Choosing the right software development partner is the key factor in successful outsourcing. How do you find the best outsourcing partner? Where to start and what your requirements should look like?

A software agency brings together experts with knowledge of many programming languages, who will help you bring your dream product to the market faster and advise you on how you can minimize the risk of errors. When you hire a software house, you outsource not only programming work but also design, testing as well as experience and cooperation. It becomes important to know how to select the right partner.

Very often software suppliers are selected based only on their written replies, tenders, and résumés. For some strange reason, buyers want to keep the relationship distant up until their final selection. Yet you are hiring experts to work for you. Résumés alone don’t tell you much about the supplier’s level of expertise or attitude. As a client, it’s worth your while to get a feel of the supplier organization, up close and personal.

Productivity Isn’t Measured by the Hour

In traditional corporate culture, raises are handed out to everyone equally. If you deviate from this norm, there’ll be the devil to pay.When increased productivity earns rewards only for those above middle management, it’s not surprising that people often still think of hours as units of measure relating to, and charging criteria for expert services.It’s seemingly simple to compare prospective suppliers by their hourly rates. But a much smarter approach would be to look at the results they are able to achieve in an hour.Look beyond the price tag and get better results by following these Software Development Buying guidelines: 

• Visit 2-3 software development suppliers and personally interview the team they’re planning to allocate for your project. Ask them to give examples of previous products or services they’ve developed
• Ask them about similar projects they have experience on: what was achieved and how long did it take? Compare the time spent to the results achieved
• Ensure that the supplier rewards all their employees for achieving desired results
• Ensure that the supplier has adopted widely used best practices for software development, including centralized version control, continuous integration, and automated testing

Agile Agreements and Software Development Rates

Software development has traditionally used two different pricing principles:

1. hourly rates
2. fixed prices

The problem with fixed pricing is that it is inflexible in the face of change. With a fixed price, you get what you thought you needed, not what you actually need. The simplest and best-suited model is hourly-based pricing. But when it comes to software development, this model has a poor reputation that often limits its use. Clients assume hourly rates to mean that the bar is open and are afraid of risking a massive hangover. Fortunately, this possible lack of confidence at the beginning of projects is easy to dispel. Once the collaboration proves to be smooth and trust between the parties starts to build, it’s often possible to switch to the more flexible hourly rates. Bypass the ‘problems’ of hourly charging at the beginning of projects with these nifty tricks: 

• Satisfaction Guarantee. If your supplier doesn’t achieve agreed-upon results, they don’t get paid.
• Minimum viable product. Make an initial agreement which only contains the implementation of an MVP. Its functionality may be limited enough to allow fixed pricing.
• Carrot and stick. Get the best of both worlds by using one of the many pricing models developed to combine the benefits of hourly rates and fixed prices. One example is to pay a predetermined bonus when the project is finished under budget and lower hourly rates for any work exceeding the budget.
• Trial sprints. Collaborate with two or more suppliers on a trial basis. The Finnish Innovation Fund Sitra chose the supplier for its website project by ordering trial sprints from two different companies and based their final decision on the results. This method is commonly used in architecture competitions, so why wouldn’t it work in software design? The problem with fixed pricing is that it is inflexible in the face of change.

End of the project and what next?

A good software house does not leave the client without post-implementation support. This is important because IT products are complex creations and it takes a very long time for a new team to learn about them (many weeks, sometimes months). Therefore, when choosing a partner, make sure that it is with you as long as you need it. As a standard, it should be a minimum of 3 months after the formal implementation, a good practice is a period of 6 months of support.

Conclusion

Choosing the right software development partner is not an easy endeavor. There are a lot of factors that you need to consider so that you can make an informed decision. Start by understanding what kind of outsource services you need and follow the checklist to find the right outsourcing company for your project.

Luckily, the guidelines above will help you make a decision that leads to a reliable long-term partnership and achieved business goals.