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Outsourcing Company: What New Startups Must Know

More and more startups choose outsourcing as an economical and effective solution. However, not so that choosing outsourcing is an easy job. This article provides basic insights before working with outsourcing partners.
By Serena Dao | EnvZone Staff
on July 02, 2019 | 6 min read
Image Credit: RBS

In the competitive world of startups, the outsourcing companies play a role that helps founders focus on core business activities without being distracted by issues in product development. At a stage lacking funds and staff, outsourcing becomes a potential solution for a startup to save money and time. It's easy to say, but not everyone can turn outsourcing into a powerful tool. That’s why, to succeed in outsourcing, you have to know the basics below.

1. How To Evaluate the Outsourcing Company/ Developer

There are various factors that should be considered when choosing a good outsourced software development partner. These are some of them:

Experience - The partner should have full experience in the field you want to develop. When some problems occur, they are able to suggest you find out what to do, what decisions have to make.

Cost - The cost should be suitable for your budget and has a clear extra fee frame. You have to understand the pricing structure and what you should get after spending.

Delivery models - make sure that the outsourcing company provides offsite, onsite or hybrid models will suit your needs the most for the short-term and be okay to change to accommodate your new needs: long-term support, upgrade, maintenance, etc.

Skills and training - the training and skills provided by the partner must be up to date

Communication - focus on communication processes. Do they give access to appropriate team members who you need to communicate? What channel do they usually use? Is the team available 24/7?

Processes, quality and testing - does the partner have appropriate quality processes, testing procedures, certification and security and privacy knowledge to support industry and government regulation and satisfy standard development life cycle management?

2. The Benefit of Outsourcing

For a startup, to make a product at a minimum cost and short term of time but still have a big possibility to stay in the market, outsourcing is often used.

Besides the direct benefit of cost- and time-saving, there are also other advantages when choosing an outsourcing solution:

Access to deep knowledge and experience

You can come to an outsourcing company with only a product idea then you will get a full package from consulting to development.  Besides, there are various services such as market research, user interviews, competitor evaluation.

Depending on your type of product, budget, specifics, you can request a minimum viable product (MVP) to actualize your and make changes if something turns wrong. The software development experts will help you design the most optimal MVP and then interpret the analytical data it yields.

To make the most optimal project plan, everything from project planning, UX/UI design, cost estimation, etc., should be done by the outsourcing company. But it doesn’t mean you have to leave everything to the outsourcing developers, in fact, you can outsource the service that you do not specialize on only, for example, the software development requiring deep knowledge and skill that you don’t have enough resource should be outsourced while you can do your marketing because you know your product insight the best, and that’s all you have to focus on.

Access to great talents worldwide

When coming to the outsourcing decision, you have to know that there is no limitation of geographical location, the decisive factors should be the level of developer’s skill and professionalism. Outsourcing will help you take advantage of the talent resource but at a lower cost.

However, there are differences in culture and working process that will cause difficulties in communication and workflow.

Easy scalability

During the development process, the scale of development may widen or narrow. For in-house development, it is quite difficult to add or cut team members because they are only suitable for a specific assignment, and we still have to pay reduced people to keep them stay for future projects.

With an outsourcing company, there is enough staff to support the project, with special skills in various fields. Besides, reducing the team is no longer a problem because of the flexibility in project changing.

No need of micromanagement

The project you assigned will be under the responsibility of the outsourcing company. The project manager (PM) will be your main contact if any problems occur.

You will have an appointment with the PM from the start to discuss the development process, powers, and responsibilities. The PM will control the workflow of product development, makes sure everything is on the way. You can always address the PM about changes, suggestions, comments, complaints, and the PM will take care of them.

Thus, you can have more time to focus on the other important jobs, such as product marketing strategy, company management.

3. How to Get Started with Offshore Software Development

Something you have to do first is doing a lot of deep research including:

  • The development company’s information: Their work experience, technology, developed APP. Be selective, if you find anything in their work that doesn’t make you feel good about, or some details of their APP that don’t suit you, just pick another team. There are a lot of software development teams out there that fit your demand better.
  • The development process: Knowing the basics is something you must have when working in this area: how the development process happens, what kind of developers involved, what programming languages and platforms are used, etc. The Internet has almost everything!
  • How to have a reliable channel of communication for your future team and yourself: The biggest disadvantage of offshore development is communicating and aligning with the team so the better you repair, the smoother the development process.

4. Outsourcing on Freelancer, Upwork, Elance, What Should Be Known about It?

Outsourcing Company: What New Startups Must Know Featured Image
Courtesy: Upwork

These websites are known as the most popular place to hire freelancers. But when you come to the decision, please know that there are some problems you might face:

  • The honesty: The skills that have been shown on these sites may not be 100% truthful. Take a look at the comments of their previous customers.
  • The inconsistency: The freelancer who promises to outsource for you may turn to someone else, (who gives more benefits, I guess).
  • They don’t have to work for you only: They may be working with 3 companies at the same time.
  • Ineffective communication: Exchange information online may cause miscommunication between people who have difference in culture, personal expectations, language, etc.
  • Reliability: The Internet is often unreliable in some countries which may cause ineffective communication above.

Actually, for a limited budget project, these sites are still worth to try. Just make sure to check the feedback, portfolio carefully and request an interview before making the decision.

5. Intellectual Property Rights When Working with Outsourcing Company

These things should be followed while outsourcing software development to protect your company’s secret:

  • Sign a proprietary information agreement (PIA) including intellectual property and non-competition clauses between stakeholders. Ensure PIA still last until the expired day of the contract.
  • Make sure that you own the server and the outsourcing developers are given the user access.
  • Use a code repository from sites such as Github, Gitlab, Apache Allura, etc. for the developers. You can track the changes made to the code while the project is being developed. The code just can be deleted permanently by you, the owner.
  • Check the progress of the development team daily and internal communication through the Project management tool.
  • Choose a reliable company that values and respects the customer. Some details that can reveal the company’s characteristics are previous customer’s feedback, track record, the way in response to customers, etc.
  • Consult with internet security experts or search the internet to follow a checklist about SSL certificate, username-password encryption, security method, etc.

The Bottom Line

For startups, outsourcing remains one of the best methods to maintain or grow the business. However, besides choosing the right outsourcing company, you also have to look at yourself, make sure that you are confident to share the responsibility to the stakeholders, someone who decides part of your business success.

So, are you ready to hand over your work to someone else?

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