Outsourcing software development projects can be a great way for companies to access skilled technical talent while controlling costs. However, finding the right offshore development partner requires careful research and planning. Here are some tips on where and how to outsource your software project effectively:
Choosing Where to Outsource
- Technical expertise and skills – Look for countries with strong engineering talent pools like India, which produces over 1.5 million STEM graduates annually. Evaluate skills in specific technologies like Java, Python, React, etc. needed for your project.
- Language and communication – Review English proficiency scores for countries on sites like EF EPI. For example, The Philippines ranks 14th globally in English proficiency. Also, consider time zone overlap – e.g. only a 1-2 hour difference between New York and Bogotá.
- Cultural compatibility – Consult frameworks like Hofstede Insights to evaluate national cultures. For instance, Eastern European countries score highly on pragmatism, helping faster decision-making.
- Data security and privacy – If your project handles sensitive data, consider countries like Singapore which has comprehensive data protection laws. Avoid politically unstable regions.
- Cost and time zone benefits – According to Statista, Eastern Europe offers amongst the lowest software engineering hourly rates globally at $25-45/hr, along with significant time zone overlap with Western Europe.
- Quality and maturity of vendors – India has over 2500 high-quality software services firms like TCS, Infosys, and Wipro who have delivered thousands of projects globally.
- Gather lists of vendors – Use directories like Clutch.co to create a list of 15-20 companies in your target geography and technology domain.
- Screen with RFIs – Use RFIs to filter to a Shortlist of 5-8 vendors based on development methodologies, security practices, communication infrastructure, etc.
- Shortlist with RFPs – Evaluate RFP responses on the project approach, transition plans, communication frequency, profiles of team members assigned, etc. to create a Shortlist of 3-4 vendors.
- Verify credentials – Speak with 2-3 client references provided to fact-check claims of delivery capabilities, security compliance, etc. mentioned in proposals.
- Assess communication – Schedule 30-60 minute calls with shortlisted vendors to assess English fluency based on the ability to understand questions and articulate responses clearly.
- Review work samples – Require code samples, documentation samples, and client demos to evaluate quality against your internal standards and industry best practices.
- Consider certifications – Leading vendors in Asia have over 100,000 employees with certifications like ISO 27001, ISO 9001, CMMI Level 3, etc. that demonstrate commitment to security and quality processes.
- Onsite visits – Visit the facilities of your final 2-3 shortlisted vendors in person to meet leadership teams and review development processes firsthand.
- Compare cost – Have 3-4 shortlisted vendors provide detailed estimates broken down by resource types, tooling, and other charges for side-by-side cost comparison.
Defining the Engagement
- Set detailed requirements – Document all features, integrations, technologies, security needs, and devices supported with wireframes, mockups, specs sheets, etc. Provide 150-300 pages of detailed documentation.
- Establish processes – Define team rhythms like daily 15-minute standups, weekly written status reports, monthly business reviews, and dashboards for tracking issues and change requests.
- Assign an onshore PM – Appoint a project manager onshore to coordinate daily with offshore team leads through standups, status reports, and tool-based tracking.
- Share knowledge – Create wikis detailing your tech stack, tools, architecture, guidelines, naming conventions, etc. to provide development context to offshore teams.
- Plan a kickoff – Conduct a 2-3 day onsite kickoff workshop with both teams to set expectations, demo existing codebase and systems, and answer questions.
- Visit the offshore site – Plan quarterly visits to see new team members, review processes, and address concerns raised by the offshore partner.
- Establish escalation paths – Ensure mechanisms to escalate issues from team members up through both onshore and offshore management chains to facilitate quick resolution.
- Set communication norms – Establish norms like response times within 24 hours, overlapping hours for calls, communicating availability during vacations, etc.
- Build relationships – Facilitate team-building activities like virtual coffee breaks, group lunches, informal chat channels, etc. to foster personal connections.
- Share feedback regularly – Provide weekly informal feedback and monthly formal reviews to highlight positives and improvement areas for both onshore and offshore team members.
Managing the Project
Proactively manage the engagement for optimal results:
- Monitor progress rigorously: Have daily 15-minute standup calls for status updates. Require the offshore team to submit daily reports detailing tasks completed, blockers, and next steps. Set up project tracking tools like Jira to monitor real-time progress.
- Bridge cultural gaps: Recognize differences in communication styles, hierarchy, and work-life balance expectations stemming from national culture. For instance, Asian teams may be less likely to challenge authority figures openly. Adapt your style to elicit candid feedback.
- Ensure specification clarity – When requirements are complex, supplement text documentation with diagrams, mockups, and examples. Have the offshore team explain specifications back to check to understand.
- Track issues aggressively – Log all defects and issues in a tracking tool like Jira. Classify priority level. Review weekly with the offshore team to maximize the resolution rate.
- Limit technical debt – Before approving any shortcut solutions that compromise code quality, require the offshore team to size out the future rework needed. Keep technical debt below 10% of the initial effort.
- Empower offshore leadership – Avoid directing specific tasks to offshore developers. Instead, articulate outcomes needed and have their managers assign work internally.
- Enable direct communication – Set up Slack channels, shared drives, and tools access to enable offshore team members to coordinate directly with onshore counterparts instead of working through intermediaries.
- Resolve conflicts quickly – When disagreements emerge, schedule a joint call with all relevant stakeholders to discuss openly until a consensus is reached. Do not let unresolved tensions fester.
- Reward successes – Call out great work in company meetings and informal peer recognitions. For major milestones, celebrate with a virtual team dinner or activity.
- Share feedback regularly – Along with weekly syncs, have monthly one-on-one calls with offshore team members to share constructive feedback and coaching.
- Visit occasionally – Budget one onsite trip every 6 months to reinforce relationships, assess progress firsthand, and make course corrections.
- Watch for warning signs – Red flags like stalled tasks, quality issues, or disengaged behavior signal problems. Proactively probe for root causes.
- Adjust course if needed – If the current trajectory is off-track, discuss necessary changes in schedule, resources, processes, or management tactics to get progress back on rails.
- Keep evaluating vendors – Every 18 months, reassess vendor team capabilities, and costs compared to market and cultural fit to determine if still the best fit.
- Build internal capabilities – Assign junior resources to shadow offshore teams to absorb knowledge and gain experience managing outsourced projects long-term.
Popular Outsourcing Platforms
Consider leveraging established outsourcing platforms that provide access to pre-screened development talent:
- GraffersID – GraffersID is the best platform to outsource your software project on a contract basis.
- Upwork – Leading freelancer platform with 5M+ software developers. Provides profiles, reviews, and hourly rates. Useful for small projects or staff augmentation.
- Toptal – Curated network of the top 3% of software developers, designers, finance experts etc. Great for quality talent but higher costs.
- Guru – Manages over 3 million freelance professionals. Good for finding affordable resources for simpler tasks.
- PeoplePerHour – Connects businesses with freelancers offering a range of skills. Has 2 million+ registered freelancers.
- Fiverr – Freelancer marketplace starting at just $5 per job. Good for quick fixes and small tasks.
- Flexible – Pre-vets engineers from emerging markets. Provides dedicated resources for ongoing engagements.
- Gun.io – Focuses on the top 1% of developers only. Hand picks talent and directly handles hiring.
- Hubstaff Talent – Specialized in finding remote software developers from specific geographies. Has 500k+ registered freelancers.
- Scalable Path – A boutique network of exceptional remote engineers for part-time or full-time roles. Very selective recruitment.
- X-Team – Curation platform providing teams of developers for ongoing projects or staff augmentation roles.
- CodementorX – Startup-focused platform to get engineering help from experienced mentors.
- Andela – Sources and trains engineers in Africa. Useful for staff augmentation.
Outsourcing software projects can enable access to specialized skills and significant cost advantages. However, realizing the benefits requires carefully choosing the right vendor and managing the engagement actively. Do your research to find technically capable, culturally compatible partners. Structure the deal and relationships for transparency and accountability. Finally, control progress tightly to provide visibility. With the right approach, outsourcing can amplify your software capabilities while freeing resources for more strategic initiatives.