Your organisation may be experiencing an overflow of app projects. Or it may require a helping hand to speed up its internal app development processes. You can reduce your workload by outsourcing.
When you outsource app development, you cut down the time and cost needed to develop quality mobile apps. According to Statista, the global outsourcing market in 2019 amounted to more than $92.5 billion.
If you have yet to try app development outsourcing for your business, our comprehensive guide will cover everything you need to know.
Why Should You Outsource App Development?
Of course, having an in-house team has its benefits. But the problem is, when your company faces downtime, you have to keep paying your in-house team. With outsourcing, you can hire a team only when you need one.
Let’s look at some of the notable benefits of outsourcing your app development.
1. Reduced Costs
When outsourcing app development to locations such as India or Eastern Europe, the costs will be significantly lower compared to those in the US or UK. This is primarily due to the differences in living expenses.
The founders of Whatsapp, Jan Koum and Brian Acton, had just a small amount of seed funds – $250,000 to be precise. They had to keep their development costs to a minimum. As a result, they outsourced the app development to a group of developers in Russia. Interestingly, Whatsapp was acquired by Facebook in 2014 for $19 billion.
If you outsource app development, you don’t have to face the hassle of recruiting and training employees. The outsource development company will take responsibility for it. You will get a ready team with substantial expertise in development (if selected properly).
The mobile-focused ticket platform SeatGeek outsourced their app development, which helped in building the infrastructure faster and at a lower cost. The company processes around $1 million in transaction value per day.
3. Access to Skilled Expertise
For completing specific app projects, you may not have the right resources. In such situations, turning to app development outsourcing can get the job done.
The business communication platform, Slack, is a prime example of how hiring an expert outsource team can redefine the app’s success. Slack outsourced its mobile and web development to MetaLab, which designed the app’s iconic logo and everything else that the users interact with. MetaLab, with its intriguing design capabilities, helped Slack stand out in an already saturated market. Today, Slack is valued at nearly $25 billion.
4. 24 x 7 Availability
If your company is headquartered in the US, then outsourcing parts of your business processes to companies in countries like India can keep your business running 24 hours a day. Due to the differences in time zones, you can outsource the technical support of your company or a part of your development team, to work round the clock.
American Express outsources its customer service to India. By doing so, the company manages to stay available to its customers 24×7. This association brought several international trade benefits to the company as well.
Things to Keep in Mind While Outsourcing App Development
If you are thinking of outsourcing your app development, several factors need to be considered for making this partnership a successful one.
1. App Requirements Outline
An established outsourcing company will do additional research into your app’s requirements. But you need to at least outline what you need your app to do. This will help you convey your vision to the outsourcing company, and track the progress of each component’s development.
To outline your app’s requirements, ask yourself the following questions:
- What is the intention of the app?
- How can your app solve users’ problems?
- What are the core features?
- Do you want an iOS or Android app, or both?
- Are you planning for a cross-platform app?
- What’s your expected time frame for developing the app?
During the initial days of GitHub, a software development platform, the company wanted to hire Scot Chacon, a Git expert, but didn’t have the funds to recruit him as a full-time, in-house developer. So the company chose Scott as a Git outsource contractor. In 2018, GitHub was acquired by Microsoft for $7.5 billion.
Depending on the amount of money you can invest, the number of companies to choose from varies. But never just prioritize low cost app development as it might affect the quality of the end-product and would kill the purpose of outsourcing in the first place.
Some app development companies offer a money-back guarantee policy. If you partner with such companies, you don’t have to pay unless you are satisfied with the product.
3. Time Zone
If your office is in the US and you are outsourcing to India, then the time zone diff might be a bit hard to manage. For example, If it’s 9am in Washington DC, it will be 6.30pm in India. Due to this, you will only have a small window of time to communicate with each other in real-time, other than through emails.
There are several accounts of entrepreneurs who faced challenges while outsourcing to an entirely different time zone. If you feel it might be a problem, outsource your requirements to a closer country; that way, there will be minimal time differences.
An experienced team might seem costlier at first sight. But they will be able to provide high-quality codes, with fewer bugs and that too within a short time, unlike an inexperienced team.
The best thing to do is to describe your requirements and goals. If the team can provide additional inputs to your project on how to make your app even better, then the team will be worth considering.
For example, if you request for a navigation bar in your food delivery app and the outsourcing company suggests an advanced filter for it, then it shows the expertise they have in the domain.
5. Communication is Key
The purpose of outsourcing is to ease your efforts in development. If the team you choose fails to communicate the updates of your app’s progress in a timely manner, then you might find it challenging to catch up. You can use a tool like Trello or Basecamp to make the project management more efficient.
While choosing an outsourcing company, the best thing to do is understand the culture of the company, and select the one that best matches your company’s culture. Cultural differences play a significant role in the success of outsourcing. In Western countries, saying “no” is just a manner of planning what’s feasible. In Asian culture, saying “no” to a client’s request is seen to be traits of incompetence.
But the problem is, saying “yes” to unachievable requests can result in the failure of setting clear expectations and missing deadlines.
If an outsource app development team says “yes” to even vague feature requests of yours, there is a chance they haven’t fully understood your requirements. If the outsourcing team keeps saying “yes” without any questions regarding your requests, it is better to stay away from them.
Also, developers in countries such as Malaysia, China and India find it easier to work if they are given strict processes and well-defined tasks.
6. Quality Over Quantity
Just like selecting the cheapest team, you may be tempted to choose “full-stack” developers, who are jacks of all trades. But this will affect the quality of your application.
Full-stack developers are developers who can handle a multitude of work related to web, mobile, cross-platform, servers and so on. For example, if you choose a team of full-stack developers to build an iOS application, they might be able to do it for you. But the code quality will vary from what you can receive from a pure iOS developer.
7. Non-Disclosure Agreement (NDA)
It is up to you whether your project needs a Non-Disclosure Agreement. But to be on the safe side, it is always advised to have one.
You can try a free NDA form by clicking here. You can download the form and modify it to your specific needs.
8. Post-Launch Support
This point can’t be stressed enough. Many outsourcing companies will provide technical support until your project’s completion. But it is best to choose an organisation that allocates a certain amount of man-hours for technical support post-delivery. You can also allocate a part of your budget for post-launch support.
Having post-launch support will help you remain stress-free if the project runs into errors after development. Companies offering post-launch support are more likely to invest more time in developing quality codes. Otherwise, they will have to put more effort into fixing bugs post-delivery.
There will be several overlooked functionalities that need further tweaking. You might find this only after app launch. In such cases, post-launch support can work to develop them.
How to Outsource App Development?
While there are “n number of ways” to outsource app development, let’s look at the major steps to make the alliance a fruitful one.
1. Search for a Company
Once you have a clear idea about your app and a budget, take the next step of searching for an app outsourcing company.
The best places to start your search:
2. Research / Examine the Company
The above websites will give you a glimpse of mobile app development outsourcing companies. In some cases, the companies might rank high in the list because they paid to be featured. So the best thing to do is research on your own.
Look at the company’s website, social media handles and reviews. Look at how satisfied the previous clients are with the service. If the outsourcing company has some live examples to showcase their competence, then it’s a major plus.
While researching, keep the following parameters in mind to judge the company better.
a) Niche Experience
Companies with experience in developing apps like yours will speed up the development process. For example, if you are planning for a finance app, search for an outsource app development company that has made similar apps.
b) Technical Expertise
c) Good Project Management
The company must have proper project management methodoligies and quality control strategies. Failing to have one is a sign of its inexperience.
d) Client Management Approach
This step is unavoidable if the company works in a different time zone. Research on the mode of communication the company offers. Also, make sure there is only a single point of contact, like a project manager, for all your queries and feedback.
e) Client References and Live Samples
You can ask the company for client references and live samples of their work. If they fail to provide them, you should reconsider your choice.
f) IT Infrastructure Check
You can ask the company about their infrastructure and technical capabilities. This will help you assess whether the company adapts with changing technology and has reliable technical resources to complete the project.
g) Assess the Workforce
Cultural difference is a primary concern while outsourcing. Make sure the team glues with your organisation’s beliefs, values and mission.
Also, look at the policies on how the team is set up. Make sure the team holds the knowledge and expertise your project requires.
You can use the following websites to gain more information about the company:
Quora – Get to know the pros and cons of the company.
Crunchbase – Access information about the company’s founders, fundings and leadership positions.
LinkedIn – Get more information about the employees and the company’s progress.
3. Discuss Your Requirements
Outsourcing is never a one-sided project. Once you find an ideal outsourcing partner, the next step is to discuss all your requirements. This will open the windows to understanding the company better and set an expectation bar.
If the company accepts even your vague features, then they are most probably inexperienced and taking up the project just for the money.
Before getting into an agreement, clarify the following aspects:
- The time frame for delivering the app.
- Mode and frequency of communication, along with clarity on a single point of contact.
- Hidden costs.
- The clarity in the NDA and the consequences of losing your sensitive data.
4. Choosing the Team Members
Once you are done discussing your requirements and expectations, you have to decide the number of people who will work on your project. In most cases, the company will suggest several packages.
Remember to ask for a single point of contact, like a project manager. Otherwise, outsourcing your app development will be stressful if you have to communicate with multiple team members there..
5. Project Plan (Milestones)
Along with discussing the project requirements, you must plan for development milestones. Milestones make it easier to track progress and analyse the capabilities of a company. If the company fails to meet deadlines in the initial phase, then you can judge whether they are worth your time.
You can download an Excel template for project timelines with milestones here.
The outsourcing contract depicts your collaboration legally. Along with every single detail of your expectation from the company, the contract will also hold information regarding timelines, quality parameters, costing, and other crucial information.
The following are the main components of an outsourcing contract.
a) Detailed Project Scope
A detailed project scope describes the service you are getting from the outsource app development company. You can attach the Request For Proposal (RFP) along with the response from the company in the contract.
b) Service Level Agreements (SLAs)
The SLAs are used to get service guarantees from the company and it sets the benchmark for quality. This would help in maintaining a consistent quality of service throughout the project.
c) Transfer of Assets
You must note down the transfer of assets if the outsourced project requires it, such as computer hardware and software licenses. An agreement will record these transfers.
There may be extra costs associated with asset transfer. Make sure you consider this while framing the outsourcing cost.
d) Project Warranty
There are several uncertainties associated with outsourcing app development. The company may breach the agreement and can lead to the loss of your time and efforts. It is always good to mention the terms for loss recovery in the event of a breach.
e) Product Ownership
While outsourcing, the complete ownership of the source code, final application and intellectual property must be solely yours. To avoid disputes, it is advised to specify the absolute ownership of the end product under your company.
f) Intellectual Property (IP) Clause
One of the biggest scares in outsourcing is the company stealing your trade secrets. To never let that happen, make sure the agreement covers complete IP protection. You can also use the following to protect your intellectual property:
- Patent protection
g) Payment Structure
The agreement must hold information on when, how and to whom the payment is to be made. Along with that, the app development cost breakdown must be specified. There will be both fixed as well as variable price components in the project. Make sure you include them as well.
h) Duration for Completion
The duration of an outsourcing contract can define the success or even the failure of your project. To put that in perspective, look at what happened to the BBC.
In 2004, BBC signed a ten-year contract with Siemens Business Services for a hefty sum of $3.6 billion. The contract restricted the BBC to outsource its IT services to only Siemens and no other companies. Although the BBC was not satisfied with the services, they had honour the contract and continued paying Siemens.
It is best advised to sign a contract with a shorter duration and extend it if you find the service up to par.
i) Dispute Resolution
Relying on an external team for app development can give rise to several disputes. To deal with such unfavourable situations, it is advised to include a third-party arbitrator into the contract.
j) Subcontracting Clause
When you outsource app development to a company, will they in turn outsource your requirements to other parties? The subcontracting clause covers this aspect, and you can either allow or deny subcontracting.
If you allow subcontracting, make sure you get information on the components that are subcontracted, along with details of the external parties involved.
k) Indemnification Clause
Several legal issues may arise when you outsource app development. Include an indemnification clause to protect your company from incurring any losses that may arise due to the outsourcing company’s negligence.
l) Exit Strategy
The exit strategy holds information regarding the termination of your relationship with the outsourcing company. You must specify when and how the termination will occur. While preparing the exit strategy, keep in mind the following questions to frame the section better.
- What assets would be returned to you?
- When would these assets be returned?
- Who would have the rights to the software?
Documentation covers all written documents relating to an application’s development and uses throughout the software development life cycle (SDLC). It explains the application’s functionality and presents project-related information.
Software documentation is divided into two categories:
a) Product Documentation
It describes the product and offers instructions on how to perform each task. It can be further divided into:
System Documentation: It describes the system, and its parts. It also includes requirements documents, program source code, help guides, design decisions and architecture descriptions.
User Documentation: These are the manuals prepared for end-users and system administrators. User documentation will include tutorials, installation, troubleshooting and reference manuals.
b) Process Documentation
It represents all documents involved during development and maintenance of an application. Process documentation includes reports, meeting notes, project plans, and test schedules.
Documentation makes it easier to discuss the components of an application in-depth. Make sure the outsourcing team documents without fail.
Avoid upfront payment. It is always advised to pay as per the cost breakdown and milestones achieved. This will save you from losing much money if you find the service not satisfactory and would like to end the contract.
How Much Does It Cost to Outsource An App Development?
Average Cost to Develop an App on Different Platforms in Different Countries
Cost and Time Estimate to Develop Specific App Features
Industry Estimates for Common App Types
In-House vs Outsource Team
With an in-house team, you will have full control over an app’s development process and the communication will be easier. The team will also know your business, inside out. If your businessis cooking up something revolutionary, then having an in-house team is a must.
But, an in-house team will be expensive to manage. You have to provide the team with a workspace and pay them even if you don’t have any projects. Along with that, a fixed team will have a limited set of knowledge and experience.
That’s where outsourcing comes in.
While outsourcing, you get access to a wide range of skills at cheaper rates. If you face some challenges while working with them, you can always move out of the contract. This way, you are safe from any form of long-term commitments.
Outsourcing App Development Risks
Several factors must be considered to make sure you have a smooth experience outsourcing. Let’s look at the major risks associated with outsourcing.
1. Time Zone
Different time zones can be a villain of outsourcing. If your company is in the US and you are outsourcing to India, there is a notable time difference. You will only have a small window to communicate in real-time.
Since the team will be working thousands of miles away, there are chances of misinterpretation of instructions. But with a single point of contact and proper documentation, miscommunications can be avoided.
3. Cultural Differences
Working with a team located on the other side of the world can reveal several differences in culture. For example, Asian developers may try to hide problems in fear of punishment. Also, they may be reluctant to say “no”.
To ensure a smoother development process, choose a company with a clear set of culture codes. Also, try to treat the outsource team like an in-house team.
4. Information Leakage
While outsourcing, you will likely have to share crucial information with the team. There are chances for data leakage. To avoid that, follow strict guidelines while preparing the NDA. Also, research more about the app development company’s credibility.
Tips for Successful App Development Outsourcing
Successful app development outsourcing is where you get the job done within the said time, and without any compromise in quality. Let’s look at some best practices that will ensure you outsource your app development with success.
- Always look for outsourcing companies that keep up with changing trends in technology. Never associate with ones using outdated technologies.
- If possible, start with a short-term project and then extend the agreement.
- Follow strict guidelines while preparing and signing the agreement. Make sure there is no restrictive clause that binds you to the contract.
- Provide detailed specifications and your expectations for the project.
- Ensure the end product has well-defined documentations.
- Make sure all your IP rights are protected.
- Make sure the time zone differences, if any, is manageable.
- Go for quality rather than quantity.
- Set milestones throughout the project and make payments accordingly.
- Test the app for perfection.
App Development Outsourcing in a Nutshell
By outsourcing app development, you can cut costs and save time to a great extent. Outsourcing is suitable for all types and sizes of businesses – from startups to MNCs.
To make the best out of outsourcing, make sure you look at a prospective company’s reviews, portfolios and previous clients. The best way to know a company more is through a thorough discussion with them. Make sure you express all your expectations.
Once you choose a company, put more thought into the agreement and payment model. Stay safe by having an exit strategy. As outsourcing involves no long-term commitments, you have the freedom to choose the best for your app.