How to outsource your application development

When do you need to outsource your app development?

This is probably the first question you should wonder before getting closer to the outsource world. In case there is still any hesitation, let’s check out the below factors on when you should consider to outsource your app development

• Time pressure: If you have a great idea for your application and want to launch it to the market as soon as possible, then this is the right choice for you as you don’t have to do everything from scratch (recruitment, training, organizing, planning, etc.).
• Cost factor: Recruitment and training for in-house resources always be one of the most costly parts of the whole process, when using outsourcing service, you would have these problems solved. Moreover, outsourcing companies usually come with custom libraries, ready solutions, and reliable IT-infrastructures that may help to improve the development velocity; as a result, save your time and money.
• Nice expertise: Sometimes your app requires more than regular developers to get the job done, for example, such rare skills like  AI, ML, VR, or Salesforce and DevOps. Recruiting these resources would be time-consuming and costly, and maybe unnecessary as you just need them for a short period. As a result, the outsourcing companies would be your best choice as they can offer on-demand engineers with rare or special skills on a project length basis or as a one-time service.
• Have limited resources: As a startup, in-housing resources are typically a problem. Hiring an outsourcing company would help ease that pain as they offer you a wide range of talents and resources.
• Don’t have tech background: You don’t need a tech background to run a startup, but when it comes to something that is tech-related, you definitely need help from the outsourcing companies because they will help you finish the missing piece in your big picture (cutting-edge technologies that help to boost your app).

Benefits of outsourcing your app development

Now you know when you should outsource your app, but probably another would pop up in your mind: Why should I do that? What are the benefits that outsourcing would bring to me as well as my business?
Below are some great benefits we have found out, you would even see more it can bring to you when you experience it yourself

• Extensive expertise: To stay competitive in the market, the outsourcing companies should continuously obtain cutting-edge technology and have a core team that varies from skills to backgrounds (QC, Developer, BA, etc.). As a result, they should have a better understanding of the market/trend as well as the app’s requirements that would help to save your time and give a huge boost to the progress.
• Scalability in terms of resources: You don’t have to worry about the resources when working with an outsourcing company because most of them should have a core team and the ability to scale up or down based on the project’s requirement.
• Cost-effectiveness: Outsourcing can reduce the cost of the company in several ways.  One of the most important things is you can reduce the recruitment, training, and onboarding costs. Another way to reduce cost is to outsource services that don’t require a full-time employee for the whole year, your company can reduce cost significantly, without sacrificing quality.
• No micromanagement: No micromanagement is needed. All you need to do is define a clear goal/KPI and a specific time frame.

Outsourcing models

There are many outsourcing models that you can include in your consideration list. However, in this article we will just introduce to you the two most basic outsourcing models that we find are pretty common and being used widely. Let’s find out what they are and what are their Pros and Cons below:

Freelance developers

• Pros:
  • Attractive hourly rate: Since there are thousands of freelance developers out there, they usually offer you a very competitive price for their service.
  • Various sources to hire: Nowadays, there are many freelance websites that play the role of the bridge between employers and freelancers and you can easily narrow down your desired candidates using the provided filters.
  • Best suit for small app or customization: If your app or customization on the app is not big and it matches with the freelance developer, you may save a lot of time and money thanks to that.
  • Flexibility: You may easily end the contract with the freelance developer once their job is done, without any maintenance cost like in-house resources.
• Cons:
  • Management issue: Unlike in-house resources, freelance developers usually work from home and work on their own preferences hours, so it’s hard to manage them if you don’t have a clear reporting rule from the beginning
  • Commitment and loyalty: There were some reports indicated that they usually show off at the bidding period and the actual quality after a few days was quite different. On the other hand, there is always a risk that they may drop your project and do another with a higher pay rate in case of conflict.
  • Confidentiality issues: Beware of this issue if your organization or your app has confidential data. You may want to sign a non-disclosure agreement from the beginning as who knows if they are also working for your competitor at the same time.
  • Availability: If you got someone who you have worked with when you have work, it’s uncertain that they will bandwidth to cooperate with you as they usually  have multiple projects at the same time

Outsourcing company

• Pros:
  • Reliability: Working with an outsourcing company is way more reliable than freelance developers. Why? Because at least it is a company and has a legal entity – which can ensure they will have more responsibility when working with their clients.
  • Best suit for a big/complex app: As a company, they have resources to handle big and/or complex apps. Moreover, as it comes to reputation, they always put quality on top of their priority.
  • Commitment: There are terms and agreements defined in the contract at the beginning, so the outsourcing companies would adhere to those and do their best to deliver your app on time.
• Cons:
  • Higher cost comparing to freelance developer
  • Company culture: This is not frequently happened but you must communicate with your employees prior to approach an outsourcing company as they may not understand the big picture or feel “unsafe” in terms of their working position.

At Inovatoro, we don’t just promise, we have our standards to ensure your quality. Another reason why you should choose us is we offer a free pilot program, like a free trial before you purchase the service.

How to choose outsource development company

Amongst thousands of outsourcing development companies, you will need to choose those that you can trust and match your set of requirements: Experience with the platform/framework your team is developing on, Tech stack used to implement your application. However, the matching result list will be a little long, so how do you pick the right one? 

Developers in countries of Eastern and Central Europe have high rates, and the USA remains the most expensive for outsourcing. As a result, depending on your budget, you can carry out research on some companies from the cheapest region, such as Viet Nam, The Philippines, India, or Pakistan. 

There are three basic steps to help you choose your future vendor:

• Review: Two ideal places you can reference for reviewing process are Clutch and Goodfirms, they come with the company’s reviews and rating. Look closely at the portfolio and work history of the company, its expertise in your industry, and the relevant case study. 
• Communication: Invest your time on how to transparent the development process and decide which communication and management tools are going to be used. 
  • In the outsourcing world, you may face challenges coming from the gap of timezones, cultural and language barriers. Without establishing regular communication channels, your project will be likely to fail.
  • For example, when we worked with a client in Netherland, we used Azure DevOps to manage our tasks (following the Agile process) and communicate via Microsoft Teams. Those are effective tools that helped us easily communicate and coordinate works.
• Tech Stack and required experience: You would want to find a team that has the expertise in the technologies that applied (or you want to apply) to your app. In addition, the provider should have experience working with clients in the same industry as your business.

Engagement models

Team-based (TaaS) known as Team as a Service.

This outsourcing model allows companies and businesses to construct teams of the people that possess the perfect skills necessary for the project. 

With the TaaS model, you hire a remote expert team to work with you explicitly. You can decide who gets hired and what the requirements are. This model will provide you the control over not just who works on the project, but over the project as a whole.

This can be incredibly useful in situations such as:

• You need to extend your in-house team with well-experienced engineers quickly
• You need to grow your business rapidly
• You can set up the whole development process yourself and hire a remote team to work with
• If you require quick execution on a fixed budget

Service-based

If you clearly understand the scope of work and what should be done, we can jump in and work with you no matter where you currently are in the development cycle. 

For example, in the integration projects, our client focuses on the core software and on-premise services and hires us to complete the cloud-based integration part. We are responsible only for the assigned scope of work, not for the whole end product.

Payment models

Once you have chosen your suitable engagement/outsourcing model, you should start to consider the payment model that best fits your situation.

Time and Material

Customers are charged for the amount of hours spent on a specific project. The main advantage of the Time & Material model is flexibility and the ability to change the project requirements at any stage. You can pay biweekly or monthly based on the time spent on the work. At the end of each iteration, the provider will estimate the work and forecast the budget for the next iteration.

Fixed pricing model

Fixed pricing model is a model that guarantees a fixed budget for the project, regardless of the time and expense. The main advantage of a fixed price model is that it allows the client to plan and set an exact budget. A fixed pricing model is the best suitable for projects with defined requirements that won’t change during the development process or maybe rarely. Any changes will be considered as a change request, it requires additional estimation and contract.

Time and Materials		Fixed Pricing
Advantages	Disadvantages	Advantages	Disadvantages
High flexibility on project scope, requirements, timeline. Precise payment model as it’s pay-as-you-go pricing model. Process transparency. Ability to modify the course of actions to reflect the current scenario at best.	Budget can’t be forecasted precisely. Deadlines might drastically change. Proactive involvement requested to the client for all project phases.	Precise final cost of the project. Clearly defined and agreed upon deadlines before project kick-off. High predictability of the development process. Little involvement required from the client.	Long and meticulous planning phase. No changes can be made during project implementation. No room for adding missing key information after project kick-off. Higher and costs.

Conclusion

With all the analysis above, we do hope that you are able to make your decision: whether to outsource your application development and how to do it. In case you have made up your mind and are looking for a reliable outsourcing company, Inovatoro will definitely be your best choice amongst thousands of existing startups. Why? Because we understand the market, we have a core team that frequently researches and applies cutting-edge technologies to real projects, and most of all, we ensure the quality and offer you a free trial of our service: pilot program. If you still have questions/concerns or need advice, please do not hesitate to reach out to us at [email protected].