The Ultimate Checklist for Software Development Outsourcing | Part 5

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Digital disruption shows no signs of slowing down. As we discussed in previous articles, the key to remaining relevant is innovation, speed, and agility. The best strategy to achieve this is outsourcing. In this last article in our series, we give you a checklist to help you move forward in planning your software development outsourcing strategy.

Evaluate How Emerging Technology Is Impacting Your Industry

The emergence of technology such as Artificial Intelligence (AI), cloud computing, and data analytics have impacted every industry. Determine what new technologies your competitors are using. Doing so helps you determine a strategy for remaining competitive. You can do this by performing a competitor product analysis.

A competitor product analysis helps you stay ahead of the game by providing an overview of how your products or services fare against those offered by your competitors. It examines the features, benefits, and pricing of your products in relation to those of your competitors, allowing you to determine how well you stack up against them. Here are a few questions you’ll want to answer to determine how to move forward.

What Do Customers Want? 

Are you clear on what your customers want? If so, are you confident your product meets those needs? If not, you’ll lose them to competitors who are more in tune with what they want. To determine your customers' wants and needs, it's helpful to review your customer data to learn current and historic customer behaviors. Data analysis tools such as Microsoft PowerBL,  Tableau, or SAS offer insights unavailable otherwise.

Using the data you find, you can perform analyses such as:

• Predictive Analysis: This type of analysis uses current and historical data to predict future events. Information discovered using predictive analysis is useful in determining what customers may want to purchase based on past purchases. For example, predictive analytics can help you decide whether or not to segment your audience based on their behavior, demographics, firmographics, interests, or any other variable. By experimenting with different cluster models, you'll be able to find patterns that you may not have expected and arrive at audience segments that make the most sense for your business.
• Prescriptive Analysis: This form of analysis provides recommendations on next steps. Prescriptive analysis can identify a trending product and recommend a marketing campaign for the company to implement. Leveraging this information helps companies make more informed data-backed decisions.

If you don’t have access to this information, your first step is to develop a data strategy to collect information. This is something a qualified software development outsourcing provider can assist with. 

Can We Keep Up with Customer Demand as Their Needs Change?

Evaluate your current development processes. Are they flexible enough to enable you to respond quickly to customer demand? If not, what types of changes are needed? Next, determine if you have the time and resources to make those changes to your process.

How Can We Use This New Technology to Innovate?

Can you identify ways you could leverage newer technology to improve your product? This step requires a high-level understanding of newer technology. It also requires you to have a deep understanding of your business objectives to help you determine how to apply the technology to meet your goals.

Determine Current and Future Staffing Requirements

Having the right resources on your team is critical to success. As we mentioned in a previous article, you’ll need team members with expertise in emerging technology. Consider these items:

What New Skills Will We Need to Innovate?

Based on your answers in the section above, what skills do you need so you can meet your technology objectives? If your objectives involve traditional technologies, focus your hiring efforts on full-stack developers well-versed in common technologies, such as C# and JavaScript frameworks and microservices. 

If your goal is to implement advanced technologies, your existing staff may not be well-versed in those areas. In that case, you should focus on hiring specialists from disciplines lacking in your current staff. For example, Artificial Intelligence requires someone knowledgeable in statistics and data modeling to write AI algorithms. 

Do We Have the Resources to Recruit Top Talent? 

Recruiting software developers has many challenges you must consider. The most notable is the developer shortage. This means you’ll have a hard time staffing which could delay your projects. Your competitors will surpass you and gain market share the longer you delay. 

The first consideration is time. How much time can your company devote to hiring? It takes time to research, interview, hire and train someone. Hired's 2022 State of Software Engineers report indicated that it takes 30-39 days to hire developers.

Depending on the number of candidates, the process could take weeks or months. When you need to get a project off the ground quickly, time is of the essence.

Next, consider your budget. Competition for top talent is stiff. Many candidates expect high salaries, bonus packages, and flexible work arrangements, just to name a few. The Bureau of Labor Statistics (BLS) reports the average salary of a developer in 2021 was $ 120,990.

Next, include the additional expenses associated with hiring a new employee. The Society for Human Resource Management (SHRM) reports companies spend an average of $4,600 per hire. This takes into account additional expenses, such as advertising the open position and time spent interviewing candidates. Make sure your budget can accommodate what you’ll need to spend to attract top talent.

Determine if Outsourcing Is Right for Your Business

At this stage, you will need to consider if outsourcing is the best approach for your business strategy. The questions below can help you decide.

What is Our Turnaround Time on Product Releases?

You may need to look at how often your competitors release new features. This information will help determine your ideal timeframe. Is your team prepared to deliver in this timeframe? Can your team sustain rapid release cycles? If not, consider how software development outsourcing helps you achieve these goals.

How Quickly Do We Need to Scale?

The answer to this question depends on many factors. Product growth dictates what new features or products to release. As you grow, you may need to add additional resources to meet deadlines. You want to be sure you can scale quickly without negatively impacting your business. Working with an external provider offers greater flexibility and scalability. You can add or remove resources at any time without additional overhead.

Are We Prepared to Mitigate the Risks Associated with Implementing Newer Technology?

Innovation through emerging technology comes with risks. Lack of expertise impacts delivery timeframes. It also impacts product quality. Without the right resources on the team, you may face obstacles the team doesn’t know how to handle. Trusting development to an external provider gives you access to experts to implement the latest technology. They have the experience to identify roadblocks, mitigate risks and ensure positive project outcomes. 

How Much Money Will We Save If We Outsource?

Outsourcing software engineering allows for operational efficiency that saves you money. A good way to determine if outsourcing will be beneficial is to calculate an anticipated ROI. This metric is calculated before the project begins. Anticipated ROI uses estimated costs and estimated revenue. 

Preparing for an Outsourcing Partnership

Before you hire an external provider, you need to be prepared. Communicating your needs clearly to the provider requires preparation. Preparation includes outlining what you require in a provider and the steps you'll take select the partner best suited to your organization.

Some things to consider include:

Are We Clear on Goals and Objectives?

Your objectives and goals establish the foundation for your requirements. Evaluate your company roadmap to make sure the team understands the corporate direction. That way you ensure the requirements and all future decisions lead to accomplishing those goals.

Do We Have Documented Requirements?

Your requirements should outline the scope of the project, delivery timeframes, and quality criteria. Well-documented requirements eliminate confusion and ensure everyone understands expectations. Requirements are also a benchmark to measure progress.

Which Project Model Works Best For us?

The project model you chose depends on time, project complexity and your budget. Select a model that gives you the right balance between each to help you see maximum benefit. Choose a project-based approach if you want the vendor to assume full responsibility for all aspects of the project. Opt for a dedicated team if you want more control over managing there sources. A staff augmentation strategy works best for ad hoc scaling of your project team.

Do We Know What Criteria We’re Using to Evaluate Providers?

Document the criteria you will use to evaluate external providers. Taking time to do this helps you select the best partner to meet our needs. Your outsourcing partner should have a strong pool of engineers who can quickly recruit and assemble a team for your project. Security, privacy, and compliance are crucial to business success. Ask the provider about the steps they take to ensure the product protects sensitive data. Also, ask about their process for ensuring the product meets regulatory requirements for your industry. Ensure the partner you select has advanced knowledge of the technology you require. Hiring experts is invaluable for avoiding pitfalls, unlocking opportunities, and creating quality products. 

Key Takeaways

Software development outsourcing is a competitive advantage in a digital-first landscape. However, many organizations struggle with finding the right talent to help them take advantage of emerging technology. Outsourcing is a strategy that enables the speed, agility and innovation required to compete in today’s economy. With this approach, you transfer software engineering to an external team. That way you always have access to a large pool of resources ready to help you leverage any new technology. Are you ready to get started with outsourcing? Reach out to us to discuss your needs. Our experts will work to understand your business and tailor a solution that meets your needs.

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