When starting any online business, you inevitably face a choice. Hire an in-house development team? Or choose programming outsourcing? Like any choice in business, there are always costs—time, money, etc. The first option seems clear. However, the second option—choosing the outsourcing mode—leaves you with more choices to make and
questions needing answers.
What does outsourcing mean? Basically, when companies outsource programming, they transfer selected responsibilities to a third-party contractor. An outside company or an individual with specific programming expertise works for them.
You can outsource programming partially or completely. If you choose partial outsourcing, you assign some tasks to a subcontractor. If you opt for complete outsourcing, the selected development team takes over the entire scope of a project.
What is the starting point when you plan to outsource computer programming?
You went with option two and decided to hire an outsourcing development company.
Where should you start? How do you choose the best provider? It will take time to have your questions answered. This short scenario might help you.
First, determine 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 already proven their professionalism. With their employees’ strong engineering backgrounds, Ukrainian companies can meet different clients’ needs in programming outsourcing. This can be fresh-baked startups, established businesses, and large enterprises.
Second, after you have chosen the outsourcing destination, continue your search in several ways:
- on Google, searching for “outsource programming in Ukraine”
- in groups specialized in IT outsourcing via LinkedIn
- on Clutch.
Clutch is a rating platform listing IT companies experienced in programming outsourcing. The rating of each company is reflected on a scale from 0 to 5. The rating is based on detailed feedback from former or current customers. You can read descriptions of the 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?
Programming outsourcing’s high popularity proves it is beneficial.
Pros/ Benefits of programming outsourcing:
Software developers located outside North America and EU countries charge considerably less than their US/EU counterparts. Their qualifications tend to meet the same high standards as those of developers in the US/EU countries. Thus, programming outsourcing allows you to save money without compromising quality.
The picture below presents the hourly rates of the technical experts worldwide:
It is important to note that a low price does not mean the least-expensive option. Price is a fundamental factor in choosing a provider, but it shouldn’t be the deciding factor. When you compare risks and value of an offer built purely on the lowest price, the picture changes dramatically.
Choose programming outsourcing when you need to quickly onboard a development team, organize a project implementation process, and get your product launched on time. However, we recommend allocating time to screen potential providers. Otherwise, time saved when choosing and working with the “wrong” contractor could be time and money lost. It might turn into a disaster—both for your bank account and your reputation. 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 CEO or co-Founder wears several hats. They need to focus on strategy and marketing, while the selected outsourcing company focuses on project programming.
Cons / 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 constantly communicates with the outsourcing team. The product owner. The product owner understands the requirements and ensures the outsourcing supplier also understands. The product owner’s essential daily tasks include monitoring compliance with standards, reviewing source code, checking latest builds, examining error tracker. If the product owner is too busy, a designated project manager must be assigned.
Lack of constant management usually means the project could go 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 can of Coke in a vending machine. 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 your elevated expectations will be a disappointment for 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 clients’ expectations, outsourcing companies should always invest time in communicating with the client during the pre-sale stage. They pay special attention to the analysis of business requirements. Mutual understanding turns into fruitful cooperation.
How to establish an effective programming outsourcing workflow. Our observations:
At IT Craft, we know successful project completion 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.
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 of 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, so they can be, too, when they outsource programming to our company. This approach makes us different from our competitors and allows us to offer effective implementation paths.
Programming outsourcing is a process, not a finished product. Thus, it is difficult to almost impossible to give a straightforward answer. 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 road map 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, you should factor in additional charges for any extra changes no matter how small. Overall additional costs depend on the size and the number of changes requested.
Success story: eLaundry
eLaundry is a custom CRM solution designed to automate laundry services in an accessible manner. eLaundry helps businesses save time via online data processing, scheduling order pickup, applying costs of services, and more. Customers can estimate costs of laundry services using a pre-defined calculator. They can easily choose pick-up and delivery dates in a calendar.
Cooperation with IT Craft started from a pilot task and expanded soon. Development team helped add missing features to the project and apply complex business logic for smooth order processing.
What factors affect cost of outsourcing programming?
Apart from direct costs, project outsourcing can bear indirect or hidden costs. Costs depend not only on development team’s engineering background but also on soft skills and managerial style.
Hence, every client needs to keep in mind the following 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 same or similar working habits or attitudes. Less time is spent on project coordination and management.
Final thoughts: Why outsource projects to programming companies? How do you find the best company for yours?
Successful outsourcing strategy depends on the criteria you use to select the outsourcing programming company and how you manage the processes. You need a clear, detailed plan for managing the contract and ensuring quality control.
With proper management, outsourcing programming services are a great way to gain 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.
Do you need an estimate as soon as possible?
Contact us and get it for free!
How do businesses that tried programming outsourcing rank their experiences?
Are you curious about what other people think about using outsourcing programming services? Check out IT Craft’s customer sharing their experience. This is how programming outsourcing made their lives easier:more testimonials
What are three different types of outsourcing?
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.
Usually, onshoring is the most expensive option, offshoring the cheapest, and onshoring lies somewhere in between.
Apart from geographic distance, cultural fit is important. Cultural nearshoring can be an effective alternative.
What are the positives of outsourcing?
Advantages associated with outsourcing usually include:
- Fast access to a wide talent pool.
- Focus on a company’s core activities.
- Increased technical flexibility.
- Access to cutting-edge technologies and competencies.
What is outsourcing and how does it work?
Outsourcing means an outside party (a company or a freelancer), not affiliated with the client, takes over a certain project or its part.
This is how it works:
- A prospective client contacts a company with a request.
- The company provides the client with an estimate and a project plan.
- The parties negotiate on details. When they come to an agreement, a contract is signed.
- The contracting company delivers the project, in accordance to timeline and requirements in the contract.
- The client does acceptance testing; the project is adjusted, if needed.
- The contracting company supports the product during the post-release guarantee period.
What are the pros and cons of outsourcing?
Outsourcing makes it possible to balance costs, quality, and workload.
The main benefits of outsourcing include:
- Adding missing expertise
- Project head start
- Cost savings
- Process improvement and flexibility
The cons of software outsourcing include:
- Possible loss of control on fundamental business processes
- Shortage of internal skills
- Risks of quality degradation in the long run
- Becoming too dependent on an unstable supplier
Weigh carefully these factors to make an informed decision.