Choosing a Software Development Outsourcing Company – Parameters to Consider, Criteria to Follow

How to choose Software Development Outsourcing

Over the course of last 2 decades, software development has seen many transformations – in technology, in application, in platforms and of course in hiring. 

With the year 2022 bringing new tides and new (acceptable) notions of work, many businesses have been forced to adapt to new development processes to keep up with changing market demands and customer requirements. 

Having said that, all-sized firms nowadays outsource their technology needs in some grade or the other. Software firms, as big as FAANG, or as little as your neighborhood fledgling startup expect their software development outsourcing company to streamline processes and increase revenue.


During the period 2021-2024, the market is expected to increase at a rate of roughly 3 to 5% each year. The global IT outsourcing market was expected to be worth roughly $92.5 billion by 2020. Every year, the size of the market fluctuates. Over the last five years, the market has risen steadily from $88.9 billion in 2015 to a predicted 98 billion in 2024.

Outsourcing software development has several advantages, including 

  • lower costs: simply since you are distributing software development to experienced yet cheaper resources,
  • faster time-to-market: by reducing attrition losses, hiring additional resources as and when needed and working with a vendor, 
  • access to the best talent: global talent pool access – have developers in India or Ukraine mull over your project as you hash out strategy and vision, and
  • access to the most up-to-date tools & technology: hiring made easy especially for skills and tech experience not ‘locally available’.

According to a Deloitte 2020 report, 70 percent of organizations prefer outsourcing to save money.

The problem arises when it comes to choosing the best software solution for your company. It’s due to a lack of information about the service, the KPIs, the process – due to the fact that they are new to the outsourcing or staff augmentation and don’t know where to begin.

With this blog, we’re looking to give you a glimpse on how to find the best outsourcing partner for your project without failing to turn it into a feasible initiative –

Flow chart of selection proccess

Process to Pick the Right Software Development Outsourcing Company 

1. Recognize Your Requirement Gathering

You must evaluate challenges and analyze viable solutions to determine your project needs. Choose outsourcing service vendors based on the nature of your project, the resource requirements, the tech stack needed, while exploring potential solutions.

Keep in mind to not be oversold – since that is the very premise of this exercise – hash out requirements, and expectations and maintain a contractual obligation towards it (having it enforced verbatim as well)

The steps you must take to comprehend your requirements –

  • Business goal and the budget consideration for the project
  • Technology consideration and assessment of potential size of project
  • Timeline and QC for the project deliverables
  • What tools and technology do they use 

Additionally, keep a check on whether:

  • There is a Requirement elicitation process set by the vendor
  • There are aspects for flexible delivery 
  • There is a due process and diligence prior to the project by the vendor

After defining your requirements, you may start looking for a reliable partner. 

Be mindful about the process-oriented schema and assess whether your outsourcing partner is just winging it or do they have a process in place.

2. Exposure to Latest Technology with Strong Technical Skills

Never hurry & take the effort to choose an offshore outsourcing partner with the technical competence your software requires. Keep in mind to not choose a vendor who has legacy stacks and old-school experience. Examine your potential software outsourcing partner’s talent pool, developer profiles, knowledge base, experience, and tech exposure.

Can’t expect much great code out of a vendor whose developer pool is still tinkering with legacy stacks and models.

Always look for an outsourcing partner who can offer developers with –

  • Complex project management experience
  • Communication efficacy for collaboration + remote readiness
  • Experience with tools, frameworks, and scripts pertinent to your chosen tech stack

It’s always preferable to work with a team that uses agile or hybrid development methods. Try to grasp how the software Team works and how serious they are while interacting with them. Always choose a vendor who has access to the most up-to-date technologies and its adherent process and management ethos.

Quick plug: Our team has decades of experience helping organizations build Teams of high-quality IT professional/s (onshore, offshore, nearshore) that align well with their business goals and culture. You can also reach out to us to build your team by learning more about our other engagement models to avail.

3. Budget &Size of the Company

Consider the size of the organization that you are planning to engage with. The company’s size and the scope of its services are significant. Companies that mostly engage with big companies will be unconcerned about your shorter batch of requirements if you’re a small or medium-sized business. However, several small to medium-sized businesses can take on projects of any size and provide an expert or bespoke solution. 

Then comes the cost of hiring an outsourcing firm. The first reason most organizations choose outsourcing is to save money. Remember to choose a provider that can meet your business needs on time and budget while also providing a high return on investment. 

However, the quality should not be overlooked. Inquire about software development outsourcing vendors’ services, packages, or offers. You can compare their costs (including additional fees) to the cost of hiring internal employees.

4. Check Cultural Background & Geographical Location

The quality of a software product might be hampered by exceptional values and distinct corporate cultures, affecting delivery, causing project delays. If you want your software collaboration to succeed, you’ll need to dig deeper into the cultural background and ethical notions of vendors (no need to take a philosophical dig – just consider reviews, ratings, and past projects)

Also, while seeking a partner abroad to engage dedicated software developers, a convenient geographic location is a critical criterion that any organization should consider. Little or no time differences and a convenient location are two advantages that can help you boost your partnership significantly.

5. Post Development Service Support

Finding a business that would invest in your company and your project is hard, but it is well worth the effort. Remember that a plethora of organizations can provide you with an outstanding array of customer logos, pitch decks, and a solid portfolio of previous projects to help you acquire clients. But, rather than signing a contract for project completion, it is up to you to do your homework, and establish long-term engagement.

Ensure that your provider provides adequate post-project service for future support. You must have some connect with their technical team, which will provide post production services like bug fixes, maintenance, and upgrades.

To Wrap Up

When it comes to growing your software firm, high-quality software is a critical component worth your time and money. Everything, however, hinges on selecting the right talent ergo an appropriate software development outsourcing company. You’re putting your faith in a software development agency’s ability to create tailored software solutions to the difficulties your organization encounters when you hire them. Following the criteria mentioned above, you can map certain considerations to your hiring process and find a team of outsourced software developers will save you time, money, and effort.


Choosing a Software Development Outsourcing Company – Parameters to Consider, Criteria to Follow
Anup Mehrotra
Published on
January 20, 2022

Kickstart Your Project With Us!


Let's Build Your Agile Team.

Experience Netsmartz for 40 hours - No Cost, No Obligation.
Connect With Us Today!

Please fill out the form or send us an email to