4 steps to outsourcing software development efficiently

Outsourcing software development has become the new normal, and this strategy has reshaped all IT industry. Gone are the days when outsourcing software development was filled with task-doers and low-cost labour. Currently, it is a crucial tactic for any organisation who wants to keep up or keep ahead in technology. The focus has shifted from traditional work transfer to upfront transformation and innovation.

From startups to mega-corps, any company of any size or business complexity can benefit from this approach. Reduce fixed costs, speed up/scale the development team and find skilled developers fast, usually, are the reasons why businesses embrace this strategy.

But… most of us have heard quite a few outsourcing disastrous stories. However, when it’s done right, outsourcing can be the solution for many of your problems.

Choosing the right outsourcing partner is vital

Starting to outsource your software development is a major decision and for those who are rookies in these complex waters, it may sound harder than it is. The first big step is to choose the right outsourcing partner. In a nutshell, the fundamental areas you should look into are technical expertise and technical fit, skills to facilitate collaboration, and a development mindset that is aligned with yours.

Ok… now what?

From our experience, there are 4 key steps that you should follow to succeed in this outsourcing journey: a simple contract, engagement, a good onboarding, and well-defined goals and expectations. Let’s dissect them:

#1 Set a contract but keep it simple

A good contract is imperative for any outsourcing relationship. This is an unquestionable statement. But from our experience, there are two views on how important this piece of paper is. We call them “specification-based contract” and “relationship-based contract”.

The first believes that the contract is the foundation of the partnership. It should have an extensive specification of rights, duties, and responsibilities as well as the goals, policies, and strategies for the underlying arrangement. This approach believes that the contract drives the success.

In our opinion, this ignores one fundamental condition: change. The dynamic nature of IT demands flexibility. When you have such a strict way of working you compromise the potential result. You are conditioning the way your problem is being approached and limiting the developers work.

The second believes in the relationship itself. The contract has its place but it isn’t the basis of the agreement. This approach is focused on cooperation, common interests, and earning trust over time. The contract just provides a legal ‘safety net’.

This is the type of contract we believe in. We stand for a simple and straight to the point document, with pricing models and SLAs that anticipate and accommodate change. Rather than focus on the contract, we focus first on the business relationship, second the economic deal, and lastly on the contract itself – that should be reviewed and refreshed as business and technology dictate.

Summing up, a successful outsourcing partnership requires a well-constructed and dynamic contract that anticipates change.  Additionally, it’s important to have an experienced team, capable of managing the contract and ensure that both parties have the means to exchange views, share information, ideas, and goals. Only through these “agile” contracts and a trustworthy relationships, you can achieve long-term success in IT Outsourcing.

#2 Engagement leads to commitment

A good interaction between the client and the provider will be the basis of a long-term successful partnership. So, take time to get to know the people you are working with. It is important to put faces to names and get to know what makes them tick.

We can all agree that face-to-face communication still is the easiest and quickest way to get the message across. So, both parties should make an effort to fly out and meet the people they will work with, especially if the goal is to build a long-term project. If it isn’t possible to meet in person, organise a virtual office tour via a Skype video call, for example.

Technically, it’s a great idea to walk them through the reason why you have chosen certain technologies and frameworks for this project. This can save a lot of time for you and your outsourcing team, when it is time to find solutions to problems.

Maintaining a high level of morale is only possible when you have a great connection. Both outsourced and internal teams must feel valued and respected because this will motivate them to do their best work. Engagement leads to commitment and you need them to commit with your aims and goals. Keep that in mind!

#3 Take good care of your outsourced teams 

Once you take the time to get to know the team you will partner with, the work isn’t over. You still need to make sure they are invested in the project’s success, involved in the way you do things and aligned with what you expect from them.

Set aside some time for onboarding, just like you would do to a traditional employee. The work that your outsourced team will do, will impact your business. So, create an onboarding strategy focused on presenting your company’s structure, the contact person, and all decision makers.

 #4 Lay down expectations

Understanding the context of what your outsourced team will work on is crucial.  So, make sure you are covering basic stuff such as the project’s purpose, history, priorities, and goals. It’s easier for them to understand the “why” behind your project and what expectations you have with it.

Besides the basic information (that many times is forgotten), laying down expectations of the roles they are fulfilling is vital. In practice, this includes detailing info like working hours, the flow/schedule of a typical day, milestones, and parameters of the project, and how the project will be monitored.

Service level agreements (SLAs) are great examples. A well-designed SLA adds another layer of expectations to both sides and provides goals to accurately measure goal performance. Keep in mind that SLAs must be aligned with technology and business goals. A misalignment can have a huge impact on your project.

It all boils down to trust and communication

These steps I mentioned before are key to any partnership. However, they are useless if you don’t have trust. Although trust is hard to define, and it varies from context to context, this is another step to add to your outsourcing journey. Define what trust means to you and find common ground with your partner. This will be the basis of your relationship.

Building the foundation of trust is vital, but what will keep it is good communication.

As a businessperson, you already understand that communication is of paramount importance in any working relationship. With outsourcing teams, especially remote, it can reach a whole new level.  So, agree up front on how, why, and when to communicate. If needed, as the relationship matures, adjust it. Keep the lines of communication open and be as clear and transparent as possible.

And keep in mind – this is a process. It takes time to build trust. But, if you aim for a long-term outsourcing partnership, this is the way to go.


Effective communication motivates trust, and trust motivates commitment.

Committed teams leads to productive and enthusiastic teams!

Are you looking for an outsourcing partner? In your experience, what other steps we should take to better start an outsourcing partnership? Share your thoughts with us.


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Patrícia Peixinho

Marketing & communication lover. Curious, imaginative, ingenious. Hungry for challenges and enthusiastic about life!