Software Product Development: The Power of IT Outsourcing Services
There are two major aspects of software product development success:
- Thorough product development planning, covering the investigation of user audience needs and preferences, analysis of the market and competitors’ solutions, defining the business value, key features and app logic, etc.
- High-quality software development, ensuring reliability, security, robustness, scalability, flawless performance and superb user experience of your digital product.
Here you will learn how to leverage the power of IT outsourcing services regardless of the stage of your project implementation, and of your current team composition.
We will also reveal why you should not be afraid to delegate your product development by explaining the common risks of outsourcing and ways to mitigate them. Ready? Let’s begin!
Why product development outsourcing is a thing to consider
Software product development consists in complete implementation of your digital solution idea. It covers the full process, from the project discovery stage to market-ready product deployment and support.
It’s pretty obvious that IT outsourcing services are a way out for those product owners who do not have an in-house team of software developers. However, such services also have a lot to offer to the businesses with their own IT departments. In fact, approximately 76% of companies with in-house software development teams use IT outsourcing services.
Source: Deloitte Global Outsourcing Survey
This trend is largely driven by the need for specialized expertise, operational flexibility, and cost efficiency in meeting demand for software development.
For instance, as businesses face talent shortages in fields like AI and cybersecurity, IT outsourcing becomes an attractive strategy to fill critical skills gaps while remaining competitive and innovative in technology-driven markets.
Among the benefits of IT outsourcing services are the following ones:
- Cost efficiency.
- Having an in-house IT department is often unaffordable for businesses, in particular for startups and small companies.
- Often the need for the IT team extension is temporary, so it makes little sense to hire developers for full-time work on a constant basis.
- Offshore software development can save up to 70% of the costs of hiring locally by significantly reducing the cost of recruitment and operational processes, as well as reducing the development costs by hiring app developers from the countries with lower average wages.
- Maintaining an in-house IT infrastructure, such as servers, software, and other technology, requires significant investment and frequent updates. Outsourcing providers typically offer the necessary infrastructure and ensure it remains up-to-date, which can reduce costs associated with purchasing and managing high-tech equipment.
- Outsourcing vendors offer lower rates for services than what companies might incur internally due to streamlined processes and, possibly, shared resources with their other projects.
- Team scalability.
- Outsourcing enables easy IT talent augmentation based on project needs, e.g. when more software development and/ or quality assurance engineers can streamline the product development.
- With IT outsourcing, it’s also easy to scale the team down when the project scope decreases without the long-term financial commitment associated with hiring, training, and maintaining a full-time workforce.
- Access to global talent and their specialized expertise.
- IT outsourcing companies often have dedicated specialists in areas like AI development, custom software integration, cloud and DevOps engineering, and others. It’s a perfect option, for instance, when some specialized features should be implemented, e.g. enhancement of user experience with inline editing, or implementing sound recognition with AI. Hiring such experts in-house can be costly and challenging, while there may be no actual need for permanent IT staff augmentation.
- When you hire an in-house IT team member, you rely solely on their skills and knowledge. While, when you hire one specialist from the IT outsourcing company, you, in fact, get access to the company’s expertise. For instance, if any obstacle arises, this person will be able to consult with their colleagues, and get an efficient high-quality solution faster.
- Offshore outsourcing allows IT talent acquisition from all around the globe, providing a possibility to tap into specialized skills, and save product development budget.
- Faster time to market.
- Outsourced software product development services sufficiently power up your IT team, accelerating the product development life cycle. This results in faster time to market, which is crucial regarding the market competition.
- Focus on core business goals.
- After you have completed all the product development planning, and defined all the respective requirements, delegating the product development to the outsourcing provider frees your in-house team. So, while keeping an eye on the current product development, they can focus on new strategic business goals.
Gain clarity with your project!
Outsourcing concerns and how to prevent the risks
A software product idea is often treated like one’s own child, or like a dream they want to give a life to. No wonder, product owners may feel concerned about delegating its technical implementation to outsourcing companies.
Here are the key factors to consider when outsourcing:
- Get a tech expert in the product owner’s team. Sure, it can be the product owner themselves. Having a technical background is crucial for understanding all the nuances of software product development. It’s also necessary to properly keep track of the implementation process, and to make sure it’s heading in the right direction.
- Define clear product scope and requirements. This refers to the thorough product development planning I’ve mentioned at the beginning of this article. Although outsourcing providers can assist you with shaping the product scope and requirements, it’s certainly your responsibility to provide them with as clear and explicit product outline as possible. It is necessary to build exactly the product you have envisioned.
- Choose the right IT outsourcing company. Easy to say, but how to actually do it? You will need to do research about your potential tech partners and conclude it with the comparative analysis of your findings. The things to consider include but are not limited to
- the vendor’s experience, i.e. how long they have been on market. If this time is less than 3 years, it means that their business processes may be not well-established yet.
- Their expertise with the similar projects: check out the portfolio cases, clients’ reviews on Clutch, etc. Pay attention to the dates when those reviews were published. Software product development is a rather time-consuming process, which makes it suspicious when there are many reviews within a short period of time.
- IT outsourcing company size: it may be challenging for small outsourcing vendors (under 20 employees) to scale your team or to replace their expert with the other one if necessary.
- Scope of the outsourcing services ideally should cover the full software product development life cycle (described below), from discovery phase to product deployment and support.
- After getting in touch with the outsourcing vendor, pay attention to the company culture, and ask for a few reference contacts of their clients so you can learn more about their experience of collaboration with this company.
- Here are more details on how to choose the right IT outsourcing partner.
- Get the software development contract right. Make sure it contains the full list of the services provided, the regulation policies and related laws (e.g. in case of breaching the contract). It should clearly state that you are the owner of the intellectual property, and provide data safety measures, etc.
- Keep track of product development documentation. Keeping a log of the changes implemented is useful in many cases, e.g. when you need to onboard new team members, or to spot the reason that caused a particular bug, etc.
- Establish effective communication. Every single aspect of your collaboration with the outsourced team should be clear and transparent. Open, regular (daily, weekly, bi-weekly meetings, product demos, etc.) and constructive (with a strong defined agenda) communication ensures good product development dynamics and efficiency.
To follow the outsourcing best practices, it’s necessary to know the stages of software product development. It’s also crucial that you know the roles and responsibilities of your acquired teammates, so that the communication is efficient.
Software product development process and team composition
Product design and development services cover the full product development life cycle, as well as can provide assistance required with each of its particular stages separately.
Software product discovery phase
The basic team involved: business analyst, project manager, UI/UX designer, tech lead.
Main deliverables: product vision and business goals; product backlog; software architecture plan; DevOps plan; detailed requirements and designs for the 1st sprint; implementation roadmap and efforts estimation.
Product discovery lays the cornerstones for your project. At this stage, product stakeholders are the most actively involved in the process. It’s crucial for elicitation of functional and non-functional requirements which are fundamental for implementing exactly the product one has envisioned. Discovery phase defines the optimal technical solution, including software architecture and tech stack. It also defines product development scope, and provides the estimates of time and budget required.
Software infrastructure development
The basic team involved: DevOps engineer
Main deliverables: software product infrastructure setup
Software infrastructure determines the product’s scalability and performance potential. DevOps engineer defines the amount of computational resources required for proper product performance. It’s important to find the balance between the required performance quality and cost efficiency. As a rule, they are proportional, meaning you can get higher KPIs at higher cost.
At this stage, we also pick the appropriate cloud services configuration. It’s important to consider cost optimization, as well as setting up infrastructure monitoring and alerts. Also, implementation of security practices is a must to safeguard data and operations.
UX and UI design
The basic team involved: 1 or more software designers, depending on product development scope and timeline.
Main deliverables: complete product designs, enabling intuitive software navigation, simple, effective, and pleasant user experience.
UI and UX design has a far deeper purpose than just aesthetic product appearance. It’s a powerful means for boosting your product’s usability. Logical pages layout helps the users complete their tasks within the app intuitively. Increasing employees’ productivity, growing the number of clients and sales are only a few examples of UI/UX design goals.
Source: Clutch
Software product development
The basic team involved: full-stack developers, and/or backend and frontend developers, mobile app developers, DevOps engineer
Main deliverables: wholly-functionable MVP and final product
It is the code behind each component of your product designs that makes them function according to the app logic planned. Software product development covers
- proof of concept (PoC) development to make sure that the chosen way of tech implementation is feasible
- MVP development to test your product idea and get users’ feedback as soon as possible, and, possibly, to attract investors
- full-scale product development, that is an agile process which takes into account the users’ needs and suggestions
- integration with third-party tools and services
- setting up continuous integration/continuous deployment (CI/CD).
Digital quality assurance
The basic team involved: 1 or more QA designers, depending on product development scope and timeline.
Main deliverables: fixed code flaws and software product malfunctions
Though brought up here as a separate stage of product development, quality assurance is crucial throughout the whole process of product implementation, and even afterwards, as a part of its post-launch support.
- Unit testing and end-to-end testing ensure the proper functioning of all product components both separately and as a single unit respectively
- Integration testing ensures that the software works as intended with other parts of IT infrastructure
- Load testing checks if the product can perform well under heavy usage.
Automated testing helps to speed up the quality assurance process, while manual testing is important for checking the functionality whose testing is difficult to automate, as well as to make sure that the highest product quality is delivered. QA is a vital part of providing excellent user experience.
Product maintenance and support
The basic team involved: depending on the project needs, DevOps engineer, full-stack developer, QA engineer.
Main deliverables: depending on the project needs, IT infrastructure optimization, security updates, bug fixes, functionality adjustments, etc.
As a rule, product success leads to the growth both of the product, and of its user base. This may require additional tech support regarding feature enhancements, as well as adjusting infrastructure to support the increasing demand.
Besides, it’s a good practice to set up the product’s performance monitoring and analytics, to implement the changes required as soon as the need arises. It’s especially important when it comes to patching vulnerabilities and improving security measures.
Software product development outsourcing case study
Outsourced development team: 14 full-stack web developers, 1 react native mobile app developer, 8 QA engineers, 1 customer support manager.
About the product: Hive is a project management software, aimed at boosting efficiency through simplifying and optimizing business processes. It lets you schedule, complete (deliver emails, conduct video conferences and work calls, share team updates, and much more), track, and analyze all the tasks within a single work environment. It’s a highly customizable SaaS solution that covers all their client’s needs without any excessive functionality.
About our outsourcing partnership: It all started with a product idea of Hive cofounders. They wanted to provide the teams with a collaboration tool that will truly eliminate all the unnecessary processes while automating exactly the routines of each of its users. This formula equaled to efficiency and success. In 2015, 3 specialists from Apiko began developing the platform from scratch.
However, no matter how brilliant the product idea is, it’s necessary to understand that the product quality cannot be compromised. The Hive founders enlarged the product team with Apiko’s digital quality assurance outsourcing services. Implementing the QA processes at the early stages of the product development was one of the cornerstones for Hive’s future growth. (Find more details in our blog article From Startup to 16 Million Dollar Venture: How QA Processes Influence Company’s Growth.)
Today, Apiko's outsourced team consists of 24 specialists who productively collaborate with the Hive’s in-house team, in fact, pretty much feeling as a part of the in-house team as well.
Hive is the platform with over 1000 integrations, and still growing and offering new digital solutions to a broad variety of clients.
Could you imagine the consequences of implementation of the software testing at Hive at later stages? It would have certainly been a way more effort- and time-consuming, and, despite it, a less efficient process.
Conclusion
The forecasted growth of IT outsourcing services is absolutely well-reasoned. Outsourcing powers up the in-house teams, ensuring agility and access to global talent resources for specialized tasks in software product development.
To make the most of the outsourcing partnership, it’s important to approach it wisely. It’s necessary to spare time for preparation, including defining your product idea, functionality, business logic. It also takes time to select the outsourcing vendor whose expertise is the best match for your product development.
Pay special attention to the contract for outsourcing services, make sure all legal regulations are clear and transparent. Establish effective communication channels, even if it may seem challenging with the different time zones, like in case of offshore outsourcing. Delegating your software product development still requires your active involvement.
It’s necessary to check the progress regularly to keep full control of your project. Product development is time-consuming: you need about 3 weeks to complete the discovery phase, 3+ months to build an MVP, and even more time to get the complete product. Several circumstances, like changes on the market, or in users’ needs, may introduce changes to the initial product development scope. You are the one responsible for steering the product development, so that your digital solution is exactly what the user audience needs.
All in all, outsourcing services won’t do all the work for you, but they certainly offer high flexibility for your business. Besides the cost efficiency of long-term outsourcing partnerships, they allow business owners to shift their focus to other strategic business goals, even if that’s coming up with the next product idea!