What is a software house, and why does your outsourced development team matter?

When was the last time you had a challenging project at work and simply didn’t know how to tackle it? Was your solution to learn how to tackle it? To hand off the project to a coworker with the necessary skills? To scrap the project all together? No matter the solution, one thing is certain: roadblocks happen to everyone.

You’re bound to run into roadblocks throughout your life- especially in the software development field. From fighting bugs daily to keeping up with ever changing code requirements, software developers are no strangers to roadblocks in their work. For many, these roadblocks are able to be overcome with diligence and an experienced in house development team, but for others, these roadblocks are critical errors that prevent business goals, such as meeting deadlines and launching a product to market, from being achieved. That is where software houses come in. 

Not a new concept whatsoever, the concept of outsourcing software development has gained traction over the past few years because of the immense value it provides to interested parties. For those familiar with the practice, outsourcing software development is exactly what the name entails; allowing outside parties to create projects and software for your company in exchange for a commission, typically on the basis of full project pricing or hourly pricing. To outsource software development means to either outsource to independent contractors or to a software house- a company dedicated to building software depending on their clients. 

From building custom web applications for businesses, such as e-commerce platforms, content management systems (CMS), and customer relationship management (CRM) systems to developing applications that leverage artificial intelligence and machine learning, such as recommendation engines, chatbots, or predictive analytics for e-commerce companies,, software houses can address most tasked projects (given the right software requirements and pricing, of course) and give the companies they’re working for extra freedom to focus on non-development tasks. 

Software houses and other outsourcing companies empower companies to embrace more agile and flexible structure to their development, but also present many potential problems. Working with software houses will depend heavily on your individual business needs, desired agility, and specific project timelines.

The Different Types of Software Development Outsourcing

Like many outsourcing options, software houses offer different ways of approaching software development that work with every facet of business. To start, there are four primary types of software outsourcing:

• Homeshoring: Hiring an outsourced software development team within the city or country you’re located in
• Nearshoring: Hiring an outsourced software development team located in a nearby country
• Offshoring: Hiring an outsourced software development located in a distant country
• Onshoring: Bringing a hired outsourced software development to the country you’re located in

Each of these options offer different benefits towards your company and project; whether your primary goal is saving the most amount of money, being the most efficient, or having the best communication throughout your project duration. For example, homeshoring, nearshoring, and offshoring would be employed if you’re looking to reduce costs and turnover while increasing developer flexibility. Onshoring offers you direct communication pipelines, better compliance to local guidelines and requirements, and overall stronger code quality control and assurance.

With that, there are also three different outsourcing models to choose from:

• Staff Augmentation: An outsourcing model that brings temporary staff into your company to handle certain day to day tasks and bring projects to completion
• Dedicated Team: Software houses handling the entire commissioned project, and future projects if accepted
• Project Based Team: Outsourcing teams are based on the project commissioned, ranging from the timeframe of a certain deadline to the entire duration of that project

Again, these options offered unique benefits to your company: staff augmentation offers a full-time, contracted developer that may transition to a full-time role if suitable, dedicated teams provides the agility of classic outsourcing teams while offering the reliability of augmented staff, and project based teams are more budget friendly and a hyper specific to your individual code and business needs.

Why Do Companies Outsource Their Development Tasks?

In house development often requires experienced developers, competent project and product managers, and a powerful north star goal. These development tasks are often sidelined by internal infrastructure fire fighting, increasing bug killing, and endless code reviews. That being said, outsourcing development provides companies tons of benefits that extends outside of just fixing infrastructure and eliminating bugs, benefits like:

Filling a Technological Gap

Tech stacks are unique to every company, while the internal team at one company may be skilled in Python, they could also be severely lacking expertise in other languages. Depending on what you’re looking for, software houses might be able to provide more utility, agility, and flexibility with development. More experienced developers can also offer great insight to new technology and new perspectives on development problems that an in house team might struggle to formulate. With this in mind, outsourced development might be the best solution to streamline development while removing the need to learn complex languages or unfamiliar tech.

Optimized Development without Expanding Headcount

For companies like startups where every penny counts, outsourcing development can be an extremely viable option as you’re no longer forced to expand your headcount. According to Indeed, the average salary for a web developer in the United States is $81,565, with the ideal development team for a startup being 5-7 developers to promote faster and quality work (depending on their experience). For web developers alone, you’re looking at $400,000-560,000 in salaries alone- a number that might weigh heavily on a startup. An outsourced team might provide stronger industry experience at a fraction of the cost, and while an in house team is certainly beneficial, startups looking to expand or make the most of their runway before fundraising might benefit more from an external team. 

This method of development can be extremely agile and flexible as well, as third party teams only need to focus on accomplishing your project.

Saving Time for Stronger Developer Focus

In house developers are often frontloaded with projects coming from left and right, leaving them little time to focus on a single project and deliver quality code. 

Working with an outsourced team gives the freedom back to in house developers, allowing these developers to focus on core business projects. With a separate team dedicated to a single project, companies can also expect quality work with a faster turnaround time, making outsourcing a viable option for companies that want to stay on top of their development schedules.

Like mentioned above, companies no longer need to brief and train their in house teams on the languages and technologies required. Third party developers will come well equipped with every competency needed to complete a certain project, letting them code without any introductions or barriers.

Whether your focus revolves around saving more time and money, or to address a certain skill gap demonstrated within your internal team, outsourced development teams are always a viable option for project building.

The Disadvantages of Outsource Software Development Services

While employing the help of an external software development team provides a plethora of benefits for companies that choose that route, it can also pose a ton of challenges. Some of those challenges include:

• Security risks
• Contact loophole leveraging
• Potential for turnover within key development players

However two of the biggest challenges when outsourcing are failure to uphold quality code standards and communication barriers.

Failure to Uphold Quality Code Standards

Quality over quantity- in most cases this motto is true, and software development is no exception.

There’s an unspoken guideline within software development about the quality of code- certain benchmarks like line amounts, code block segmentation, avoiding deep nesting, and other standards set the mark for what good code looks like. Depending on the supervision that you’ll employ towards a third party team, you could have a completed project, but the code behind it could be in shambles. This could especially bite you post-launch, as updating and maintaining the completed project could be a strenuous task for your in house team and can even require a large time commitment.

When working with a third party development team and defining your outsourcing relationship, it’s important to define the quality of code you want to see in your completed project; everything from languages used to nesting should be at your discretion, though allow for some flexibility within development. It’s important to define what you’re expecting, but also what the team is capable of within a certain timeframe. 

Communication Barriers

Today, the workplace is loosely defined. Ranging from in-person to hybrid to fully remote teams, companies today can have a hard time wrangling their workplace because of certain communication barriers. While internal communications can be difficult to manage at times, companies often find ways to optimize communication despite their circumstance, making even the most scattered remote team into an efficient workforce through apps like Slack and Microsoft Teams. 

A critical challenge of outsourcing development is upholding efficient communication between business stakeholders and developers. Communication between internal and external teams can be strained for a variety of reasons, some of the most common being language and cultural barriers, intense time zone differences, and individual communication etiquette. These challenges can lead to coding and progress difficulties, project vision misalignment, inability to meet business needs and deadlines, and so on.

Combatting communication challenges can be as simple as creating communication guidelines and expectations for external teams, or as complicated as employing multiple project managers to ensure that there are no lapses in communication. One thing to be cognizant of is communicating the project timeline properly- be sure to clearly define key milestones and deadlines while scheduling check-in meetings throughout the project timeline. In addition, employing a project manager or a project management team that is fluent in the majority language of your external team and is well versed in their work culture and yearly traditions is crucial as work is defined differently all across the globe. 

The debate of in house vs outsourcing software development will depend wholly on your own business needs and desires within the development process- both methods provide tons of benefits and clarity within the software development process, but can also become muddled without the right care. If you do choose to outsource, there are some things you should consider before signing.

How to Outsource Software Development - Points to Consider

Like most business initiatives, work with an outsourced team requires introspection and clear decision making, especially because the team’s work influences business performance. Here are some things to consider when working with a software house:

Asking Yourself the Hard Questions

Working with a software house requires some deep business introspection, asking yourself and decision makers questions like:

• Why are you looking outside for development?
• What are your individual business requirements and internal goals?
• What are your project requirements?
• What is your current project timeline?

Can make all the difference between a positive outsourcing experience and a negative one. 

Like the section above, determining what the outsourcing software development pros and cons are beforehand is critical- for example, if your development can be stronger at the expense of a longer timeline, would you take this opportunity? 

Finding the Right Company and Team, Based on Your Needs

Deciding to work with a software development company or a freelance team is just the beginning of the process. With so many different coding languages, competencies, and product/project management capabilities, finding the right software development outsourcing company can be like entering a dating show- each company with their own pros and cons. 

Attributes to look for within these software houses or freelance individuals and teams can vary based on your own needs, but typically clients look towards developer experience, previous customer reviews, and language proficiency offered by the team as a benchmark. Companies that can provide a case study on their developer experiences is also a huge plus. This extends towards the developer’s receptiveness towards using new tech within a project and overall familiarity with your tech stack.

Working with a software house can also require the need for project managers and product owners- individuals able to create benchmarks and hold accountability for project progress. On the topic of managing outsourced teams, be sure to sit down with the team and break down specific benchmarks and requirements they need as well- communication is key in this process and great communication goes a long way.

Along with developer competence is your personal budget. How much are you willing to spend on a certain project and how much is the company or team charging per project/hourly? Depending on where the company is located and what services they offer, outsourced teams can charge anywhere from $20 to $200 hourly, especially depending on the project scale and time needed. 

Company Security Policies

As the name suggests, safeguarding your internal security is everything. 

When working with an external team, reviewing your internal security policies and increasing security strength should be your top priority. Specifying these policies, requiring NDAs, and increasing security countermeasures are just some of the steps your company can take to prevent any vulnerabilities from being leveraged when working with a software company. 

Software Innovations with Lyrid

Whether you’re content with handling all of your development in house or looking to outsource, it’s important to know the benefits and challenges that both options present. Working with software houses and outsourcing software development can provide powerful, cost and time-effective alternatives to traditional in house work. Despite this, outsourcing can create new challenges for in house teams to tackle, as well as potentially create new headaches. 

At Lyrid, we’re empowering software houses to create industry-grade code and solutions, as well as competitive pricing packages, through our platform. Quality code coupled with a powerful infrastructure to back any apps and solutions sounds like a dream come true, and we’re working towards making that dream a reality. As a software house working with Lyrid, you’re able to access the Lyrid platform and solutions and receive cross selling and cross marketing opportunities- similar to those received by Rapier Technologies. In addition, expanded market reach and entry into a global tech ecosystem are just the beginning of your benefits! 

If you’re looking to learn more about how to best leverage software development services, or if you’re a software house looking to work with Lyrid, book a call with us!