Published on February 24, 2014
How to Choose a Reliable Software Development Outsourcing Company? A Practical Guide Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
A Practical Guide • Why outsource software projects? • How to choose an outsourcing partner? • Effective communication • Process & quality • Technology experts • Legal transparency • Summary: How to start? • About us Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
Why outsource software projects? Overcome skills shortage Decrease development cost Looking for experienced web or Java developers with no luck? Find your talents abroad and get them on board at affordable rates. Want to increase margin on your software projects? Outsource some of them to cost-effective locations and leave more money on your table. Handle spikes dynamically Increase flexibility Attractive opportunity but out of capacity? Every single IT company has this problem. Feeling constrained by your in-house dev team? Tired talking to your IT department? Unload spike workloads with remote developers available on a contractual basis. Outsourcing companies are experts in agile development processes and flexible project scopes. Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
How to choose an outsourcing partner? Nearshore location in EU Direct flights Selecting a company located „next door” means that you can a) easily visit them when needed, b) work in similar time zones, c) avoid cultural clashes, d) location within EU reduces your legal risks dramatically. You should be able to visit your partner easily – pick locations available with 2hr direct flight and discount airlines, so you can meet in person every time it’s needed. Similar time zone No cultural differences Daily communication is a key success factor in IT projects, so choose locations within +/- 1 hr time zone difference. Effective teams can work together even when geographically distributed and your major task is to build rapport between your team members. This will enable you to talk directly with developers during the day. Daily communication, English proficiency and similar personal interests help a lot! Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
Effective Communication Excellent communicators English proficiency You should validate your candidate outsourcing company for communication skills, starting from managers to individual developers who will be working with you. Remote team must speak fluent English and you should be able to communicate with them clearly with no issues and misunderstandings that may result in unexpected results. Direct and ad-hoc access is a must Instant communication tools Insist on having a direct access to developers who are assigned to work with you, you should be able to talk to them any time during work hours on a daily basis. Bonus points for companies providing dedicated project managers to your projects. Don’t be afraid of using Skype, Google Hangout or any tool of your choice to facilitate conversations within your distributed team. Instant communication can make geographical distance irrelevant. Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
Process & Quality Development process applied Use Scrum Ask for details about development process. Do they have testers? How do they estimate dev effort? Who fixes bugs and is bug fixing chargeable? You should know all the answers before signing the contract. Favor companies who use Scrum on regular basis. Scrum puts major emphasis on deliveries, scope management and communications. And these are your major worries, right? Ask for references and avoid low cost/low quality companies Day rate better than fixed-price You are about to hire a team located abroad. You should definitely ask whether they work with any companies close to you and check their actual experiences. Avoid low cost companies, don’t compromise on quality. Day rate model typically provides better results and lower costs. Why? Because software estimation is not a hard science and the outsourcing company will include any risks in their fixed-price quote anyway. You can also flexibly shape your project in consecutive iterations. Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
Technology Experts Bring your CTO Run standard interview After initial discussion about commercial terms you should ask your CTO to talk directly with your potential team. He should evaluate their both technical and communication skills as they will likely be working together. Treat this like a normal recruitment process, you can even use your standard tests and puzzles. You should be confident about skills of your future team, so don’t pick any shortcuts. Avoid universal companies Look for experts Some outsourcing companies offer PHP, C++, iOS, Java, Delphi, RPG, etc. services all at one. Can you imagine building and running a successful team like that? If no, you should stay focused on specialised companies with one-two preferred technologies. Experts bring experts, so let your CTO talk to their CTO. Do they share the same principles, would they be happy working together? Is their CTO recognised by some well known companies for his work or skills? Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
Legal Transparency Contracts in English Payments in your currency The contract should be formulated in English (or your native language if different) and if you are a UK based company you should insist on UK jurisdiction in case of disputes. Don’t expose yourself to FX risks and define payments in your local currency. Your outsourcing partner should be absolutely fine with that and use tools to mitigate FX exposure risk on their side. Clear cooperation terms VAT UE registered company Consult the contract with your lawyers. Double check contract termination terms. Avoid lock-ins. Is your IP protected by NDA agreements? Can you split the work and payments into chunks, e.g. iterations in Scrum, to minimise the initial risk? It may be preferred and easier for tax and accounting reasons to cooperate with a VAT EU registered company. Double check their registration status at ec.europa.eu/taxation_customs/vies/ Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
Summary: How to start? 1. 2. 3. 4. 5. 6. Look for technology experts, not universal companies. Initial call to discuss commercial terms. Technical interview, invite CTOs from both sides. Agree on terms and rates. Review the contract. Start small and grow your remote team over time. Let us know about your experiences! (see next slide) Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
About us We are a software house building bespoke web applications and providing experienced full stack Java developers to clients in the UK and Western Europe. Our office is located in Wroclaw, Poland (EU), with 2 hr direct Ryanair and Wizzair flights to major European cities. Contact us for more information: Website: www.codedose.com Phone: +44 (0) 20 3322 8684 (UK) Visit our website www.codedose.com or call us now +44 (0) 20 3322 8684 (UK)
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