Software Outsourcing Best Practices

Many companies embrace outsourcing for its ability to optimize costs, increase capacity, or tap into a specialized workforce on demand. That said, realizing those benefits requires much more than providing an outsourcing company with an idea and some cash.

Building software that hits every business objective, customer demand, and deadline and satisfies every stakeholder with skin in the game is incredibly hard to pull off.

In this section, we’ll look at the outsourcing best practices that will help you ensure that your next project is a success.

Get Your Strategy in Order

One of the most critical best practices for outsourcing software projects is that all projects and partnerships must tie back to the master plan.

According to KPMG’s 2019 Future of IT report, companies that stand to get the most from their digital transformation investments focus on funding projects with a direct impact on the business strategy, not one-off projects.

Before you do anything else, make sure that you define your target objective for this outsourcing project. Why are you doing this, and what is it that you hope to achieve? Are you responding to a new customer need? Attempting to scale your company? Looking for an opportunity to reduce costs?

Whatever it is, it should focus on a single, measurable goal that you can communicate within a sentence or two.

Establishing absolute clarity around the “what” and the “why” behind your strategy will help you choose an outsourcing partner focused on outcomes. Conversely, it will enable you to do the same for your end-consumers.

Additionally, a well-defined plan will help you map out where you’ll ship the project–based on factors like required skills, your level of involvement, or whether the project is part of your core business or a tangential side-project.

Perform Your Due Diligence

It’s understood that “performing due diligence” is one of the more obvious outsourcing best practices around. It’s critical to note that you’ll want to be extremely thorough, weighing your options against all potential threats.

It might also be useful to do a self-assessment at this stage. For example, you might ask yourself the following questions to get a better sense of what you want from your outsourcing provider:

  • How good are your internal project management skills/tools?
  • Do products and processes align with the voice of the customer feedback?
  • Do you have a strategy for incorporating customer data into the development lifecycle?
  • How will you measure the business impacts of your software investment?
  • Can your existing infrastructure support a distributed workforce? And is it properly secured?

Once you have an idea of what you hope to achieve, your next move is to start looking for a partner you can trust. This partner should have the best assets, skills, and relevant experience to deliver the results you’re looking for.

Make sure you perform adequate due diligence on potential vendors. Here, you are running a background check, verifying financial stability, and looking at external factors like economic conditions, natural disasters, and local infrastructure to identify potential risks.

If possible, get recommendations from people you trust. Have any of your industry contacts worked with an outsourcing firm in the past? What was their experience like?

Evaluate the team’s experience and skills, as well. How do they recruit and hire talent?
What technologies do they use? What about programming languages?

Keep in mind, you should focus more on finding out if the vendor can deliver the desired outcome more than focusing on a particular tool or language. The main thing to look for is a vendor with a diverse talent pool who uses the latest best practices/languages/tools.

Make Sure You’re Set Up for an Effective Agile Collaboration

Yes, there are certain instances where Waterfall can work well, but in most cases, Agile–or a hybrid methodology like PMI ACP–will yield better results for businesses focused on long-term objectives.

The KPMG report we just mentioned advised organizations to fund products before all of the details are defined–allowing developers and clients more flexibility when it comes to delivering the product that brings the greatest return on investment–which, in the context of outsourcing software development, points toward a model in which you’re working with an Agile team long-term, on retainer.

Before you get started, ensure that you have the right tools in place for effective collaboration.
To be successful, you’ll need to make sure that you (or someone from your team) is involved in the project.

It’s a major commitment, and you’ll need to spend time preparing for it in advance. You’ll be defining workflows, setting expectations around availability, collaboration and communication, and establishing a schedule.

Additionally, ensure that you have the right tools in place to support your efforts–think project management software, tools for collaborating on code, video conferencing and chat applications, as well as a centralized content repository that provides easy access to everything developers need to know.

You might also need to add more users to existing licenses and subscriptions to accommodate your outsourced team and incorporate them into existing workflows.

Protect Yourself So That Trust Isn’t an Issue

From contracts and SLAs to your customer personas and business rules, get your legal and strategic plans in writing before the partnership officially begins.

Performing adequate due diligence during the vendor selection process should help you mitigate many of the risk factors associated with outsourcing–and ideally, you should settle on a provider you trust just as much as your actual employees.

A lot of companies–at least initially–have a tendency to limit developers’ access permissions for security reasons.

While it makes sense for companies to err on the side of caution, limiting developer access to critical tools and insights has two unfortunate side effects. For one, it creates a divide between in-house and outsourced teams.

And for another, external developers may not have what they need to deliver high-value solutions–much less work within the same productivity standards as the in-house team.

For example, limiting permissions in critical tools could potentially prevent the outsourced team from completing their work until someone from the organization is available to help solve the problem.

Some organizations even place an additional burden on outsourced teams by building more revision and approval steps into the workflow.

Both instances can result in the perception that outsourced teams perform at a lower level because processes take longer than they should.

They might not be involved with all core business activities, but it’s crucial that you provide the team with the reference materials they need to understand how your business works and what you’re hoping to achieve so that they can find the best solutions for the job.

That said, you also want to protect yourself by ensuring that you have control over your entire network. Proprietary insights and customer data should be secured, and you ought to have contracts in place that fill any gaps in legal protections.

Embed Outsourced Teams in Your Company Culture

Teams shouldn’t be viewed as two separate entities—it’s not an internal vs. external team. Effective outsourcing strategies hinge on all developers working as a cohesive unit.

Team building is one of the most important best practices for outsourcing software projects. It’s also a band-aid when it comes to ensuring true team integration. Something that’s often missing from outsourcing best practices lists is the significance of connecting with your new team on a human level.

Unfortunately, many companies don’t make an effort to understand the cultural differences between teams when partnering with a vendor in another country. Even in nearshore partnerships where developers are proficient in English and have many cultural norms and reference points in common, there are still a few differences between teams.

What ends up happening is that a lot of the behavioral expectations are placed on the outsourced developers, when the reality is, integration should be a two-way street. Clients should make an effort to get to know the person behind the computer, learn about their culture, and listen to their suggestions. Use having a diverse team to your advantage.

Additionally, you’ll want to make sure you document your business rules and explain your process to the outsourced team, making an effort to not only include them in all communications related to the project but also more general meetings regarding company status, milestones, and progress toward goals.

Additionally, there needs to be an established process for reviewing team performance that ensures that both teams are effectively working together to drive improvements.

Final Thoughts

While somewhat general, the software outsourcing best practices we’ve outlined above are less about what you’re trying to accomplish and more about giving your developers the tools they need to succeed.

For clients, that means making an effort to incorporate external teams into their company culture, providing them not only with the tools and contextual information they need but also creating a welcoming culture that enables close collaboration with your in-house team toward a shared set of goals.

To learn more about our software development services, contact us today.