What is IT Consulting: Business Digital Transformation

Did you know that software application development is one of the most commonly outsourced IT functions? Its popularity is due to the fact that it’s faster and more cost-effective than in-house development. It eliminates the need for you to find and rent office space, source and hire the correct skills, and lay out CAPEX expenditure on development equipment and infrastructure. Engaging an outsourcing development company might sound like the obvious choice. But it’s important to do your homework before rushing in. Choosing the right outsourcing development company is vital to ensuring you fully capitalize on all these potential benefits. But how do you find the best outsourcing partner? Where do you start and what skills and capabilities should you be looking for?Selecting the right partner requires thoughtful consideration of several factors.Before we share ideas and best practices on selecting a development company that will add value to your operations, let’s start with the basics.

What is Outsourcing Development?

Outsourcing development involves an organization appointing a third party to handle its software development projects.This could include developing custom software that the company uses in-house or creating commercial software that they sell to their customers.

Types of Outsourcing

There are three types of outsourcing development companies: onshore, offshore, and nearshore.Let’s take a look at each of these in more detail:


Onshore outsourcing is when your service provider or providers are located in the same country as you. The advantage of adopting this model is that you have easy access to individuals working in your own time zone. The downside is that this option can be more expensive than choosing to hire local resources.


Offshore outsourcing is when a company hires a service provider located in a completely different part of the world. For example, if your organization is based in the US, it would mean outsourcing software development activities to a vendor in countries such as India, China, or Europe. While the cost of these engagements is generally lower, a difference in time zones can hamper effective communication.


Nearshore outsourcing involves hiring developers located in close proximity to your home country. The advantages of nearshore outsourcing are that time zones will rarely be a problem, and the services your outsourcing development company offers may still be available at an attractive price point.

What Does an Outsourcing Development Company Do?

Outsourcing development companies take care of specific, or all parts of the software development activities required by non-technical businesses and software companies themselves. The most common tasks handed over to an outsourcing development company include quality assurance, testing, and project management.

Why You Should Hire an Outsourcing Development Company

Outsourcing software development companies can certainly save you money, but there are other compelling reasons to consider.Because you are only asking an outsourcing development company to perform specific tasks, the time and effort involved in onboarding them are minimal. Development companies will provide a fresh eye to help you solve old problems. They typically have a wealth of expertise under their belts across a range of clients in different industries.A good outsourcing software development company can bring the benefit of this expertise to bear on your own organization. By hiring an expert to look after software development tasks, you are free to focus on other strategic endeavors.Other benefits include:

Access to deep knowledge and experience

Outsourcing development companies can help you plug internal capability gaps. In addition, you get immediate access to a team that can handle the full spectrum of your software development needs. This allows you to move ahead with creating a minimum viable product (MVP) to validate your ideas swiftly.

Access to superior tech talent worldwide

Outsourcing development companies are available in countries across the globe. Your own geographic boundaries do not limit you, so you can cherry-pick the best developers to meet your specific project requirements.

Optimal balance of skills and rates

Engaging software development outsourcing companies allows you to strike a balance between the provider’s development skills and expertise and their rates. For example, if you opt to outsource to a good development firm in Eastern Europe, you’ll enjoy high-quality, professional service at a far lower cost than you would pay if you hired a local firm.

No need for micromanagement

Outsourcing development companies typically handle all project management tasks associated with the outsourced work. This includes a dedicated project manager who acts as your single point of contact.

Easy scalability

It’s normal for the scope of a project to increase or shrink during its lifetime. Should this happen, it’s usually easy to scale the outsourcing development company’s team up or down to accommodate these changes. This is more difficult if you have engaged in-house developers.

Tips for Selecting an Outsourcing Development Company

It’s vital to critically evaluate all your options before committing to a single outsourcing development company. It’s a good idea to shortlist 10 or so candidates and evaluate them thoroughly before making your final selection.There are three key stages to follow as part of this process:

Basic information

First, do your research and gather the basic information you need about each candidate outsourcing development company. You can do this through internet searches or personal referrals. In some cases, a service provider might reach out to you directly.

Clients’ reviews

Most outsourcing development companies will profile their client success stories on their websites. These will give you an idea of the kinds of projects and technologies in which they specialize as well as the types of industries in which they have experience.


Look out for development companies that maintain a blog where they share thought leadership as well as technical knowledge and insights. This demonstrates a depth of knowledge and an interest in staying up to date with industry trends and developments.

Social media

Software development outsourcing companies that have a robust and regularly updated social media presence are those that feel they have valuable insights to share and opinions on newsworthy topics. Take this as a good sign. LinkedIn pages will also give you more information about the company, location, number of employees, and so on.After gathering the basic information you need, narrow your outsourcing development company shortlist down further. The next step is to closely look at your candidate development companies’ tech skills and expertise.

Tech skills

Review the technologies the outsourcing development company works with. Are they aligned to your own requirements? It’s a good idea to find out if the development company can tailor its tools to the specifics of your project. Also, bear in mind that technology changes at lightning speed, especially programming languages and frameworks, so it’s essential that your outsourcing developers have the latest certifications and skills.

Project management tools

Take a close look at the project management tools your potential outsourcing development company uses. These are critical as they will ultimately be used to track team members’ time, the scope of activity, and deadlines.At this point, it’s time to move on to scheduling an online or face-to-face meeting with the outsourcing development companies that have impressed you most so far.

Offline or online meeting

During this meeting, you should share the following with your prospective outsourcing development companies:· Detailed overview of your project and your vision for its outcome· Any concepts, templates, wireframes, or other materials that have already been developedNext, ask for suggestions and invite questions. Beware of outsourcing development companies that don’t have any!Finally, review this list of the top five stumbling blocks to avoid when making your final outsourcing development company selection:

5 Pitfalls to Avoid When Picking an Outsourcing Development Company

1. Selecting an outsourcing software development company without research

Of all the pitfalls, partnering with an outsourcing developer without prior research is one of the riskiest. Ultimately, your selection process resonates with your end project results. The higher the number of metrics that go into your research about the company, the more important becomes the reliability aspect. Always ensure that the pricing of the outsourcing development company is also ‘a’ factor and not ‘the’ factor in your selection criteria. Here’s how you can choose the right company.

  • Hear a minimum of five outsourcing developers’ offerings before making a decision
  • Make a detailed comparison of different companies based on numerous metrics like price, quality, reviews, feedback, testimonials, etc.
  • Ensure that the company aligns with the latest market trends and technological advancements
  • Conduct extensive discussions with companies to ensure that they match your expectations
  • After you are impressed with a list of outsourcing development companies, initiate your negotiation process to get the best value for your money.

Remember, well begun is half done!

2. Not establishing definitive ground rules

Documentation can help you avoid numerous unforeseen circumstances in the future when it comes to collaborating with an outsourcing development company. Unless and until you convey your expectations clearly to the outsourcing firm, satisfaction rates will continue to dwindle in its uncertainty compass. Explaining your expectations and needs and documenting them as part of an agreement can help you build a strong relationship with outsourcing development companies.

3. Underestimating the communication barrier

Communication is a highly impactful bridge that can determine the success of your collaboration with an outsourcing development company. As a result, never underestimate the role of clear and concise words. Discussing the project’s progress throughout its cycle periodically can help you eliminate numerous mishaps down the lane.

4. Not appreciating the role of a project manager

One common pitfall that most organizations commit after outsourcing is to eliminate project managers from the ecosystem. Project Managers (PMs) can act as your one-stop communicator between outsourcing development companies and your team. This way, you needn’t worry about the project delivery date or the final cost of the project.Project Management encompasses a wide range of services, including translating client’s requirements, reducing expenses, ensuring timely product release, etc.

5. Not visualizing the big picture

Short-term contracts with outsourcing development company could mean just one thing — your research about the company is not efficient enough. Once you collaborate with the company, start looking at the big picture rather than worrying about project delivery dates or costs. This way, as you reach culmination, the team of outsourcing developers is an integral part of your web development process.

How Can We Help?

Now that you have understood how engaging with a sound outsourcing development company can add value to your organization and how to go about selecting the best candidates, it’s time to roll up your sleeves!Why not join hands with the best outsourcing software development company out there? We at WayPath are industry experts in providing custom-built web development solutions that can elevate your organization’s growth in the shortest possible time.

Contact us today, and let’s talk!



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