Not every product can be built in-house

The benefits of outsourcing web app development

Liam Evans

Insourcing and outsourcing image via Shutterstock

The reasons are simple — hiring the best developers in-house may not be a good decision for your budget or they just don’t want to work for startup or companies without tradition. Maybe you don’t have sufficient resources to build the core parts of your product. Your in-house team struggles to stay innovative as they focus on operating and growing your existing assets.

These are just a few scenarios where outsourcing software development is a good idea. In fact, all the cool kids are choosing to outsource talent. Here’s how and why:

All the big names are outsourcing web app development

According to a recent report by Gartner, outsourcing talent already surpassed the global benchmark of $524.4 billion in 2015, with the IT services outsourcing occupying the major fraction. A recent survey from Deloitte revealed that:

  • 35 percent of respondents mentioned that outsourcing brought about innovation.
  • 45 percent claimed that an outsourcing center helped solve the global capacity issues.
  • 28 percent mentioned expanded access to intellectual capital and 29 percent highlighted global scalability.
  • Despite the common productivity stigma around outsourcing, 20 percent of respondents mentioned that it allowed them to improve efficiency.

In short, choosing to outsource web app development is no longer just a way to cut down the overall development costs. More and more companies are tapping into foreign markets to steer innovation, gain access to more experienced developers and amplify their business value.

How to outsource web app development: 4-step checklist

Missed deadlines, copyright issues, low-quality end product, IP theft issues and more serious legal problems are among the top concerns when it comes to outsourcing your operations. However, you can minimize most of the risk involved if you do your homework and establish an efficient communication pipeline for the project.

Avoid the lowest offers

When it comes to software development, what you pay is what you get.

In general, when you approach different companies for a mid-sized development project, you can be quoted somewhere between $10.000 to $300.000 for the same written requirements. How come the spectrum is so vast?

Each company uses different pricing methodologies, hourly rates and assumptions about the type of technologies and functionality you’ll need. To understand the logistics behind their pricing, you should take the following points into account:

  • Average hourly rates for experienced developers. Working with a US, UK or Canadian company will cost you between $100-$180 per hour; Eastern European developers charge between $30-$50 and offer a good balance of quality/cost; outsourcing to low-cost markets in South-East Asia and India will cost you $4-$15 per hour, yet the quality is likely to be low.
  • What’s included in the quote? Has the company also calculated QA and testing costs, continuous tech support and DevOps or just sent you a rough price for the backend/frontend of the mentioned features?
  • Review the company’s portfolio and accolades. Do they have experience in developing products in your niche? Check out their case studies, ask to speak to former clients and see what kind of testimonials they have on popular software development directories.
  • Assess the proposed payment plan. In general, the standard upfront payment is 20-30 percent of the contact’s total. Everything beyond that might be a red flag.

Don’t fall for the lowest bid as in most cases you’ll either receive a product created by amateurs or the quote roughly includes half of the actual costs as the company was just trying to start the conversation. The final cost depends on the kind of product you aim for. Here’s a quick budgeting breakdown:

Basic web development project: $5.000-$10.000

You are a small business owner who decides to expand a small brick-and-mortar business into the digital space. What’s included:

  • A simple website with a few pages, custom design and a few simple interactive elements.
  • Adding one component to an existing website
  • Custom landing page with attractive web elements

Mid-sized web development project: $10.000-$50.000

Your are a savvy self-funded startup or SBS on a mission to launch a scalable new digital product. An example project may be:

  • Robust integrated e-commerce solution capable to process over $1 million in revenues.
  • Professional, high-load website with large amount of pages and content.
  • Adding large new components to an existing website.

Projects for established companies: $50.000 – $150.000

You are a mid-sized company with a history in operations, seed/angel-funded startup or in charge of a small development project for a large corporation:

  • A professional website with custom-built CRM or CMS.
  • E-commerce website capable of processing over $10 million in revenues.
  • High-load, dynamic web application capable of sustaining over 1 million active users.
  • A web application to automate process in a company with over 200 employees.

Enterprise web application development projects: $150.000 – $500.000+

Enterprise projects are for fast-growing mid-sized businesses, well-funded startups and corporations. A sample project may include:

  • A full encompassing MVP platform for a brand new project/product.
  • Enterprise software add-ons to an existing infrastructure or building a mid-sized enterprise app from scratch.
  • Advanced software that requires large distribution and integration.

Now let’s see what’s next.

Opt for agile methodology

Agile approach to software development brings more transparency to the entire outsourcing process as you receive development builds every one or two weeks, meaning there’s plenty of time to assess the quality of code and make sure your outsource team is heading in the right direction.

Agile approach entails working with a development team directly and watch how your product vision comes to life, one step at a time. Besides, agile teams are typically more flexible when it comes to making tweaks and changes in product direction during the project. Efficient communication and timely feedback is essential for successful web app development outsourcing.

Assign ownership

Don’t be afraid to give your outsourcing partner entire ownership of your codebase if you choose to outsource your project partially. Of course, you should have all the respective legal documents and NDAs signed before doing so.

The reason why it’s worth it is because it diminishes delays related to merging different versions (branches) of your web and backend applications produced by different developers in different time zones. Such delays in merge can drastically extend your project’s overall timeline as resolving those conflicts can take hours or days.

Build and efficient communication funnel

Efficient communication is the key to smooth outsourcing of web application development services. Having a productive, open dialog during the entire project is simple enough if you adopt the right approach from day one:

The sync call routine: Clearly define the time of the day one/twice a week when you get together on a conference call and schedule a project demo, report on new features and make sure everyone is still on the same page.

Don’t over communicate: After you have put all the project details on paper and you’ve settled on the majority of specifications, resist the urge to get in touch every other day and ask additional questions or offer clarifications. Don’t let the communication get messy.

Settle on the right type of reporting and communication tools: Having dozens of messy email threads and chats does not look good. The most productive and handy tools are:

  • JIRA – may look complicated at first, but has robust project tracking functionality and dashboards.
  • Basecamp – perfect to keep all the communication and files in one place during the project.
  • Trello is a simple visual project management tool to stay updated.
  • GoToMeeting is an excellent video conferencing tool, but Skype is also good.

Open communication actually starts from the outset of your project. During the initial contact you must be clear about your product goals and expectations and don’t be shy to proactively ask how this outsourcing web application development company will turn them into a final product. Ask them about the technology stack they suggest using and why it makes sense; show a few products you admire and ask what they can suggest in terms of similar design and functionality.

Be honest, precise and active in lines of communication to yield the desired results.

Liam Evans
Liam is an experienced developer working for Romexsoft. Also coffee and book lover.

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2 years ago

Thank you for useful tips. You have done a great job. Indeed, the benefits of outsourcing web development considerably outweigh the option of hiring a freelancer or a local team.

Divya Sharma
Divya Sharma
2 years ago

Nice Blog! Thanks for sharing a very useful post. keep it up.

Web & App
Web & App
2 years ago

Nice Blog! Thanks for sharing a very useful post. keep it up.