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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 34 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!

Explore ScienceSoft's Featured Success Stories

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 3,600 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.

Our Customers Say

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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. This will help our team provide a tailored service offering and a cost estimate much quicker.

*What is your industry?

*What type of company do you represent?

*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?

*How many end users (individuals from all organizations) will use your software, approximately?

How many organizations are you planning to target, approximately?

*How many end users (individuals from all organizations and outside organizations) will use your software, approximately?

*What software type do you need to develop?

*What functionality do you want to implement in your telehealth app?

Should your telehealth app be tailored to a medical specialty?

*Choose the type of web portal you need:

*What user features should your portal support?

*What admin features should your portal support?

*What functional modules do you need with your financial software? Check all that apply.

*What operations do you need to support with your software?

*What capabilities should your software support?

*What medical specialties is your EHR intended for?

*What are the core EHR features you need? Check all that apply:

*What types of products are you planning to sell?

*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 capabilities should your OMS provide?

*What capabilities should your payment software provide?

*What document management capabilities should your software provide?

*What capabilities should your CMS provide?

*What capabilities should your intranet provide?

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

*What LMS capabilities do you need?

*What is your target software type?

*What content types should your LMS support?

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

*What capabilities should your inventory software provide? Check all that apply.

*What capabilities should your asset management solution provide?

*What capabilities should your fleet management solution provide?

*What kind of analytics do you need to cover?

*Please specify the data sources for your data analytics solution.

*Should your solution offer complex analytics?

*What capabilities should your on-demand service marketplace provide?

*What type of a ride-hailing app do you need?

*What type of a social networking app do you need?

Will your dating focus on a specific niche (people with specific interests, lifestyles, or demographics)?

*Which software version do you need?

*Which app type do you need?

*Should your software interact with physical devices?

?

With tracking devices, manufacturing equipment, counting equipment, AR&VR devices, business phone systems, etc.

*Would you require any integrations?

Do you need to migrate data from legacy software?

*Are there any compliance standards for your planned app? Check all that apply.

Do you have any preferences for the environment?

*Do you have tech stack preferences?

*Do you have a deadline for your project?

Almost done!

Please let us know where we should send your estimate. Our experts may need to ask a few extra questions to calculate a precise quote for your case.

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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.