When starting any online business, you must immediately choose between in-house or a remote development team. There are costs for both in time, money, etc. The first option seems clear—time spent searching, selecting, and hiring followed by fixed costs for salaries, taxes, etc.
The second option—choosing programming outsourcing—gives you greater flexibility
with choices and more questions to answer.
What does programming outsourcing mean? Basically, when companies choose to
outsource programming, they transfer selected responsibilities to an outside
source. An outside company or an individual with specific programming expertise
provides them with outsourcing
software development services.
You choose whether you want partial or complete outsource programming. If you
choose partial outsourcing, you assign selected tasks to a subcontractor. If you
opt for complete outsourcing, the selected outsource development team takes over
the entire project scope.
How do businesses rank their programming outsourcing
experiences?
Do you want to know what people thought after they used outsourcing programming
services? Check out IT Craft’s customers sharing their experiences—how
programming outsourcing made their lives easier:
eLaundry is a custom CRM solution designed to automate laundry
services easily.
eLaundry helps businesses save time via online data processing,
scheduling order pickup, applying costs of services, and more.
Customers can easily estimate costs of laundry services using a
pre-programmed calculator. They can choose pick-up and delivery
dates in a calendar with no hassle.
You decided to hire an outsourcing development company.
Where should you begin? How do you choose the best provider?
It takes time. This might help.
First, determine in which region your future offshore partner works. North
America, Latin America, EU, Eastern Europe, and Asia—all these regions offer a
range of outsourcing software development companies.
For example, IT Craft’s development center is in Ukraine. Why? Because Ukrainian
providers have continually proven their professionalism over many years. With
their employees’ strong engineering backgrounds, Ukrainian companies can meet
different clients’ needs in programming outsourcing. All business types and
size: fresh-baked startups, established businesses, and large enterprises.
After you have chosen the outsourcing destination, you must then search for a
provider:
Google, searching for “outsource programming in
Ukraine”
Clutch is a rating platform listing IT companies experienced in programming
outsourcing. Each company is ranked on a scale from 0 to 5. The rating is
based
on detailed feedback from former or current customers. You can read
descriptions
of projects and scope of work a contractor worked on. You can also find a
lot of
insights on programming outsourcing. Use these to determine strengths and
weaknesses of selected outsourcing development companies.
What are pros and cons of outsourcing programming?
The great popularity of programming outsourcing is a sure sign it is beneficial
to businesses.
Benefits of programming outsourcing
Price
Software developers located outside North America and EU countries charge
considerably less than their NA/EU counterparts. Their qualifications tend to
meet the same high standards as those of developers in the NA/EU countries.
Thus, programming outsourcing saves you money without compromising quality.
The image below presents hourly rates of the technical experts worldwide
It is important to note that a low hourly price does not mean the least-expensive
option. In choosing a provider, price is a fundamental but not the deciding
factor. When you compare risks and value of an offer built solely on the lowest
price, the picture changes drastically.
Time
Choose programming outsourcing when you must quickly onboard a development team,
organize a project implementation process, and get your product launched within
a specified time. Taking sufficient time at the beginning to carefully screen
potential providers means saving time in the long run. If, in haste, you choose
the “wrong” contractor, your chances of losing both time and money are great.
Check out our detailed guide on how to choose a provider:
How to
Find
Programmers for Your Start-Up in 2021
Freeing up company resources
According to our observations, freeing up company resources is especially
relevant for start-up companies. For example, the CEOs or co-founders wear
several hats. They need to focus on strategy and marketing, while their chosen
outsourcing company focuses on project programming.
Risks of outsourcing
Lack of established communication and management
Without a good manager, a project could go out of control. You need a leader who
communicates clearly and often with the outsourcing team. A leader who
understands the requirements for a successful launch and ensures the outsourcing
company also understands. The product owner’s essential daily tasks include
monitoring compliance with standards, reviewing source code, checking latest
builds, examining the error tracker. If the product owner is too busy for this
important role, a designated project manager must be assigned.
Lack of constant
management usually means the project could slip out of control. Every
outsourcing development company has horror stories about that. Customers hand
off their list of requirements to assess and think their job is done—all they
need to do is pay and the outsourcing company will do the rest. Development is
not a vending machine spitting out a can a Coke with input of money. Outsourcing
programming is a process during which both the product owner and project manager
at the outsourcing company must be actively involved.
Expected quality level
Anything less than whatever elevated expectations you might hold will be a
disappointment to you. Of course, you can successfully outsource coding and
finish different tasks with the help of an outsourcing company. But you need to
clearly state the expected quality in advance. To understand the level of their
clients’ expectations, outsourcing companies should always invest time in
communicating with the client during the pre-sale stage. They must pay special
attention to the analysis of business requirements. Mutual understanding turns
into fruitful cooperation.
What is crucial for effective programming outsourcing?
At IT Craft, we know successful IT
outsourcing is not simply doing coding.
Well-thought-out company processes mean assigning the right people with the
right skills to the right projects at the right time.
People first
Programmers develop software for people. Clear communication
between
designers, engineers, stakeholders, business, and product owners
is
crucial for success.
People who develop, maintain, and update a system need to
understand
how everything works. If this is server-side code of a complex
system, other developers will read this code.
Source code must be well documented. Business analysts prepare
documentation because it is important for other team members.
Give them what they need.
Learning is the key
The most talented technicians always thirst for knowledge. Even
during breaks, they enthusiastically discuss new trends and
technologies. They read a lot—online and offline. They often try
something new and learn from their experience.
IT Craft offers a specific set of services to our potential
clients
as part of our outsourcing software
development services. However,
most of our experts are not afraid or trying new coding
languages or
new platforms. For this reason, IT Craft opened an IT Research
and
Development Laboratory, a place where anybody interested can
realize
their idea at the company’s expense.
Practicing opportunities help our specialists keep their skills
sharp. Our clients are happy we are at the top of our game. Why?
Because they are also winning when they outsource programming to
our company. This approach makes us different from our
competitors and allows us to offer effective implementation
paths.
How much does programming outsourcing cost?
Programming outsourcing is a process, not a finished product. Cost depends on
many factors. Programming outsourcing can cost $200 for a hot fix made by a
freelancer. Or it can cost a company $100,000+ a month to hire a large
development team for updates and expansion of an ecommerce platform. Still, this
saves seven-digit sums the company would have spent otherwise on IT services.
The costs of IT Craft’s services depend on the cooperation model selected:
Time and materials
The client pays for the time team members spend doing certain tasks. This
option
works very well if the project requires fast development and every
single
requirement is not defined in full detail. Instead, a high-level roadmap is available.
Price per unit
The service provider specifies the cost of the service and the customer
pays to
use it. For example, if you require support and maintenance for a
web-based or
mobile application, code review or server management, you either pay for
a fixed
number of hours on demand or a set sum each month.
Fixed cost
In this case, the cost of services is determined at the beginning of the
collaboration. This payment model fits well only if the client has clear
and
final system requirements. On one hand, this model can be considered
beneficial
for the business, since it allows calculating the costs involved in
advance when
they outsource coding. On the other, the client should factor in
additional
charges for any extra changes no matter how small. Overall additional
costs
depend on size and number of changes requested.
Do you want to know what cooperation model is the best for your project?
What factors affect outsourcing programming costs?
Apart from direct costs, project outsourcing can bear indirect or hidden costs.
Costs depend not only on the development team’s engineering background but also
on soft skills and managerial style.
Hence, every client needs to keep in mind these factors when forecasting future
costs of programming outsourcing:
Cheapest hourly rates do not guarantee lowest costs –
experienced engineers have
greater productivity. They complete the same scope in less time and with
higher
quality. The total cost of project development and maintenance is lower.
High-level requirements need flexible pricing – scope of
work might vary when
requirements are vague and/or change. Software developers might need
additional time
to complete functionality.
Cultural fit is important – when the team shares similar
values with its
clients, it is likely to have the same or similar working habits or
attitudes.
Less time is spent on project coordination and management.
How to outsource programming to IT Craft?
In order to best serve our clients, IT Craft uses a three-step path for
programming outsourcing:
Discover and discuss
Develop and launch
Support and maintain
This path ensures sustainable project workflow needed to meet clients’
expectations from software development. What and when expected. Quality source
code ensured.
Here are more details:
Discover and discuss
This step starts when a prospect client sends a request. Based on the
level of detail of requirements, the team either prepares a project
estimate or an initial call is scheduled to clarify requirements and
then provides an initial estimate.
When the initial estimate is ready, the parties discuss it. An assigned
development team focuses on project discovery to prepare a detailed
plan.
For some projects (e.g., porting an old system onto modern
technologies), an estimate is not possible. In this case, the team
completes a small test task up to 40 working hours to evaluate project
challenges and team’s pace.
If the client already has source code, the team does code inspection to
ensure it’s possible to fulfill requirements.
After the team prepares a detailed plan and the parties agree on
cooperation terms (best means of communication, cooperation mode,
payments), they sign a contract and an NDA, if required.
Develop and launch
The team divides the entire development process into Sprints. Each Sprint
lasts 2 weeks on average. Each Sprint starts with planning. The team
decides on Sprint priorities and estimates the tasks. The aim of each
Sprint is a piece of working source code.
The client-side product owner takes an active part in the project
ensuring key decisions are made on time, and any problems that might
arise on the project solved as soon as possible.
The development team works on:
analysis of requirements and project documentation
UI/UX design based on requirements
Source code development (front-end, back-end, mobile app
development)
QA and testing
DevOps
At the end of each Sprint, the team either releases a piece of working
functionality of the future solution on the internal live server or
integrates it to the existing system. The client can test it and make
sure it corresponds with the Sprint plan. The client also receives a
detailed report.
Support and maintain
When the project is complete and the client has accepted it, part of the
team stays with the client during the guarantee period. We know that
some flaws might become visible after real users start using the system.
The guarantee period lasts 1 – 3 months, depending on complexity of the
delivered system and amount of source code. During this time, the
development team reacts quickly to client requests and improves any
flaws in the produced source code at no cost to the client.
If the client has no in-house team, app maintenance is also possible.
The scope of work decreases dramatically after project launch. Still, IT
Craft strives to dedicate developer(s) who already know the system to
save on the client’s budget on software support.
Do you need to save this information for the future?
Use the button to download a short chat on how IT Craft development
team’s work. This will help you keep in mind the bigger picture.
Why choosing one of the best programming companies is a win
for you?
Successful outsourcing strategy depends on the criteria you use to select an
outsourcing programming company and how you manage the processes. You need a
clear, detailed plan for managing the contract and ensuring quality control.
With a proper approach to software development for startups, outsourcing programming services gives you a competitive advantage by adding missing skills and experience.
Choosing an outsourcing programming company is a business decision that requires
a detailed assessment and careful planning before making the leap.
Here is a short checklist to help you design your best scenario on programming
outsourcing:
Is there a clear, final list of requirements? Will it
change?
What is project’s top priority: quality? costs? timeline?
Is time difference between you and an outsourcing team important to
you?
Is there any source code available? Do you want to enrich it with
new features?
How many users are there? Do you plan to grow?
Do you want software maintenance, too?
Write down your answers. Use them to refine your search criteria.
The three main types of outsourcing are based on geographic
proximity.
They include:
onshoring – client and contractor reside in the
same country
nearshoring – contractor is located in a
neighboring country
offshoring– contractor has its office in a
distant location
Generally, if you live in North America, EU, or Australia, onshoring
is the most expensive option, offshoring the cheapest, and
nearshoring
lies somewhere in between.
Apart from geographic distance, cultural fit is important. Cultural
nearshoring can be an effective alternative.
Outsourcing means an outside party (a company or a freelancer), not
affiliated with the client, takes over a part or all of a certain
project.
This is how it works:
A prospective client contacts a company with a request,
including
requirements.
The company provides the client with an estimate and a project
plan
based on information and requirements sent.
The parties negotiate on details, come to an agreement, sign a
contract.
The contracting company delivers the project, in accordance with
timeline and requirements in the contract.
The client does acceptance testing. The product is adjusted, if
needed.
The contracting company supports the product during post-release
guarantee period.
Hi, thanks for the post. I think this is a problem for many non-tech companies. They do not have enough workload or budget for an in-house team.
When a company wants to hire local engineers, it faces competition for IT specialists. Top talents work for startups or tech giants like Google or Amazon. Moreover, it costs much to retain expensive developers. What if there is not much work for everyone? The entire IT department is unlikely to pay off.
However, here is another pitfall, now with outsourcing. If a company’s management does not possess software development expertise, it will have no clue how to outsource programming to another company.
Adrien, indeed. Thanks for your commentary. However, this is not impossible too. In our practice, we work successfully with managers who do not have engineering background. It all depends on a person’s commitment and result orientation.
Of course, it is easier for an engineer to be aware of what is happening on the project. But if a manager is not sure about the numbers he or she gets in reports, he or she can initiate an independent code inspection and project audit.
The only advice for non-engineers: find a reliable partner who you can trust.
Hi Emil. Thanks for asking. Here is the answer:
Direct costs are 2 – 3 lower when you outsource programming to Ukraine.
There are also many indirect benefits. You work with a team. You do not have to look for a specialist each time you need e.g., design for an icon or API maintenance. You do not look for hiring new specialists when the workload increases or cut off team members when it decreases. You benefit from an established workflow and team’s previous experience of launching startup projects. The team can advise you on how to implement functionality faster and for less.
All in all, you launch faster, for less, and with lower risks.
Antonina, what a great post! Thanks for sharing. I would argue that the following cannot be stressed enough: fast access to IT competences is crucial for businesses of all sizes. Outsourcing makes this possible. An expert-level development team saves company’s resources substantially. It can:
– start a project straight away,
– has experience of previous projects knowing how to implement features,
– has an established workflow and use best practices on project management.
Yes, this is true. When a company hires an outsourcing software development team, it can manage resources more flexibly. It is often possible that the workload is big but it decreases rapidly when the team launches a project and starts its maintenance. In case if there is a large in-house team, the company must find another project rapidly. In case of project outsourcing, this is an outsourcing company’s burden.
Hence, it makes sense for companies that do not focus on digital solutions as their primary business to consider programming outsourcing. They can keep a little in-house team that possesses critical knowledge. This team is expanded with an outsourcing development team when needed. In my opinion, this is a ‘win-win’ strategy.
Hi, thanks for the post. I think this is a problem for many non-tech companies. They do not have enough workload or budget for an in-house team.
When a company wants to hire local engineers, it faces competition for IT specialists. Top talents work for startups or tech giants like Google or Amazon. Moreover, it costs much to retain expensive developers. What if there is not much work for everyone? The entire IT department is unlikely to pay off.
However, here is another pitfall, now with outsourcing. If a company’s management does not possess software development expertise, it will have no clue how to outsource programming to another company.
Adrien, indeed. Thanks for your commentary. However, this is not impossible too. In our practice, we work successfully with managers who do not have engineering background. It all depends on a person’s commitment and result orientation.
Of course, it is easier for an engineer to be aware of what is happening on the project. But if a manager is not sure about the numbers he or she gets in reports, he or she can initiate an independent code inspection and project audit.
The only advice for non-engineers: find a reliable partner who you can trust.
Hi, how does outsourcing programming help a startup project?
Hi Emil. Thanks for asking. Here is the answer:
Direct costs are 2 – 3 lower when you outsource programming to Ukraine.
There are also many indirect benefits. You work with a team. You do not have to look for a specialist each time you need e.g., design for an icon or API maintenance. You do not look for hiring new specialists when the workload increases or cut off team members when it decreases. You benefit from an established workflow and team’s previous experience of launching startup projects. The team can advise you on how to implement functionality faster and for less.
All in all, you launch faster, for less, and with lower risks.
Antonina, what a great post! Thanks for sharing. I would argue that the following cannot be stressed enough: fast access to IT competences is crucial for businesses of all sizes.
Outsourcing makes this possible. An expert-level development team saves company’s resources substantially. It can:
– start a project straight away,
– has experience of previous projects knowing how to implement features,
– has an established workflow and use best practices on project management.
Yes, this is true. When a company hires an outsourcing software development team, it can manage resources more flexibly. It is often possible that the workload is big but it decreases rapidly when the team launches a project and starts its maintenance. In case if there is a large in-house team, the company must find another project rapidly. In case of project outsourcing, this is an outsourcing company’s burden.
Hence, it makes sense for companies that do not focus on digital solutions as their primary business to consider programming outsourcing. They can keep a little in-house team that possesses critical knowledge. This team is expanded with an outsourcing development team when needed. In my opinion, this is a ‘win-win’ strategy.