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Software Development Outsourcing

Steps, Cooperation Models, Roles, Costs

In IT since 1989, ScienceSoft provides full-cycle outsourced development services to help companies design and build software quickly, cost-effectively, and with minimal risks.

Outsourcing Software Development Guide - ScienceSoft
Outsourcing Software Development Guide - ScienceSoft

Software Development Outsourcing: The Essence

Outsourcing is a go-to way for businesses to develop software faster, at a lower cost, and with less effort. Software outsourcing entails the following benefits and risks:

Software development outsourcing advantages

Software development outsourcing disadvantages

ScienceSoft has been rendering end-to-end software development services for non-IT enterprises and software product companies for over 35 years. With 750+ engaged and high-performing IT experts on board, we are equipped to take over software initiatives of any complexity and support any sourcing model of our client's choice.

Software Development Outsourcing Process

The outsourcing process setup may take from several days to several months, depending on the chosen outsourcing model, the maturity of vendor processes, your readiness for such a cooperation form, and more. Below, ScienceSoft's experts list the key steps to establish a smooth outsourced engagement:

Step 1. Decide whether to outsource

A software development outsourcing initiative should start with a feasibility analysis. It can include the following activities:

  • Determining the stumbling blocks in your software development process, e.g., the lack of particular technology and management skills or the shortfall of resources to progress at a desired pace.
  • Deciding on the part(s) of your software development project to outsource. Software maintenance and testing are usually the easiest project parts to commission to a vendor, while business analysis and design are the most challenging aspects to outsource.
  • Defining the required development competencies: software engineers, architects, QA specialists, etc.
  • Comparing the total cost of ownership (TCO) and value of in-house vs. outsourced software development in the context of business priorities (quick software launch, minimized expenses, etc.).

Step 2. Choose the fitting sourcing model

A vendor provides remote professionals for you to manage directly. You can request the exact number of experts you need, from 0.5 FTE to 100+ FTE.

A vendor provides a team of talents to work on an outsourced project or its part, sharing risks and responsibility for the quality with you and/or your other vendors. Team management mostly stays on the vendor’s side; still, the vendor's Team Lead/PM regularly reports the progress to your PM.

Full process outsourcing

A vendor takes over the entire development process, with full responsibility for the team organization and management, quality of the development results, and risk mitigation.

Step 3. Select the software outsourcing company

When shortlisting potential vendors, consider the following factors:

  • Software development experience showcased by a vendor on its website, in case studies, etc.
  • Approach to collaboration described by third parties in testimonials, independent reviews, etc.
  • Location (onshore, nearshore, offshore), time zone differences.
  • Language and cultural proximity.
  • A vendor’s development infrastructure (hardware, network, bandwidth, etc.).
  • The maturity of project management, quality management, and security management processes (e.g., proved by ISO 9001 and ISO 27001 certificates).
  • Compliance with industry standards and regulations you need to follow (HIPAA, FDA, PCI DSS, etc.).
  • Pricing options offered (fixed price, T&M).
  • Software maintenance and support options available.

Step 4. Set up and legally fix the outsourcing process

Team augmentation

  • Send a request to the selected vendor with the detailed skill set and FTEs required.
  • Get CVs and rates of the available staff.
  • Schedule interviews with potential candidates.
  • (optionally) Arrange the candidate test tasks.
  • Negotiate an SLA, including penalties for security breaches.
  • Sign the contract.

Dedicated team

  • Send a request to the selected vendor and get the proposal on service options, development approaches, team composition, and more.
  • Receive the vendor’s estimation of the project scope and the efforts required to implement it.
  • Together with the vendor, decide on the KPIs to evaluate the quality of deliverables and the performance of the outsourced team.
  • Negotiate an SLA, including penalties for security breaches.
  • Sign the contract.

Full process outsourcing

  • Send a request to the chosen vendor and receive the proposal with service options, collaboration forms, ballpark estimates for a suggested technical solution (if any), etc.
  • Expect the vendor to:
    • Analyze your software development needs and current development processes (if any).
    • Scope the project, prepare a WBS, and suggest the team composition.
    • Provide a detailed service delivery plan.
  • Negotiate the cooperation success measures and an SLA.
  • Sign the contract.

Step 5. Transfer knowledge and establish a control framework

  • Organize knowledge transfer to the outsourced team/specialists.
  • Provide the involved talents with access to the project infrastructure.
  • Decide on the vendor communication frequency and channels.
  • Establish progress reporting forms and schedules.

Specifics of Software Development Outsourcing Models

Staff augmentation

Dedicated team

Full process outsourcing

Maximized cost savings

Pros

  • Easy resource scaling up and down to adapt to changing project needs.
  • Quick access to specific skills.
  • Direct supervision over the development process and team productivity.
  • 1–2 weeks for onboarding (if the required resources are readily available in the vendor’s pool).

  • 1–2 days to start (if the team is pre-assembled by a vendor and the team structure just needs to be reasonably adjusted to your project needs).
  • A vendor provides a Team Lead/PM to coordinate the work of the outsourced team so that they need little/no guidance from your side.

  • Minimum management efforts on your side.
  • Guaranteed quality of project deliverables and timeline alignment (with penalties for breaching them).
  • Access to a vendor’s established development processes.
  • Tackling project-related risks is on a vendor’s side.
Cons

  • Full responsibility for project-related risks is on your side.
  • Onboarding and managing efforts are on your side.
  • High risk of communication gaps and collaboration difficulties.

  • Risks related to vendor selection.
  • Project team coordination and project risk management can be still partially on your side.
  • People may underperform during the first 2-4 weeks until the newly gathered group turns into a real team.

  • The longest setup (up to a month).
  • High vendor risks.

ScienceSoft’s Software Outsourcing Services

Staff augmentation

  • Developers, architects, testers and test automation engineers, DevOps engineers, integration architects, data scientists, support engineers, cybersecurity experts, etc.
  • Flexible cooperation terms: 1 month – 10 years.
  • The exact number of qualified professionals you need (from 0.5 FTE to 150+ FTE).
I need this!

Dedicated teams

  • Fast ramp-up of the outsourced team (2 workdays – 2 weeks).
  • Experienced PMs and Team Leads to manage distributed teams.
  • Full assistance in establishing a collaboration environment and project progress control.
  • Strict compliance with agreed quality KPIs.
  • Easy team scale up or down.
I need this!

Full process outsourcing

  • Full-scale Project Management Office.
  • Defining the business and software development goals you want to achieve and taking the overall responsibility for the ‘how-to’ part.
  • Tailored communication with each stakeholder.
  • Continuous granular monitoring of project progress, regular reporting.
I need this!

Why Outsource Software Development to ScienceSoft

  • Since 1989 in IT and 750+ professionals on board.
  • 7–20 years is average experience of our PMs, BAs, solution architects, developers, data analysts, and other IT professionals.
  • Over 4,000 success stories across more than 30 industries.
  • End-to-end software development – we envision, plan, design, develop, integrate, deploy, and support software solutions.
  • In-house project management office (PMO) – our PMs are experienced in large complex projects with distributed teams and multiple vendors involved.
  • Services built around strict agreed KPIs – business outcomes, quality of delivered software, code quality, development process efficiency, project time and costs (actual costs vs budget, budget to completion vs budget remaining, etc.), team’s productivity, and customer/user satisfaction.

What makes ScienceSoft different

We achieve project success no matter what

ScienceSoft does not pass mere project administration off as project management, a practice that's unfortunately common in the market. We drive projects to their goals, mitigating risks and overcoming constraints.

See how we deliver results

Our Clients Say

ScienceSoft proved to be a professional service provider from the outset. We appreciate their proactive approach and ability to suggest improvements to a prospective solution on both architectural and business levels. We know we can always rely on ScienceSoft’s various competencies when our clients require quality software which would facilitate their business success.

Star Star Star Star Star

With ScienceSoft, we've been able to reduce our development costs and decrease the timeline on new features and updates. ScienceSoft's attention to detail in how everything is documented and communicated is by far the best of any agency that I've worked with.

ScienceSoft is a professional and dedicated mobile app development company. Over the past 10 years we've worked on about ten mobile app development projects with them. Their developers performed really well and have rescued us when we were late on delivery. We would certainly recommend ScienceSoft as a highly skilled and reliable service provider.

Benefits of Software Development with ScienceSoft

Flexible cooperation

Our engagements may last from 1 month to 10 years. Our teams can include the exact number of qualified professionals you need (from 0.5 FTE to 150+ FTE) and can be easily scaled up and down on demand.

Industry expertise

Our industry-focused consultants (healthcare, BFSI, manufacturing, retail, and 25+ more) help bridge business and technology in the most efficient way and according to the relevant regulatory frameworks.

1.5–2x faster development

due to domain proficiency, multi-industry expertise, mature coding and time management practices of our talents.

20–50%+ project cost reduction

due to eliminated in-house staff hiring and training expenses and ScienceSoft's expert advice on the project cost optimization opportunities.

Have a Complex Development Project with a Tight Deadline?

ScienceSoft will help deliver it on the intended goal, quality, timelines, and budget.

Software Development Outsourcing: Typical Roles on Your and Our Sides

Staff augmentation (usually developers)

Dedicated team

Full process outsourcing

On the vendor’s side
  • One/several software engineers.
  • Developers.
  • DevOps engineers.
  • Team Lead/Project manager.
  • Project manager.
  • BA.
  • UX/UI designers.
  • Developers with a Team Lead.
  • Testers.
  • DevOps engineers.
  • Support engineers.
On your side
  • Project manager.
  • BA.
  • UX/UI designers.
  • Developers with a Team Lead.
  • Testers.
  • DevOps engineers.
  • Support engineers.
  • Project manager (for the vendor’s PM/Team Lead to report to).
  • Developers (optional).
  • DevOps engineers (optional).
  • Support engineers.
  • IT manager.
Shared or on both sides
  • BA.
  • UX/UI designers.
  • Testers.

Software Development Outsourcing Costs

The software development outsourcing cost is defined by the major following factors:

  • Hourly rates for outsourced resources. The prices may vary significantly depending on the outsourcing region.
  • The actual efforts and performance of an outsourced team.
  • The vendor’s QA process specifics (proactive testing lowers QA costs while fixing bugs in production makes QA more expensive).
  • (for full process outsourcing) The maturity of the vendor’s outsourcing processes – mature project management and well-established development processes help avoid rework.
  • The need to transition to another outsourcing vendor (it is quite costly).

How Much Will It Cost to Develop Your Software Solution?

Please answer a few questions about your software development needs using our cost calculator. This will help our team provide a tailored service offering and a software development cost estimation much quicker.

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*What is your industry?

*What kind of healthcare software do you want to develop?

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In case there are multiple applicable options, please select the main solution type that best aligns with the primary aim of your software.

*What EHR/EMR functionality do you want to implement?

*What telehealth or RPM functionality do you need?

*What features do you need in a patient portal or app?

*What features do you need in administrative software?

*What healthcare data analytics functionality do you want to include?

*What diagnostic functionality do you need?

*What clinical trial functionality do you need?

*What functionality should your medical AR or VR solution have?

*What functionality do you need in your desktop medical device software?

*What functionality do you need in your user software for wearables?

*What kind of banking software do you want to build?

*What features should your mobile banking app provide? Select all that apply.

What platforms do you plan to target?

What development option are you interested in?

If you have a web app, do you plan to integrate your future mobile app with its back end?

*Do you already have finalized UX and/or UI samples?

*What features should your internet banking app provide? Select all that apply.

*What functional modules should your treasury software provide? Select all that apply.

*What capabilities should your deposit management solution provide? Select all that apply.

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*What capabilities should your CRM support? Select all that apply.

What implementation strategy do you prefer?

If applicable, what CRM platform(s) do you consider?

*What features do you need in your banking intranet? Select all that apply.

*What document management features do you need? Select all that apply.

*What functional modules should your accounting software provide? Select all that apply.

*What accounting processes should your software automate?

*What capabilities should your compliance solution provide? Select all that apply.

*What type(s) of banking security solution do you need?

*What type of banking analytics should your solution provide? Select all that apply.

*How promptly should changes in source data be reflected in your analytics solution?

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If you have different latency requirements for different data types, feel free to check several boxes.

*What capabilities should your AI assistant provide? Select all that apply.

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If you have different latency requirements for different data types, feel free to check several boxes.

*What blockchain solution(s) do you want to develop?

*What type(s) of insurance should your solution support?

*Should your solution support alternative insurance models?

*What type(s) of business insurance should your solution support?

*What type(s) of specialty insurance should your solution support?

*What capabilities should your insurance software provide?

*What type of investment solution do you need?

*What functional modules should your portfolio solution include?

*What capabilities should your investment research solution provide?

*What capabilities should your investor relationship management solution provide?

*What capabilities should your investment accounting solution provide?

*What capabilities should your investor reporting solution provide?

*What document management features do you need? Select all that apply.

*What capabilities should your compliance solution provide? Select all that apply.

*What capabilities should your compliance solution provide? Select all that apply.

*What features should your investor portal provide? Select all that apply.

*What capabilities should your investment app provide? Select all that apply.

*What capabilities should your investment platform provide? Select all that apply.

*What capabilities should your trading platform provide? Select all that apply.

*What capabilities should your robo-advisory solution provide?

*What type of investment analytics should your solution provide?

*How promptly should changes in source data be reflected in your solution?

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If you have different latency requirements for different data types, feel free to check several boxes.

*What capabilities should your AI assistant provide? Select all that apply.

*What blockchain solution(s) do you want to develop?

*What capabilities should your payment software provide?

*What types of manufacturing software do you need? (Select all that apply)

*What capabilities should your MRP software provide?

*What capabilities should your production scheduling software provide? Select all that apply.

*What capabilities should your MES provide? Select all that apply.

*What capabilities should your PLM software provide? Select all that apply.

*What capabilities should your machine management software provide? Select all that apply.

*What capabilities should your equipment management software provide? Select all that apply.

*What manufacturing machines should your HMI connect to?

*What capabilities should your solution provide? Select all that apply.

*What capabilities should your supply chain management software provide? Select all that apply.

*What capabilities should your solution provide? Select all that apply.

*What capabilities should your asset management solution provide?

*What type of software do you want to develop?

*What capabilities should your order management software provide?

*How many orders do you plan to process monthly?

*What capabilities should your inventory software provide? 

*What method of inventory counting should your solution support?

*What functional modules should your vendor management system provide?

*What capabilities should your warehouse management system provide?

*What functional modules do you need in your transportation management system?

*What financial processes should your software cover?

*What functionality do you need in your intranet?

*What document management functionality do you need?

*What document types must your DMS support?

*What functional modules do you need in your HR system?

*What capabilities should your CRM support?

*What kind of BI do you need to cover?

*Please specify the data sources for your analytics solution:

*What kind of ecommerce solution do you have/plan to have?

*Do you expect expertise in a particular ecommerce platform?

Are you planning to implement advanced technologies?

*What functionality do you need in a marketing solution?

*What marketing channels do you want to use?

*What type of kiosk do you need?

*What kiosk features do you need?

*Does your kiosk need integrations with peripheral devices?

*What payment method(s) should your solution support?

*Which components should your in-store security system consist of?

*What features do you need in your price optimization software?

*What is your specialization?

*What type(s) of software are you planning to develop?

*What kind of software do you need to build?

*What enterprise software do you need to develop?

Do you need to implement data analytics?

*What telecommunication app do you need to develop?

*Please select the type of software you need assistance with.

*What production operations should your software support? Choose all that apply.

*Would you like to leverage Industry 4.0 techs?

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*What functional modules should your corporate financial software provide? Choose all that apply.

*What functional SCM modules do you need? Choose all that apply.

*What kind of analytics do you need to cover? Choose all that apply.

Please specify the data sources for your software solution.

*Should your solution offer complex analytics?

*What asset management capabilities should your solution provide? Choose all that apply.

*What fleet management capabilities should your solution provide? Choose all that apply.

*What HR management modules do you need in your software? Choose all that apply.

*What learning management capabilities do you need? Choose all that apply.

*What learning content types should your software support?

*What document management capabilities should your software provide? Choose all that apply.

*What capabilities should your software support? Choose all that apply.

*What type of a client self-service solution would you like to build?

*What types of products are you planning to sell online?

*How many SKUs are you planning to sell?

*Along with core ecommerce functions (e.g., catalog, customer and order management), what capabilities should your ecommerce solution support?

*What content management capabilities should your software provide? Choose all that apply.

*What employee collaboration capabilities should your solution provide? Choose all that apply.

*What capabilities should your payment software provide?

*What enterprise automation processes should your software support? Choose all that apply.

*What type(s) of loans should your lending solution support? Select all that apply.

*What capabilities should your lending software provide? Select all that apply.

*What transportation & logistics area should your future solution serve?

*What capabilities should your order management solution provide? Select all that apply.

*What capabilities should your transportation management solution provide? Select all that apply.

*What capabilities should your warehouse management solution provide? Select all that apply.

*What capabilities should your fleet management solution provide? Select all that apply.

*What type of fleet do your T&L operations involve?

*What capabilities should your labor management solution provide? Select all that apply.

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*What capabilities should your vendor management solution provide? Select all that apply.

*What capabilities should your financial management solution provide? Select all that apply.

*What type of T&L analytics should your solution provide?

*Which software version do you need?

*Which app type(s) do you need?

*How do you plan to use your software?

*What is the expected number of software users?

Are you going to sell your software to:

*How many individuals will use your software, approximately?

*How many organizations are you planning to target, approximately?

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How many organizations are you planning to target, approximately?

*How many end users (both corporate and individual users) will use your software, approximately?

*Do you have any preferences for the environment?

Would you require any integrations?

Do you have tech stack preferences?

Are there any compliance standards the software must meet? Please check all that apply.

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About ScienceSoft

ScienceSoft is a global IT consulting and software development company headquartered in McKinney, Texas, with offices in the EU and the Gulf. Since 1989, we provide full-cycle software development services for non-IT and IT companies. We guarantee smooth and efficient collaboration, rely on an ISO 9001-certified quality management and an ISO 27001-certified security management, and deliver software compliant with HIPAA, GAMP, FDA, PCI DSS, SOC, GDPR, and more.