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Outsourcing Software Development Checklist to Ensure Success


For ISVs and enterprises across the globe, having a trusted software development partner has become extremely critical in this ever evolving business landscape. It helps you to adopt new technologies quickly and also expedite your product roadmap. However, selecting the right development partner to outsource software development could be very tricky. There has to be a thoughtful planning and a structured evaluation process to help you make the right decision. Based on our past experience of working with 100+ product startups across the globe, we have put together some of the key points you should be considering while outsourcing your product development initiatives. 

Basic Preliminary Check

The following questions will help you narrow down to 2 – 4 prospective software development partners. Only after doing the initial background check, one should send out the request for proposal (RFP) to the shortlisted partners. 

  • Do they have your industry experience?
  • Have they handled or completed projects similar to yours?
  • Do they have expertise and experience on the technologies you are looking to use?
  • Do they have a good reputation? Look for reviews, testimonials and client base.
  • How many clients do they currently have?
  • Do they offer end-to-end services? What additional services do they offer? 
  • Can they add new areas of service whenever required?
  • What is the time taken to get started with a project?
  • What is their financial condition?
  • What is the size of their team?
  • How soon can they hire replacement for resources leaving a project, if any?
  • Which cities are they based in?
  • How is the availability of talent in those cities?

Once the basic background check, we need to do an in-depth assessment of the selected software development partner.

Pricing Model 

Most popular pricing models that are proposed by software development partners are:

  1. Time & Material (T&M)
  2. Fixed Bid. 

While a fixed bid may give an idea for a budget, it is wise to understand what would changing the requirements would cost in the future. Usually, the requirements undergo changes, especially when following a Scrum Agile methodology. This adds to the total cost of the project. It may also become difficult to get additional budget approvals during the development phase. T&M may work better as you can control both the budget and product outcome/delivery.

Note: It is also important to check if the development partner is ready to scale-up or scale-down the resources as per business changes.

  • What is their pricing model?
  • What is their payment schedule?
  • What is the cost of changing requirements?
  • Can resources be scaled-up or scaled-down as per business changes?

Process Management 

  •  Are they ISO/CMMi certified?
  •  What methodologies are used – e.g. Agile/DevOps/Microservices?
  •  Is the methodology flexible to suit different product/delivery requirements?
  •  Is there a process for review and feedback of work at the end of each sprint with the customer? (This check will ensure features are fit for purpose and potential issues are rapidly resolved.)

Requirements Gathering 

  • What methodology is used for requirements gathering?
  • Check if any tools are used for requirements management and what are they?
  • If no tools are used, find out what are the collaboration processes their team uses?
  • Are system reviews held with customer representatives throughout the duration of the project?
  • What is the requirement approval process followed by the vendor?

Development Process 

  • Does the external development team have the right mix of resources between Product Owner, Scrum Masters, Developers and Testers?
  • What systems and tools are used for development workflow management?
  • What tools are used for project management?
  • Does the vendor have CI/CD capabilities?
  • Are they using a version management system?
  • How are software artifacts dependencies managed?

Project Governance & Delivery

  • What are their reporting guidelines and escalation matrix for deliverable and performance?
  • What is the response time for escalation?
  • How is the time accounted for?
  • Find out how their team will log hours in the development process?
  • What is the process for milestone management?
  • What tools are used for reporting code & quality metrics, defect tracking, and management changes?
  • What are the communication methods and tools used?
  • How do they ensure transparency of communication?
  • Are appropriate dashboards in place to measure progress on work, test execution, automation, code quality, defects and other metrics throughout the project?
  • How do you ensure proper knowledge transfer when a resource leaves the project?
  • Does the vendor supply the CVs of people assigned to the project?

Quality Standards 

  •  Is there a Testing Strategy to ensure the project maintains high quality throughout its duration?
  •  Is Code written consistent with a well-defined team coding standard?
  •  Is continuous integration and testing used to find potential defects and fix them early in the development cycle?
  •  Do they use proper test environments and data to make sure that test execution is done in a near-real-world setting?
  •  What percentage of testing is automated?
  •  What tools are used for Quality Assurance operations?
  •  What Quality Assurance metrics are tracked?

Organization & Workplace Culture 

To select a good software development partner to outsource software development, also look at the general internal atmosphere in the vendor company. The check is usually done to get details such as how they treat their employees and what is the company mission and values.

  • What is the mission or vision of the organization?
  • How do their business objectives relate to what you do?
  • To what extent is the customer a priority?
  • How is the management style throughout the organization?
  • What is the current overall performance of the company?
  • Are the organization’s future plans/roadmap shared with the employees?
  • What programs do they have for personnel development?
  • What kind of employee benefits are in place?
  • What kind of rewards and recognition do they have for their employees?
  • What is the attrition rate in the organization?

Legal and Security 

Just checking the technology capability, processes, talent and quality does not give the whole picture. You also need to check the business and legal side of things. This basically means the SLAs, NDAs, SOWs and other practical aspects of the project.

  •  Are there security and confidentiality guidelines in places to protect your Intellectual property/ Source codes and other sensitive data?
  •  Who will own the code, the licenses, the hardware and other things required in the project?
  •  Does the vendor provide any warranties for intellectual property and work deliverable?

Whether you are a startup founder looking to create a development team from the bottom up, or a longtime business owner trying to find additional resources to grow your existing tech team, this checklist will assist you shortlist software outsourcing vendors effectively and enable you to make informed decisions for your business.

To learn more about our software development services, click here.

Shuvro S. Sarkar
Asst. Manager- Marketing, RapidValue



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