a clear vision can give you a clear direction.
Then, spending time with the business team or whoever might be involved with the next project to evaluate internal resources. Some aspects need to look at such as budget, business field, skills, or new technology in the IT project, even competitors. This will narrow down the number of potential software outsourcing partners and helps choose the right company.
Besides that, the experiences, competencies, and technical skills from the in-house developers also have to be examined. This evaluation will provide some ideas such as what technical skills are needed; whether the in-house team can handle the project or not; and how many software developers might get involved/added to the project.
By doing so, this review will be a good source to decide software outsourcing models for the project- whether it is staff augmentation, dedicated team, or project-based development. It also will help the IT outsourcing provider not only bring the best software solutions with effective cost but also provide skillful developers and suitable team size that meet the business needs and business goals. Remember the clearer the information and requirements provided, the better the software company can estimate.
Even though this is a vital step and influence in the whole project, it should not be too rigid. Once the contract with the software outsourcing company was signed, business owners are stepping into the ‘win-win’ relationship. As good software outsourcing partners and with experience in multiple projects, they have built a strong foundation in the business view.
Hence, they can discuss and develop the business goals in ways that bring most business profits such as giving IT-consulting, proposing to improve the requirement features, recommending the development team size, or the latest/suitable technology for the software product.
Secondly, decide the type of outsourcing services.
Whether choosing onshore outsourcing, nearshore outsourcing, or offshore outsourcing, each of those will have advantages and disadvantages. The decision has to be based on the internal resources and the careful consideration of other factors. Such as the different time zones, the pay rate per hour for each developer, the communication skills, the size of the project, the time in need for the project (long-term or short-term), and so on.
Thirdly, make a list of potential software outsourcing company.
After deciding on the outsourcing models and type of outsourcing services, now is the time to look for potential outsourcing partners. Shortlist at least 5 to 7 potential software development company. There are multi-ways to do this. For example,
Use Google Search/Bing/Yahoo, etc… Use some keywords to look for information such as “Offshore Solutions Provider”, “Vietnam Offshore Solutions Provider”, “top software outsourcing companies” if Vietnam is the choice. Or simply type any other keywords- programming language, CMS, etc…The search engines will provide a few ideas for choosing the right IT outsourcing company. However, the decision should not rely only on this result. Doing some further researches would be a good idea.
Ask referrals or recommendations from friends or partners if they have already used software outsourcing services. This is a secure channel because friends/relatives/partners already have experience working with those software development companies. Thus, they will know which one is best, and how expert, professional, and experiential these companies are.
Check social media tools, especially LinkedIn and Twitter. From these social media channels, it will show who they are, the culture, etc… Of course, these channels can’t give 100% right about what businesses want. However, this will at least give some ideas and options to choose.
Approaching B2B companies might be another choice. Some companies listed the best outsourcing development companies such as Clutch, Upwork, Goodfirms can be a place to look for. The shortlist can be based on the category such as software development services, custom software development, BPO outsourcing, software outsourcing services. Even though this is a good source to find out, business owners should choose in a careful way.
Fourthly, do thorough research on their background.
The next step when having a list of outsourcing companies is to check software company background. The following questions will suggest some key points for the company to research.
How professional they are?
What are their skills and domain knowledge? This is an essential question because it will filter suitable companies for the project. If the company has no online profile but it was mentioned that it has a good reputation on the particular skills/knowledge, then the business should contact them personally.
Check the case study. A case study will project how the company solves the problems and whether they’re similar to client's project or not.
The length have they been serving in the market?
How large the company is?
What is the feedback from their clients?
What types of development methodologies are they using? Scrum, Agile or Waterfall?
Normally, after having a list of IT outsourcing companies-of course with careful research or with the information from trustworthy sources, business owners can go forward to contact the software company. However, this step is not redundant. This will reassure the company and help to know who is handling the project.
Contacting potential software outsourcing partner.
After completing the research and there is no doubt about the results, the clients can proceed to contact potential outsourcing partners and arrange a meeting to discuss further the project.
Explaining the problems/expectations of the project would be helpful. If possible, business owners can require the solutions or ask for technology consulting. Or asking for the CV of developers to certify that the business gets the best talented and skillful one. References from previous projects and clients can be a trust-worthy source at this critical moment.
Finally, if that company fits the expectations and requirements, the business owners are on the right track. And if everything is going well, let’s wait for the results and see how quickly the business grows.
Bonus Tips to avoid the pitfalls during the software development process
To ensure that the high-quality software project, here are some tips for successful software outsourcing services
Looking for value beyond cost-savings
Cost-savings is the fundamental reasons for a business to turn into software outsourcing services. However, cost-savings does not equal cheap and it should not be the only reason to outsource.
Many businesses accept the cheapest price from software outsourcing vendors without hesitating. Yet, it is a big mistake and could destroy the whole process of carefully looking for outsourcing vendors. Beyond, business owners are putting their software product into a quality risk.
What other factors that the company should pay attention to? It could be the experience and competencies of the software developers, portfolios, work quality, and the ability to communicate well in English besides technical skills. These will help clients define approximately the rate that they might have to spend.
The great benefits of software outsourcing services is that it allows the clients to access the talented pool of software developers who have strong experience and skills in the software development industry all around the world. Good software outsourcing companies will provide a skillful and experience one to ensure that the high-quality software services and the more value to the project.
On the contrary, by outsourcing to the cheapest one, inexperienced developers might be provided and it will affect the quality of software product in some way. Hence, before accepting the cheapest one from outsourcing vendors, the employer should deliberately considers other factors.
Communication will define the success or failure of the IT project. If a company is hiring onshoring software outsourcing services, communication might not be a big deal. Because both are speaking the native language.
However, for the nearshore and especially offshore outsourcing services, English is the second language. This can be very challenging for the client or their in-house team and extension development team to understand each other.
Hence, to ensure the software project is going well and bring the most value to business, checking and verifying the English-speaking ability of the software development team is necessary. Conducting the interview, having a look at CV of developers would be the option to filter out the skillful one.
Establishing the communication channel and scheduling regular meetings with the team is another way to keep software project going on the on-pace. Many communication tools could be used during the development process such as Skype, Zoom, Slack, Jira. Setting up the daily, weekly, and even monthly meetings can assure that the client and the outsourced team are always on the same ground. Beyond that, if there are any changes or any vital information that need to inform, they still can follow-up.
Regular communication should happen during the entire development process from the beginning to the end. This will ensure a good outsourcing relationship and both-business owners and outsourcing partners- are on the right track.
“Where to find the top software development company?”
The answer that readily comes to mind is India and China. These two countries are well-known and are leaders in the software development outsourcing field. However, this article will introduce another option for software outsourcing destination. That is Vietnam.
Recently, Vietnam has been becoming a rising star among Asian countries and becoming the top leading country in technology in general and in software outsourcing services in particular.
There are many reasons which can affirm that Vietnam will be a top destination and the right choice to invest in software outsourcing services. According to AT Kearney in their 2019 edition of the Global Services Location Index (GSLI-this index edition means to identify locations that can best provide information technology (IT), business process outsourcing (BPO), Vietnam has been moving up one position compared with 2017 edition-from sixth to the fifth position.
This shows that Vietnam is day by day becoming a great offshore outsourcing destination for technology investment. In other words, Vietnam is becoming the tech hub among the Asian countries.
Besides that, cost-effective is also a great advantage when investing in Vietnam. Compared with India and China, outsource software development to Vietnam can save 50% cost-operations. And compared to the US, this can save 90% in costs, according to CIO Magazine.
The quality of the developers is also increasing in skills and knowledge. A large number of universities and training centers have opened and invested in information technology courses and courses relating to the IT field. According to Hackerrank, Ho Chi Minh City University of Science of Vietnam stays in the top three universities that have the best coders in the world.
Those above and a significant number of other reasons can assure that Vietnam will be an excellent choice for software outsourcing services.
This article is presented to give general information relating to software outsourcing services. The guidelines above for choosing a software outsourcing partner will help business owners/entreprenuers to find the best software outsourcing company that fits the requirements and expectations.
- If you are considering to build up your project and want to seek a leading offshore software development company that can help you grow your business and stand out on the market, don’t hesitate to contact us
About S3Corp - A leading software development outsourcing company in Vietnam
Founding 2007, S3Corp. is a leading software development outsourcing services based in Ho Chi Minh, Vietnam. S3Corp. has a proven track record in an ever-challenging and competitive market. Employing a scalable pool of talent with strong experience in the software outsourcing industry along with the application of proven processes and standards, we offer our customers extensive software services.
Our services range from full software development, new feature development, application development, existing feature enhancement, automation test tool development, testing and maintenance support services, and more.
S3Corp. is very pleased to serve more than 25 countries around the world, especially in North America (US, Canada), APAC (Australia, Japan, Singapore, Malaysia, Hong Kong, Korean, etc…)
"Growing Together" is the foundation of our company, where we work with our employees, customers, and partners to create an outstanding collaboration. We have built a strong foundation of experts to enable our company and stakeholders to pursue our goals and prosper in a competitive market.
With the development of the domestic market and the great challenges from the global market, S3Corp. believes that with the efforts of the board of managers and our members, S3Corp. will certainly take advantage of the golden opportunities in the future.
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