How to Outsource Software Development | 5 Proven Steps

Today, in the realm of tech, software development is one among the leading outsourced services as it requires constant experience and expertise on the latest tech advancements and developments. Navigating the software development outsourcing process might seem very overwhelming. Even if most businesses deal with satisfactory outsourcing, there is no such guarantee that you will, too!

If you have a ground-breaking software product idea and decided to do software outsourcing to bring it to life, kick off your dream project following the right stages. Instead of walking in blind, you must have a clear idea of the processes of software outsourcing. Otherwise, a software outsourcing catastrophe can lead to severe loss.

What does software outsourcing mean?

Outsourcing software development refers to relying on any third-party vendor for IT needs. It is currently known as one of the popular business strategic approaches that let businesses hand over their software development process to another third-party partner. The process involves developing custom solutions or projects. It is becoming a new norm in the tech industry. Cost, flexibility, speed to market, access to tools and processes are some of the objectives that turn software outsourcing a profitable choice.

According to a report by Statista, the IT outsourcing market is expected to witness impressive growth worldwide, and the compound annual growth rate (CAGR) is projected to grow by 8.28% from 2025 to 2029.

Most-follow five stages of the software outsourcing process

The following process will assist you towards success in software development outsourcing.

1. Setting goals is the very first step

Defining the goals and requirements is the foundation. Without this, any project can lack direction, leading to delays, budget overruns, negative outcomes and whatnot! When serving the goals, make sure both the internal and outsourced vendors are involved.

Clearly outline the problem you want your custom software to solve as well as the opportunity you want to leverage. For example, when discussing with the third-party vendor, say that “We need a mobile app for Android only where users can book tickets and receive reminders” instead of saying, “We need a mobile ticketing app.”

Also, creating a detailed project scope is a must to describe what the software should do. Add both functional and non-functional requirements. Establishing realistic timelines and budget constraints is another thing to consider. What you can do is break the project into phases to track the progress and identify the budget range.

Ask yourself this question:

• What is the primary purpose of this software?
• What are the short-term and long-term objectives?
• Who are your target audiences?
• What are the must-have features and functionalities of your software?
• How will you measure the success of your project?

2. Choose the right outsourcing partner

You have to do proper research to shortlist potential vendors. To get reliable help, you can reach out to your professional network for recommendations. You have to do proper research to shortlist potential vendors. To get reliable help, you can reach out to your professional network for recommendations. The best way is to review the vendor’s websites for their services, technology stack, and client testimonials.

Check whether the vendor has experience in your industry by looking for projects similar in complexity and scope to yours. Communicate with the vendor to find out whether the vendor has experience with the specific tools, frameworks or programming language that your project requires.

You can look for certificates to validate the vendor’s credentials and make sure you are partnering with a credible company. Evaluate their years of experience in this field and their team’s expertise. If possible, you can request a small test to gauge their capabilities.

Consider the following question:

• What is their expertise?
• Do they have experience with similar projects in your industry?
• Can they provide testimonials, case studies, or references to their previous work?
• What is their pricing model? Does it align with your budget and project needs?

3. Stay focused on key components during the development phase

The development phase is the heart of the software outsourcing process. It is where your vision takes shape. This stage involves coding, designing, refining and more. The process begins with preparation that lays the foundation for a smooth development journey. When the groundwork is set, release planning takes centre stage and involves designing wireframes or mock-ups.

This will work as a visual roadmap. Later, the designing phase focuses on crafting the user interface and user experience. Overall, the development occurs in a short cycle that lasts for around one or two weeks while focusing on building and delivering a specific set of features.

4. Establish clear communication

Transparent communication is critical for the success of an outsourced software development project. Set a clear protocol in order to ensure the alignment between your team and the vendor. Set the expectations, roles, responsibilities, workflows and all. You must clearly communicate expectations for quality, response times and adherence to timelines in order to avoid all sorts of misunderstandings.

Using the right tool can also boost your collaboration and project visibility. If you want to maintain frequent communication, set up regular meetings to discuss progress, challenges and next steps. This is a must-do, especially if you are working with remote or international teams.

If you are trying to provide clarity, break the project into milestones. When you create a structured and transparent working environment, this will decrease misunderstanding, foster collaboration, and ensure the timely delivery of a high-quality product.

5. Monitor progress and evaluate outcomes

It is very common for challenges such as delays or misunderstandings to arise. So, it is better to be prepared to address them properly. Create a culture of transparency and set clear expectations for testing protocols. Try to catch bugs and issues early by testing the software. Also, end users can be used to gather feedback to make sure the product meets user needs and expectations. You can use several tools to streamline repetitive tasks and improve accuracy.

Measure key performances against predefined goals. Don’t forget to discuss post-launch support in case of bug fixing, updates and feature enhancements. Ensure comprehensive documentation of the software. And for further scalability, make sure the software architecture is designed to support growth.

Here are some questions to consider:

• Are the predefined goals and deliverables being met on schedule?
• What metrics or KPIs are being used to track the project’s progress?
• Is there any issue or challenge slowing down the development process?
• Has thorough testing and validation been conducted for each and every phase?

Final words

The harsh truth about outsourcing software development is that some projects might not succeed, may be due to a weak outsourcing process or for choosing a not-so-experienced partner or due to less communication. And the right way to avoid such issues is to plan everything in detail and take the right steps.