The complete guide to outsourcing your next software project

In-house software development is beyond the reach of most small businesses that need something doing on-time, glitch free and within budget. Outsourcing gives SMEs access to top talent when they need it

IT and software experts command high salaries in today’s competitive market, so only the largest companies can justify the cost of having permanent employees in this field.

Most people are not qualified to develop software at scale for their business, so outsourcing is the last remaining option to get your project completed on-time and without glitches. Outsourcing gives small and medium-sized organisations access to top talent when they need it, and at a lower cost than having a team of software developers on the payroll.

>See also: Five outsourcing trends for small businesses in 2019

Nearshoring vs. offshoring

According to the e-book, Your Essential Guide to Working With IT Companies, published by Euro IT powerhouse SoftwareHut; salaries outside the USA, UK, Australia, and Western Europe are much lower because of cheaper living costs. This salary difference is where most of the cost savings on outsourcing your software development project will come from.


You will find willing partners in every country you can name, so you need to make an early decision as to how far offshore will work best. Pay expectations will be lower the further from the USA and Western Europe you go.

However, lower costs are not everything because you have to factor in communication difficulties caused by language and cultural differences, as well as working in different time-zones.


Looking for partners in neighboring countries will ease communication problems, but costs might be higher. You might look to Hungary and Poland if you are UK based, or to Canada or Mexico if you are in the United States. There will still be some culture and language differences.

Try in-country nearshoring for a better communication experience. In the USA, some mainly rural states have lower living costs and wages than others. In the UK, Scotland and Wales (away from the big cities) stand out as cheaper. In-country near-shoring gives you the best of both worlds, lower costs and fewer communication issues.

>See also: The pros and cons of outsourcing for small businesses

Setting your project parameters

A successful project requires parameters which are concrete. Once set, they cannot be changed without tearing up the project and starting afresh.

  • Set the project’s budget
  • Set measurable goals you will use to measure the success of your project
  • Set a realistic timescale, bearing in mind that short development times mean lower quality work and higher costs because your partner has to set aside other work
  • Set the project’s scope and don’t allow it to expand beyond that. If the budget won’t stretch, then cut the scope of your project until it is comfortably within budget.

Finding a software house partner

The future of your business depends on the success of your software project, so finding the right partner is crucial.

  • The right partner won’t be the cheapest, because companies give lower quotes by cutting expenditure on testing, which will lead to endless problems once your product goes live.
  • The right partner will be able to communicate well in your language. The company could be in China as long as the people you deal with have near-perfect English and an excellent grasp of your culture.
  • The right partner software house will have good reviews on Clutch

Opening communication channels

Once you have a partner in mind, it’s time to start talking.

Use a video channel to minimise communication issues: Facial and body language signals are the best clues to misunderstandings and possible confusion. Negotiate a chat time that works for both parties, especially if you are thousands of miles apart and in widely differing time-zones.

Expect a different accent, but both parties must be able to understand one another. Ask questions about the projects the software house has recently completed. Ask questions about who your contact would be. Ask questions about timescale.

Discuss your business vision and how the project fits into it. Discuss the parameters and scope of the project and allow your prospective partner time to develop a costed proposal. Discuss milestone dates and payments.

Expect questions about your company because a little understanding goes a long way.

Ask to speak to previous clients about how their projects turned out and expect your prospective partner to ask you for similar referrals.

The short version

  • Communication is the key to successfully outsourcing your project
  • Have reasonable expectations of costs and timescales
  • Email is very limited as a communication medium. It can be useful for the initial contact but move discussions to video chat as soon as possible
  • Communication issues including; time-zones, culture and language differences, are the most important disadvantages to using offshore software developers
  • You can overcome these issues with the right partner, but if it isn’t happening, you need to look elsewhere for a new partner

Further reading on outsourcing

The opportunities and risks of outsourcing for small businesses