Mistakes that lead to failed IT projects are made while selecting the right software development partner. To avoid them, learn how to choose right.
If you have a list of potential vendors:
Sometimes a line between a good and bad software development partner can be really thin – differences lie in mindset (and team), expertise, and process.
Dive in to choose well between various software development companies.
The first step you should take when choosing a software house is defining project requirements and your expectations.
Based on the problem your product is going to solve, decide what the exact tasks for the developers will be, and what technologies, skills, and budget will be required.
Answering these questions will help you narrow your search down significantly and as a result, save lots of time.
1. Ask for recommendations.
2 Check out on sites like Clutch, Goodfirms, The Manifest, Design Rush. Look for leaders in their fields and companies with top reviews.
3. Look through various rankings like:
4. Talk to your previous clients.
5. Look through LinkedIn.
There are 10 crucial aspect that make it easier to choose a software development company.
Once you have selected one or more companies, you should take a look at their previous work.
Look for apps similar to yours or experience in the market.
If possible, test the applications listed in the portfolio. They are often publicly available and you can determine whether you rate them well as a user. The app’s rating in stores like Google Play is also a great indicator.
Once you have an idea of what the company can do, and it suits you, check their reviews.
Many companies publish testimonials on their pages. That’s great, but don’t rely on that alone. They might be completely fake and made up, and the people non-existent.
<span class="colorbox1" fs-test-element="box1"><p>Note: Testimonials on the company’s own page might be completely made up.</p></span>
You might consider finding the authors on LinkedIn and asking them for details and opinions.
Try to contact your network to check if any of your acquaintances have experience with the company.
Another easy way is to look for reviews around the internet, for example on Clutch, Facebook, or Linkedin. Clutch-like portals are great in particular – clients must publish the review themselves, and the platform verifies the author and in some cases calls them to ask further questions.
When it comes to technology, usually the fewer the better.
You want to work with experts. To be considered a real expert, a company needs experience.
According to our and our competitor’s experience a significant percentage of software projects is developed within 4-6 months, many others take years to finish. Technologies evolve quickly: some stay for long, some can become obsolete in 3-5 years.
Having the above in mind, it’s pretty unlikely that a company with 50 developers will be an expert in dozens of technologies at the same time.
<span class="colorbox1" fs-test-element="box1"><p>Key takeaway: it’s unlikely that a company with 50 developers will be an expert in dozens of technologies at the same time.</p></span>
Of course, the situation looks a bit different in the case of enterprises.
In general, if you see a software development company’s landing page has a ton of logos of different technologies, like RoR, PHP, Node.js, or .Net – be careful. You cannot be an expert in 10 languages (maybe if you are a huge enterprise).
To build a front-end in React, find a company working mainly in React.
You want to have a focused software development partner. They should be experts in the technology in which they work.
Because great process and tools = better product.
Find a company that puts pressure on constantly improving the development process and values retrospective meetings.
It’ll be a faster and more cost-effective way to integrate your external development team from day one if they can clearly articulate what they expect from you and what you expect of them.
Based on a report from Accenture, communication and quality of service are more important than price for customers today.
Agile development methodology is a standard – 80% of IT teams take advantage of daily standups, sprints, and a similar definition of done.
<span class="colorbox1" fs-test-element="box1"><p>Tip: In Agile methodology, transparency is key so always check what the company’s planning and delivery processes are like.</p></span>
Many companies finish their weekly/bi-weekly iterations with a review of the product. Thanks to these meetings teams have a sense of urgency and stay more motivated throughout the whole week.
When it comes to tools, you want your team to use:
We learned this advice from a book “Built to Sell: Creating a Business That Can Thrive Without You” by John Warrillow.
Choosing a company similar to yours has a few advantages, the most important of them is – You want to be treated as a VIC (very important customer).
If the company is too big, they may not give you enough attention. If they are too small, they may not have enough experience to work on such a scale.
We strongly believe in relationship chemistry.
We work with our partners (yes, partners, not clients) as closely as possible, discussing the shape of the product.
Once there is chemistry and we are on the same page by having extensive transparent communication, the pitfalls can be avoided, and we can pursue our partner’s business success.
The company should be eager to show you their progress as soon as possible. Each sprint should be finished with a demo of the product.
It speeds up the development! The developers are motivated to demo weekly/bi-weekly results of their work. They feel the pressure each week. You, as a client, have the same pressure to deliver information/specification/mockups for the following week’s sprint.
Weekly demos are part of the development process and have a huge influence on the quality of the process and speed of development, in our case.
As serial entrepreneurs, we’ve learned it’s not all about the code and technology behind your product – it’s about the business.
Your development partner should understand that and challenge the new features you develop, help you focus on priorities, advise you from a technical perspective, and connect with you as partners in their network.
How can you know that a company understands business side of tech projects? For example, they can offer cross-functional teams with Business Analysts and Tech Advisors. It’s also visible in the way they work.
Adapting the BizDevOps culture is a strong indicator of understanding business side of tech projects. The BizDevOps model assumes close cooperation between business and tech.
A company that implemented the BizDevOps model of working will closely cooperate with you as a stakeholder, shortening the feedback loop.
You don’t want to feel a language barrier – English is a must, nowadays. You want to have a software development company as your partner – to advise you, not only to write the code.
Creative problem-solvers with great language skills – those are the guys you look for. Therefore, think twice before deciding to offshore from a country with completely different culture.
Great technology is around 30-40% of a business’s success. Therefore, look for a partner who can advise you, not only write the code.
HackerRank provided a list of countries with top-skilled developers:
If you don’t have exact mockups, specification, user stories, project plan, and a well-documented product with a few years of experience building similar products don’t choose the fixed price model.
It will simply cost you more money than time & material based project.
If you choose a fixed price, most of the software development companies will add 25% or more to cover the risk of not knowing the exact scope of the project.
Time & material is the pricing to go with for most projects, since it allows for a lot more flexibility. We explain the difference between fixed price and time&materials later on.
Without proper security measures, the well-being of a company can be easily threatened.
Think about Intellectual Property. If your provider doesn’t transfer you the rights to the project, you won’t be able to monetize it or build upon it.
The infographic below demonstrates what project components should be protected and addressed in the contract.
<span class="colorbox1" fs-test-element="box1"><p>Note: not all providers include it in their contracts, so keep an eye out for that!</p></span>
Rights protecting the IP vary from country to country, so do your research about the place you outsource to. Ideally, you should have your own contract or ask the software development agency to send you one to review and consult with your legal department.
Of course, there are more documents and measures your partner and you should take care of before starting the cooperation.
Here’s a short-list of the most crucial ones:
There are a few things that should alarm you while assessing a potential software development partner:
It’s like buying products on eBay or Amazon – each time when you buy the cheapest iPhone cable, it’s broken after a week or two.
The same with buying services.
If you choose the cheapest offer, you will ultimately pay more at the end of the project.
There are a few reasons:
You don’t want to buy the cheapest service, but the most cost-effective. If you focus on spending less money initially, you will pay 2-3x times more in the future (the worst-case scenario – rewrite the app from scratch).
For many people, fixed-price seems the best pricing model. In theory, it should limit the risk of overspending and ensure complete & timely delivery.
In a fixed-price model (usually paired with Waterfall project management), all business and product decisions, as well as the scope of work, must be decided upon, declared, and contracted before the project starts.
On the other hand, in the time & materials model (which is usually employed together with the Agile methodology) the cost is based on actual time spent on a project and an hourly or man-day rate.
The scope is flexible, and changes as business, design, and software teams test and figure out solutions best fitting for the current needs of users.
Let’s compare the key characteristics of these two solutions side-by-side:
If you want to build a small feature and there is a lot of clarity regarding the requirements and the solution – BOTH will work.
If you want to build a full product for a market that does not shift too much, have all requirements detailed and basically no uncertainties at the start of the project – BOTH might work well.
However, the truth is that you can never avoid changing requirements (at least at a reasonable effort/cost). Meaning that if time-to-market is an important aspect of the project and/or there’s a limited runway, the requirements analysis will never be perfect.
Hence, if you choose a fixed price model, get ready for potential contract/scope renegotiations.
If you want to build a full product, for a frequently changing market, or you’re uncertain of how it precisely works – definitely pick TIME & MATERIALS.
You don’t know the cost, but even if the cost gets higher than originally planned, at least the probability that you get what you actually need significantly increases. If there’s a runway – make sure that the budget is clear for all the parties involved.
If you want to build:
There are at least four outsourcing models based on geography, each has its own advantages and disadvantages.
Onshore software development means working with companies that are located in your home country.
Its main advantage is that you can work with skilled teams in your own country and language.
However, there is one major concern with this option – the cost – which is usually significantly higher than other options.
In a nutshell, offshore software development means hiring a team from abroad to do the work remotely and virtually.
Main advantage? It’s affordable.
Nearshore software development is the in-between of the two options described above. These companies are located in countries with time zones similar to yours.
This solution provides a nice balance between natural, efficient communication and major cost savings.
Hybrid software development outsourcing is a mix of management done onsite (in your region), and actual development done abroad.
You can work with the management part in your native language and in the same working hours, while they deal with developers abroad and handle time zone differences.
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