Hiring an outsourced development team can be a great way to save money, improve efficiency, and gain access to the latest technology. Though finding outsourced teams has its own complexities and specifics that customers need to know.
In this article we describe situations when you need an outsourced development team, the main models of cooperation, how to hire such teams and where to find them.
When you need an outsourced development team
There are several situations when businesses should think about an outsourced development team. Let’s talk about each situation in more detail.
Situation 1. You are a small startup that does not have expertise in mobile app or site development. You are a great expert in another field, and your developers are highly specialized, but only in your own product development. In this case, to create an infrastructure around your product, you need support of agencies that can provide an outsourced development team.
Situation 2. Also related to startups. You have received a good investment, and this money should be spent on rapid growth. However, it’s impossible to hire the right specialists quickly: it takes a long time and there is a shortage of good specialists on the market. In this case, an outsourced development team is a good choice. It is a mixed team when outsourced specialists work in conjunction with the product team, complementing each other.
Situation 3. You are an existing business that is rapidly scaling up. You have business expertise, marketing tools to promote your product, but you don’t have a development unit. In this case, you should also turn to agencies that can help with an outsourced development team.
Situation 4. It is a partnership. For example, you work with online advertising and have contracts with big brands. In order to attract users from your ads you must create landing pages, promosites, or applications on a regular basis. In this case, you turn to an outsourced development team as a partnership.
Situation 5. It’s about a corner case. For example, your company already works with an agency, but you are not satisfied with their results due to problems with deadlines, budget, or quality. So you start looking for another agency to replace the current one, and often they opt for a team of outsourced developers.
Continue reading if you recognize your company and its need in one of these scenarios, keep reading. We will help you to immerse yourself in this topic. To make the right choice, you need to understand the basic models of interaction between the customer and the outsourced development team.
Outsourcing can be different
In the IT market, there are several models of cooperation between the customer and the outsourced development team. We will look at the main three and highlight their pros and cons.
1. Fixed Price
This is the basic model. The customer has a clear understanding of what product he needs, at what time, and he is ready to share his product expertise. The agency briefs the customer to gather requirements: collect data, references that he likes or dislikes and etc. It is necessary to understand what kind of project the customer wants in the end.
Pros: The price of the contract, terms, and scope of work are fixed. After the customer`s briefing, the agency says for what money and time they are ready to release the project. The agency commits to the scope of work, which must be completed within a certain amount of money and time.
Both the customer and the agency understand the final cost of work and terms clearly.
Cons: The main risks fall on the agency. It could underestimate or misunderstand something, and then the implementation can take more time than the period fixed in the contract. As a result, this may lead to penalties for the agency.
For the customer, the main disadvantage of this model is the lack of an agile approach to development. What is the agile approach we are going to describe below.
2. Time and material
Time and material model is the agile development approach. You fix not a scope of work, but the final result, within which you can move iteratively, making one feature first, then another. In this case, the customer’s product can be released faster due to the results of each sprint, we can put some features into production. Within this model you can test your product hypothesis and adjust the product direction. The team works on those tasks that it considers necessary.
T&M is good to use when it is impossible to determine the scope of work or the timing of its implementation.
Pros: The outsourced development team works directly with the customer, and the scope of work can change at any time. The project manager is responsible for monitoring the development team’s progress, ensuring quality control, and enforcing deadlines. The team reports monthly, and the invoice is paid based on the results of the work.
Cons: Mainly, there are unpredictable expenses, because there is no clear understanding of the scope of work. You understand roughly how much money is spent per month, but you do not have a specific business result tied to that money, because the list of tasks may change during implementation.
3. Dedicated talents
For example, the customer has his own staff of developers, but they are not enough. They are working on the product and understand that they need to quickly increase their capacity, for example, by withdrawing 10 developers and 2 QA engineers over the next six months. They do not have such resources and cannot redirect them from other projects. Dedicated talents are a great solution in this situation.
The project is fully managed by the customer`s team. They know what technical expertise is needed; they interview team members (as if they were hiring them for their staff) and agree on how long the team is needed.
Pros: The developers will be integrated as a part of the product team, similar to in-house employees. If there are no tasks, specialists just sit and wait, they don’t work anywhere else. It is also a discount when specialists are booked for 6–12 months, the team is given at a lower rate.
For the agency, the advantage is that you have an understandable burden on specialists. While they are busy, you don’t think about how to manage them and so on.
Cons: The customer always needs to provide employees with work and to manage the team, as well.
Remember, this or that approach is chosen based on the customer`s tasks. A good agency always advises and helps determine the best model for the client according to his needs.
Checklist for outsourcing development team
These are the critical points on which the customer should concentrate his attention when making his decision:
Good impression. Pay attention to the impression that the agency makes on you. This is psychology: if you don’t like a person, you probably won’t get along with him. There are many players on the IT market, so you need to look for the agency with which it will be comfortable to communicate.
On the same wavelength. Pay attention to how accurately the agency you communicate with offers you what meets your expectations. Check it like this: when you have explained the task, ask the agency`s specialist to describe how he sees the project and its implementation. And if you like the approach and you see that the other side understood what you were talking about, as a result, you will get exactly what you expect.
Study the agency’s expertise. You should ask what projects the agency`s team has already worked on. If this team had worked in your field with a product you liked, then you definitely needed to pay attention to these guys. Most likely, such an agency will make your project 1) faster — due to its expertise, 2) less expensive — due to the reuse of some of its developments, and 3) they will definitely cope, because they have previously completed similar projects.
Conduct an interview. Usually, you have internal specialists who will be able to assess the skills of the people you bring to the team. You need to conduct interviews to understand who they worked with, what skills they have, how they solve various kinds of problems, and how they think.
Transparency of the agency’s positions. If the agency tells you about the approximate costs, the approximate number of specialists for your task, and the approximate implementation plan — all these points should immediately alert you. Vague descriptions of the process and the absence of important information are the first triggers showing that it is risky to work with this agency.
Where to find your dream development team
We already know how the interaction between the outsourced development team and the customer is built, and we know the main points to which you should pay attention when choosing a team. The only thing left to do is figure out where to look for your dream development team.
We will tell you about the basic options that always give a result and help in the search. Of course, you should not stop at one thing, you can mix approaches for a faster and better result.
Word of mouth/networking. If you see a project that you like, you may ask the owner about the agency that did it and go to these guys. This is the most efficient way.
Specialized networks and ratings. Clutch and Sortlist are the leading ratings and reviews platforms for IT, marketing, and business service providers. You can find real agencies there, with real customer reviews and real examples of work. There are also specialized networks like Behance and Dribbble where agencies showcase the results of their work.
Tenders. You can open your tender on the tender site. Specify your wishes for the budget, deadline, and so on. Further, the agencies will respond to this tender, and you will choose from them. You can invite agencies to complete the competition task and then choose what you like best.
Google it. Look for agencies in search engines, study the search results. Pay attention to the following points: what kind of website they have, what projects they carried out, customer reviews, and what awards they have.
We hope our recommendations and checklist will help you make the right choice and find exactly the team that will implement your project on the best terms and help you become a market winner.