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How to outsource software development?

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Outsourcing software development has become a vital strategy for businesses navigating today’s fiercely competitive and tech-centric global market. In an era where staying ahead demands constant adaptation to evolving technologies, outsourcing offers organizations the flexibility and agility needed to maintain a competitive edge. 

In this comprehensive guide, Saigon Technology delves into how to outsource software development, covering essential considerations before embarking on this journey.

How does outsourcing product development benefit you?

To determine whether outsourcing product development or building an in-house team is best, consider your specific needs. Outsourcing can be ideal if you’re on a tight budget and need a quick market entry. It saves time, allowing focus on other business aspects, and grants access to skilled developers specializing in areas like mobile or cloud computing.

However, remember that outsourcing might pose communication challenges due to different time zones. You’ll have less control over the development process, relying on the outsourcing company. There’s also a risk of intellectual property loss or theft when outsourcing.

From a broader perspective, outsourcing product development brings several advantages:

  • Cost-effectiveness: By outsourcing, you can cut down on expenses associated with employing full-time developers, such as salaries and benefits.
  • Access to specialized expertise: Outsourcing grants access to specialized skills and knowledge that may not be available in-house, particularly beneficial for intricate or innovative projects.
  • Accelerated time to market: Outsourcing accelerates product development timelines since there’s no delay in hiring and training internal staff.
  • Enhanced flexibility: Outsourcing offers flexibility in team size, allowing you to adjust resources according to fluctuating demands. This agility is valuable during periods of rapid expansion or temporary capacity needs, while also minimizing risk through collaboration with reputable firms with proven track records.

How to outsource software development? Step by step to consider

Define your project vision

Before delving into outsourcing, it’s crucial to have a clear vision of what you want to achieve. This clarity will facilitate effective communication with your development team.

Ask yourself:

  • Is your concept well-established or groundbreaking?
  • Have you validated your idea with a Proof-of-Concept (PoC)?
  • What technology stack will be most suitable?
  • What specific problems will your software address for its users?

Write a scope statement for your project

Crafting a scope statement for your software project is crucial before selecting an outsourcing partner. To ensure thoroughness, delve into aspects like objectives, deliverables, scope, content, and budgets. This serves as the groundwork for your project roadmap.

Here’s how a project scope template can assist you:

1. Project Objectives:

  • Define the overarching goals of your software project, including the target audience and the problem you aim to solve for them.
  • Articulate how the software project aligns with your business objectives.
  • Understand the purpose behind developing the software, whether it involves addressing internal organizational issues, generating profit, or modernizing legacy software.

2. Project Deliverables:

  • Specify the desired outcomes for each sprint cycle, particularly if employing an Agile methodology.
  • Determine if the project will follow a Minimum Viable Product (MVP) approach.
  • Clearly outline the results expected upon completion of the development process.

3. Identify What’s Out of Scope:

  • Define what aspects your software project will not encompass.
  • Establishing the project scope helps prevent scope creep and ensures that resources are not wasted on features that do not contribute to project enhancement or goal achievement

Decision time

It’s time to choose between developing in-house or outsourcing. Making a smart decision involves considering various factors. While cost isn’t the sole consideration, getting competitive pricing is a big advantage of outsourcing your software development abroad, especially if you can find a skilled team that gets your vision.

Choose the right outsourcing approach

There are three main types of relationship-based outsourcing: staff augmentation, managed teams, and project-based outsourcing. Decide on the most suitable model based on your needs, budget, and long-term goals.

Staff augmentation

This method involves temporarily outsourcing personnel from an external organization, typically to fulfill a specific project. It’s utilized mainly to bridge skill gaps within your organization. The outsourced staff works under your guidance, assisting your team in reaching project completion.

Managed or virtual teams

The managed teams approach is a blend of staff augmentation and the project-based model, which will be discussed later. Under this model, you enlist a complete team of professionals, such as Business Analysts, Designers, QA Engineers, front-end and back-end developers, etc., to manage some or all aspects of your project.

Project-based model

Choosing project-based outsourcing doesn’t mean relinquishing control entirely. You’ll still have input on crucial decisions like feature development and prioritization. However, you won’t need to handle the day-to-day management of the outsourced team. This option offers the most hands-off approach.

Streamlining company selection

Engage in conversations with acquaintances and peers within your industry who have previously outsourced software projects. Their insights and experiences can assist you in narrowing down potential agencies that possess relevant expertise in your field. 

Exploring freelancing platforms is another effective approach to finding software developers. Well-known platforms such as Toptal, Upwork, Fiverr, Freelancer.com, and People Per Hour offer diverse opportunities. Some platforms necessitate outlining your project’s specifications and financial constraints, while others allow you to directly contact individual service providers. 

Additionally, these platforms typically facilitate browsing through profiles and applying filters based on criteria such as geographical location and budgetary considerations.

Ask for a complimentary consultation

Once you’ve narrowed down your choices to 4-5 software development firms, reach out to their sales team. Engage with their specialists, request free consultations, inquire about their previous work and case studies, and delve into their approach to software development, methodologies, preferred programming languages, and technology usage.

These discussions typically cover:

  • Software needs
  • Minimum Viable Product (MVP) development standards
  • Collaboration duration: short or long-term?
  • Estimates for costs and development time
  • Development plan


To summarize, outsourcing software development can be a strategic option for firms seeking cost savings, access to specialized personnel, and faster project schedules. Companies that carefully select the proper outsourcing partner and maintain good communication throughout the process can reap multiple benefits and propel their projects to success.