Programming Outsourcing 2.0 – Detailed Step-by-Step Guide

1698 Updated 08.11.2022
Yuriy Matviyuk

Development Tech Lead

5/5

Table of contents

When you decide to outsource programming projects, it means you want to deliver your product on time and within budget. While many companies have already realized that outsourcing is a cost-effective solution to meet multiple business needs, you may still be wondering how the IT offshoring market has changed today.

According to Statista, IT outsourcing revenue is projected to reach $587.30 billion by 2027, with an annual growth rate of 8.26%. These figures confirm the growing demand for outsourcing.
But how can you be still sure that programming outsourcing is the right solution for your business?

So, we decided to put together our experience and knowledge to help you answer this question. In this article, we’ll refresh all the important nuances of programming outsourcing, highlight the reasons why you need it, and outline the steps you need to take to make sure things are done right.

When programming outsourcing is right for your business?

Programming outsourcing is a cost-effective approach where you can delegate programming to an external vendor instead of using your in-house resources or building a team from scratch.

No matter what stage of the project you are currently in, software development outsourcing can help you close any tasks. In any case, the Northell team presents other valid reasons to outsource programming projects.

When Programming Outsourcing is Right for Your Business

When Programming Outsourcing is Right for Your Business

You want to optimize costs

By paying only for the service rendered, you automatically get rid of the additional costs associated with employment contracts. Despite the high rates ($100 to $200 per hour) you lose out on hiring a US or UK software developer, you should also consider the added perks and benefits.

Therefore, it is cheaper to outsource programming projects to companies in Eastern Europe, where the average hourly rate for a software developer is $50. Plus, instead of lower development costs, you get a quality service with a balance of in-depth experience and creativity.

You lack knowledge and experience

When you create your digital product, you do not need to have special knowledge or experience. You can outsource computer programming at any stage of the software development lifecycle.

It doesn’t matter if you came up with a product idea or are already at the UI/UX design stage – any task can be solved with the help of remote teams. Depending on your outsourcing provider, you can access any kind of service such as consulting, design, marketing, development services, etc.

All you have to do is notify your potential partner of your need, and they will estimate your project based on product specifics and your budget, and then offer an optimal solution.

You want to avoid hiring problems

When you decide to outsource programming projects, you skip over the recruiting and training phases. Outsourcing providers take full responsibility for searching and recruiting potential employees. In addition, professionals always see professionals, so it’s easier for outsourcers to find experienced and highly qualified specialists in the right area.

You want to focus on your urgent tasks

It goes without saying that programming outsourcing allows you to focus on your core tasks. Once you have the internal resources you lack, as a startup you can free up time for other business routines.

This way, you can focus on building your company, finding clients, and gaining more control over processes to help you reach your business goals faster.

You want to increase efficiency

One of the biggest benefits of outsourcing is the ability to collaborate with a pool of skilled programmers who can easily and quickly complete tasks. To ensure a smooth product release, it’s not enough to write a code.

Developers must be highly qualified and experienced to deliver their projects on time and with the expected quality.

At Northell, we provide our clients with the opportunity to add new requirements or make corrections regularly. Team members who are ready to tackle the issue take on the task as they go.

You want to ensure product quality and successful releases

In addition to freeing up time and resources for developing your product when you outsource programming projects, you gain access to a pool of talent that can provide you with a higher quality of work.

Collaborating with Northell, you can expect a professional approach to our services, including transparent workflows, talented specialists, established processes, and proven technologies. These allow us to guarantee our clients high-quality products and successful releases.

3 ways to outsource computer programming

There are three ways to outsource programming projects. Before you decide to outsource computer programming, you must weigh the pros and cons of each option. Let’s do it together.

Pros Cons
Freelancers
  • Direct access to a pool of diverse candidates around the world
  • Technical co-founder required
  • Increased risk of startup failure
  • Security threat
  • Increased risk of improper commitment
In-house team
  • Direct access to employees
  • Expertise in a company’s profile
  • Personal engagement
  • Financial obligation
  • Possible overheads
  • Full responsibility for risk and task management
  • Lack of versatility
A dedicated team
  • Full control and less micromanaging
  • Improved cost-efficiency
  • No recruiting and onboarding hussle
  • Receiving unclear requirements from the client
  • Risk of improper commitment

Hire freelancers

When you decide to hire freelancers, you will need a technical specialist who will take care of all the recruiting hassle. In addition to finding and hiring, this team of freelancers will need onboarding and mentoring. Organizing freelance work, as well as keeping track of all the potential issues you might run into, can seem like a daunting task. Also, this way of outsourcing is risky because building the wrong team can cause your startup to fail.

Assemble an in-house team

In the case of assembling an in-house team, you will also need hiring expertise and take care of the legal work. In addition, you will be responsible for the task and risk management and keep your team busy to avoid paying fixed remuneration during periods of inactivity.

Sometimes, you’ll also need to pay for the office rent, software, or hardware needed for in-house teams.

Choose a dedicated software development team

By delegating programming outsourcing to a dedicated software development team, you will work using flexible pricing models such as fixed price, time and materials, and a dedicated team. In addition, you will get a team that has experience in your niche, working on small, medium, or enterprise-level projects.

If you choose the right software development partner, you will also benefit from a well-managed team that adopts best practices and tools to guide your project.

Ready for long-term and result-oriented cooperation? Deliver your project on time, within your budget, and with the quality, you require with our dedicated software development team.

What is the best destination for programming outsourcing?

Finding the right outsourcing team is not a trivial task. There are certain aspects that you must take into account to choose the right location for your team. So, we suggest you follow certain recommendations:

  • Consider positions in global ratings of IT destinations. This way, you’ll be able to narrow down the list of potential outsourcing partners.
  • Estimate the hourly rate for the best outsourcing destinations worldwide. Asian countries tend to charge lower rates while Latin America and Eastern Europe charge higher. However, you shouldn’t make a decision on only one criterion. Plus, it doesn’t mean you can achieve the best value for money.

Map

Map

  • Explore cultural aspects. Cultural gaps can potentially lead to ineffective collaboration. So, find out more about the country where you want to hire a team or choose a country with a similar mentality.
  • Pay attention to the time zone difference. Time zone differences may cause delays in communication and delivery. However, there is a solution to this problem, which you can find later in the article.
  • Assess the level of English proficiency. A proper level of English proficiency is a must for easy communication and mutual understanding.

These factors make Eastern European countries attractive to outsourcing. In addition to affordable hourly rates ($30-$65), these countries have already demonstrated the ability to produce high-quality digital products for multiple business needs in various sectors.

Moreover, they are adopting the latest technologies such as the Internet of Things, robotics, artificial intelligence, etc., and have a strong educational background.

Services you can outsource to Northell

Our extensive portfolio consists of projects implemented for both startups and enterprise-level companies. We have niche expertise in building successful products for many industries, such as education, ecommerce, real estate, healthcare, fintech, etc.

You can develop your brand identity, redesign your existing digital product, or request building a fully-featured custom application to meet various customer needs through the services we provide:

Dedicated software development team

As we mentioned earlier, a dedicated software development team is the way you can outsource programming projects. Collaborating with Northell teams will help you to deliver your project on time and help to achieve your business goals with less effort and money.

On the way to achieving it, we start your project with requirements gathering to collect your requirements and set up a workflow. You are free to choose any tools and management methods to guide your team.

We evaluate candidates and shape the best-fit team for your project. As a result, you get a highly-skilled dedicated team that you can control and assess remotely without any administrative hassle.

Web development solutions

Armed with the most powerful tools and technologies, the Northell development team offers expert assistance in creating profitable web solutions.

From product discovery to product maintenance, our highly trained professionals design and build your product throughout the software development life cycle. We apply a personalized approach to any project to build unique, scalable, and robust solutions with extensive functionality.

Custom mobile app development

Following a customized approach to building mobile applications, we supply the software markets with our IOS, Android, and cross-platform solutions. We conduct business analysis to formalize product specifications and build a strong application architecture. After that, our developers get to work on your application’s components.

At the same time, QA engineers are involved in every short development iteration to test the delivered code on time and avoid overhead. We gather early users’ feedback and make code fixes if needed. As a result, your fully-fledged and reliable product is ready to compete in the market.

Product design solutions

Northell’s experienced design team can transform any idea or concept into a convertible and usable design. Our UI/UX designers are especially attentive to all stages of the user journey to make it simple and attractive.

Starting with creating user flows and information architecture, the design team moves on to creating product layouts and building a design system. Using our own UX lab’s powerful Eye Tracker tool, we test the product for bugs, fix them, and improve the overall conceptual design.

Usability audit

Whether you already have your product or are building it from scratch, you may run into various usability issues.

Northell’s usability audit service will help you to improve the performance of an online product and organize the correct user scenarios. We dive deep into your product to understand your target audience, perform detailed website analytics, and identify key areas for improvement.

Graphic support

Building brand awareness is a challenging task that you can outsource to Northell professionals. Paired with a personal designer, you’ll be able to make your product match your expectations.

Our experienced design team will assist you with business presentations, case studies, and social media content visualizations, as well as help with a logo design or brand guidelines. See how this process works in detail.

6 steps to outsource computer programming smartly and efficiently

Having a solid outsourcing strategy is the first step toward productive programming outsourcing. To hire the right outsourcing vendor, you’ll need to plan this collaboration thoroughly based on several important criteria. Let’s look at the steps you need to consider before you decide to outsource computer programming.

Step 1. Formulate your current business needs

Programming outsourcing companies provide a wide range of different services to meet all your needs. However, you must be clear about your business goals and needs and request the exact type of service you need. At this point, you can narrow down your search by understanding what expertise, collaboration model, and budget you need to outsource tasks.

Step 2. Choose the right region for outsourcing

We already mentioned the importance of choosing the right region to outsource computer programming.

Choosing an outsourcing destination directly affects your project deliverables, productivity, ease of communication, and the overall quality of the service provided.

By following our recommendations, you’ll be able to significantly improve your project outcomes and delegate your work to the top-rated software development company.

Want to learn more about how to hire remote developers and evaluate their performance? Read more in our article.

Step 3. Determine the appropriate pricing model

Once you have a clear understanding of the services you need and the region to outsource, you should choose the pricing model that works best for you.

There are three options you can choose from: time and material (T&M), fixed price (FP), and dedicated team. Let’s decide on the pros and cons of each option.

  • Time and material. This model implies payment only for the time spent on development. This pricing model is suitable for small or medium-sized projects with no predefined requirements, or for a project that requires limited resources.
Time and material
Pros Cons
  • Full client engagement 
  • Greater flexibility if project requirements change
  • Slow time-to-market
  • Difficult to estimate the required budget
  • Unclear time limits
  • Fixed price. This model is a type of contract in which both parties, the client and the vendor, agree on the scope of work, the time frame, and the required budget before development begins. This model works best for small projects.
Fixed price
Pros Cons
  • Clear budget fit according to predefined specifications
  • Faster time-to-market
  • Increased risk of project overheads due to the possibility of product changes
  • Requires careful planning
  • Less interaction between client and customer
  • Dedicated team. In this model, the client pays monthly salaries to hired professionals throughout the project. This type is best suited for long-term projects that require specific domain expertise.
Dedicated team
Pros Cons
  • Full client engagement and control over the processes
  • No onboarding needed to gather the development and design team
  • Improved cost-efficiency
  • Sometimes well-formed specifications may be missing

Step 4. Filter the list of potential outsourcing partners

It’s better to explore dedicated platforms like Clutch, GoodFirms, or TopTal to simplify the search for potential outsourcing partners. These popular platforms contain only reliable information about IT companies. By scrolling through these websites, you can filter your search based on services provided, the budget required, hourly rate, industry, and more.

You can also read reviews from real clients, evaluate portfolios and profiles of companies, and understand what industries these companies have experience in. You can do your search on LinkedIn, where you can find the same information and communicate in person. In this way, you can easily see if the company fits your goals and decide on a couple of potential partners.

Step 5. Evaluate the team

Once you’ve decided on the team you’d like to collaborate with, you can start evaluating the team’s background. To do this, first, study the team’s portfolio. You will understand their level of professionalism and understand whether they are capable of releasing different projects.

Secondly, you can study references or ask a potential partner to send them to you. By exploring the references, you can see the real team’s work attitude, style, and ability to cope with
emerging issues.

Thirdly, don’t skip the English language proficiency assessment. Especially if you’re planning long-term and effective cooperation with your team.

Step 6. Discuss the details of the agreement with your legal team and sign a contract

When you’ve finished all the above steps, you can start signing the software development outsourcing contract. But before doing it, you will need sufficient protection of your intellectual property, ensure data protection after product release, and understand clearly defined consequences in case of the agreement termination. There are such important contract sections needed to be included:

  • The services. This section reveals a detailed description of the programming outsourcing services provided and describes the scope of the project. It should also show the process of making changes to the scope.
  • Project time and cost. This section should specify aspects such as hourly rates, development milestones and deadlines, payment schedules, liability for non-compliance, and the like.
  • Intellectual property rights. Make sure the contract states your property rights.
  • Confidentiality. This section shows what information is confidential and what action will be taken if it is disclosed.
  • Acceptance criteria. This section governs the terms for accepting an agreement, which is necessary to determine whether both parties comply with the requirements of the contract.

Once you’ve successfully completed the above steps, you can sign the contract and officially start working on your project with your partner.

Northell best practices to outsource programming projects

Let us now share the best practices to create a successful outsourcing strategy and pay off your project quickly.

Define budget and timeframes

The top-rated outsourcing company should provide you with an accurate picture of development progress. This can also include the expected output and approximate timelines by which the company is committed to completing the work. In addition, you must determine a budget that you are not going to exceed.

At Northell, we advise our clients and evaluate project scope based on the required budget and time frame. Thus, we can allocate the number of resources and capacity to complete the work on time and deliver quality products.

Manage remote teams successfully

Effectively managing remote teams is essential to a successful outsourcing experience. Lack of face-to-face communication, different time zones, or cultural differences makes team management difficult.

That’s why the Northell team suggests developing a specific strategy for managing remote teams. For example,

  • Successfully access team progress to identify any potential issues before they become difficult to deal with using video calls
  • Use the right tools to collaborate with your remote team for easy and fast communication
  • Encourage team building activities to reinforce the sense of team spirit, which will lead to higher performance and trust within the team
  • Create a set of standards to avoid missteps in dealing with your outsourcing team

Choose powerful collaboration tools for remote teams

You need to properly set up your workflow using the appropriate remote collaboration tools. It is vital to automate your routine tasks and choose tools that will help you easily communicate with your team. In addition, you must ensure that your outsourcing team can access them as well.

At Northell, teams use specific tools for communication, design, development, project, and task management. For example,

  • Communication tools (Slack, Skype, Google Hangouts)
  • Project and task management tools (Trello, Jira, ClickUp)
  • Design tools (Moqups, InVision)
  • Developer tools (GitHub, Bitbucket)

Establish transparent workflows

Thanks to Agile methodologies, it has become possible to establish transparent workflows easily. Following this approach, you’ll be able to promote the team’s self-organization while achieving the desired result. Transparent workflows facilitate efficient outsourcing. To achieve this, follow the tips from Northell:

  • Use Agile methodologies to keep the development process visible to all parties
  • Divide tasks into smaller iterations to timely eliminate problems
  • Hold regular meetings to check the team’s progress

Programming outsourcing challenges: how to get things done

Project failures can cost businesses a fortune. So it’s critical to avoid them from the very beginning. So, we prepared a list of common challenges often associated with outsourcing and solutions to help you mitigate them timely.

Communication gaps and cultural diversity

Problem: When you decide to hire an outsourcing company, you get access to a global pool of talents. This turns out to be the biggest advantage of outsourcing. However, one of the main challenges of remote team collaboration is communication gaps and cultural diversity. If you live in the US and choose an outsourcing company in India, you may encounter communication difficulties and cultural differences.

Solution: As we mentioned above, use effective collaboration tools, encourage team-building activities with your team, and reach out to your remote team via video or audio call to build a successful communication channel.

Inefficient product development workflows

Problem: Non-transparent and inefficient product development workflows lead to failure to understand the project, clarify requirements, and set up a delivery schedule.

Solution: To avoid this, we suggest creating a Software Requirements Specification (SRS) to help both parties have a clear understanding of the product expectations and deliverables of the remote team.

Failure to meet code quality standards

Problem: Failure to meet code quality standards can be a big problem. Code quality is an important attribute of a product’s long-term success and bug-free implementation.

Solution: Apply best practices for the programming language in which the application is written. Discuss a set of standards for proper cod quality with your outsourcing partner.

Confidentiality risks

Problem: If you’re a startup, there is a risk of missing important details of the contract and incurring significant financial losses. The contract acts as a roadmap when working with an outsourcing team and must necessarily indicate what information is confidential.

Solution: Discuss all-important contract details with your legal team and outsourcing partner. Sign the contract after getting clarity on privacy issues. Make sure your contract includes this section, including details about disclosure penalties.

Want to know how to easily and effectively prevent the hassle of hiring an offshore development team? Find out more details in this article.

How much does it cost to outsource programming projects?

As mentioned earlier, there are specific hourly rates for programming outsourcing in different countries. Having summarized all mentioned above, you can study the average cost of programming outsourcing by region and project stage.

Rough project costs

Rough project costs

Speaking of estimating project timelines, let’s take a look at the table we’ve calculated below.

Surely there are other factors that can affect the final project cost, for example,

  • Business model
  • Features package
  • Expected time to market
  • Development approach
  • Team location
  • Team size
  • Team expertise
  • Hiring model

Either way, the Northell team can calculate the required budget and project timeline based on your requirements and needs. Get an estimate right now!

Summary

While employing an entire team seems infeasible, programming outsourcing has more advantages. In addition to cost savings, increased efficiency, and access to professional expertise, you are contributing to delivering successful projects in the future. Hiring an outsourced team is especially valuable for startups on a low budget. This way you can start by building an MVP and get early feedback on your product idea. Win-win strategy, right?

At Northell, we can take the heavy burden of product development and design off your shoulders, ensuring the high-quality service to meet any of your goals. Just drop us a line!

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