Insights into Outsourcing Product Development



In the ever-changing IT industry, many are aware of the significance of outsourcing product development (OPD) or outsourcing projects which entail hiring a third party provider for the development of products and services, majorly related to IT such as SaaS (Software as a Service), Internet Business, Independent Software Vendor (ISV) Product Development. OPD reserves a special significance for entrepreneurs, with new ideas who wish to develop a product as envisioned but do not possess the required skills. Consequently, they have to outsource Application/Product Development to a third party such as mobile app developers, which may involve offshore outsourcing at times.

This blog addresses some points for entrepreneurs to consider in OPD and provides insights regarding OPD to better enable businesses and support their endeavors.

1. Examine and Scrutinize the Development Companies

In several cases, idea generators are not technical and it is a common phenomenon. We know what Jobs (the idea generator) and Wozniak (the technologist) achieved and their splendid contribution to the IT industry. It may be the case that you have an idea but to bring it into existence you have to hire expert help. There can be ambiguity if you don’t do your homework. Always remember to do a thorough background check about the company/freelancer, check their success record, contact previous clients, if needed, to determine their credibility. As the first step, you should research and collect names of different companies, then short-list the relevant companies and finally, select the one which matches your requirement.

2. Demand Transparency and Ensure Maximum Involvement

Do not hire opaque companies. As a client, it’s your legitimate prerogative to ask for transparency throughout the product development lifecycle. Whether you have to deal with the project manager of a company or freelancers, stipulate and ensure absolute transparency before signing the agreement for software development outsourcing. Secondly, ensure maximum involvement even if you’re not the technical person. This is crucial in order to ensure that the desirable product is delivered in the end. You need to hire a developer who is client-oriented and values customer feedback.

3. Ensure Legal Compliance and Proper Documentation

This is something many new entrepreneurs and business owners frequently overlook and consequently pay the price if a deal goes sour in the end. You have to ensure proper and relevant legal documentation and also, hire a lawyer to draft and/or review the agreement. One needs to check that every major stipulation is explicitly stated in the agreement. It is absolutely necessary to go the legal way and protect your interest and intellectual property.

4. Rely on Product Blueprint and Illustrations to Guide your Developer

This is an important step in the product development strategy that should be considered if you want the end product as per your expectations. Your product design and development largely depends on how efficiently you’re able to delineate your requirements to the developer. You need to develop illustrations and designs to communicate what you want your product to do and look like. Before handing out the project, you must establish a blueprint including a proper sitemap, designs, and figures to portray a picture of your desired product.

5.  Assign Task Wisely

The market is flooded with many freelancers and experts. Therefore, you need to choose the software vendor, wisely. You can find a developer, freelancer or a company with excellent track record and choose multiple vendors (for example, UX design, Development, testing) as per the different modules of the product. Always be alert to the contingency of something going the wrong way. If you are building a technology product, look for companies who have the expertise working in emerging technologies.


Outsourcing Product Development (OPD) has become much significant as it bestows its own benefits. Many big, medium and small sized IT businesses hire resources from other companies and agencies for various reasons. The desired end result would obviously be to improve business and yield successful results. OPD helps in decreasing the cost of labor and time to market, facilitating commencement of new projects, promoting more effectiveness and reducing the risks involved in the business. This helps organizations/enterprises to focus and enhance ability on core activities and more top prioritized tasks that are lined up. If done right, outsourcing can bring in a great outcome to your business.


Wasim Iqbal

Business Development Associate, RapidValue



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