Outsource Web Development Guide: Tips, Benefits & Costs

 

 

Web development outsourcing is one of the essential topics discussed among entrepreneurs on their path to success. How do you start it painlessly? How do you manage it properly? And why outsource web development when it's possible to hire skilled engineers to work with you shoulder-to-shoulder?

On average, it takes about 20 business days to hire a professional in the tech industry. That means 20+ days devoted to intense recruitment, time-consuming interviews, and process analysis to get just one software developer on board. To build an MVP of your application, your team structure should include eight team members of different roles.

Have you calculated how much time you would spend hiring your software development team from scratch? We have yet to mention the financial part of this process, where you must pay your internal (if you have such) or external (if you don't) recruiters, pay for job posting services, and other recruitment tools.

Imagine you cut this time and cost expenses significantly and have your development team working on your software product within just one workweek.

Does it sound like a dream? This can be a reality. This is what web development outsourcing brings you.

Top four reasons to outsource web development

Outsourcing is the go-to strategy for businesses of all sizes.

For example, Google outsources many of its operations even though it employs over 150.000 professionals globally. Google addresses extended workforce to cover the needs where they don't have the required in-house expertise or resources or in case of temporary projects and spikes in business needs.

Startups are no exception: web development outsourcing gives them much more scalability and flexibility than hiring an in-house team. Besides, there's a chance to cut costs considerably. For example, Groove, a SaaS platform, outsourced all of its software development to a company overseas. But it didn't interfere with the company's success; now, it is a successful business with millions of dollars of revenue.

If you still have some doubts or concerns about web development outsourcing for your particular case, take a look at these top facts about how your business will win with the outsourcing method:

1. The way to save money

Unilever, a large European consumer goods company, once outsourced its ERP system development to the experts in this field. The company couldn't dedicate enough resources to build a complex solution in-house from scratch and then support and maintain it; thus, delegating was a viable and necessary option. This step helped save $700 million annually in terms of operational activities.

Interested in how it works? Let's dive into the financial aspects.

You already know that hiring a single tech professional may take you 20 days or more. The hiring costs may vary, depending on whether you have internal recruiters working on the position or outsource recruiting to an agency. Add the paid usage of job boards, ATS, assessment tools, the temporary loss in productivity, the training and onboarding costs, etc., and you will get a figure close to $40.000 per hire, as CodeSubmit calculations prove.

In addition to one-time expenses upon hiring, your constant expenses will include the costs to run the office space and taxes, insurance, and paid leaves for your employees.

Are you impressed by the numbers? In fact, outsourcing software development helps you significantly cut costs.

When addressing a web development agency, the entire team required to complete your project starts the work within a few business days. The nice thing is that you are not charged for recruiting and onboarding the employees.

Pay per work

Looking at how to save money with outsourced web development, we should draw your attention to the "pay per work" principle. When you hire in-house specialists, you need to invest in their professional development and a convenient and inspirational workspace, and you pay a salary whether people are on vacation in Miami or at home with a headache. In the case of an outsourcing partnership, you pay only for the work done.

You pay only for the time specialists work on your project, either as full-time work or a few hours per week. And you don't pay if there are no tasks for the particular engineer.

And, if you need more engineers to speed up the development of your app, you can easily deal with it by just contacting your partner. Also, if you decide to target other platforms, you can outsource mobile app development to the same vendor. It is a fast and reliable method to scale your team.

2. A great method to focus on more critical business processes

Building a web software product is a tiny part of the enormous business architecture. A website means nothing if it doesn't attract potential users and customers, doesn't provide value or doesn't bring money. Hence, when you outsource web design, quality assurance, and engineering tasks, including web app architecture development, you allow yourself to devote indispensable time, attention, effort, and brainstorming to vital business processes. Core business operations, sales, marketing and advertising, brand promotion and PR, networking with former and potential partners, participation in different events, etc. — these activities need you and your vision of the business. And if you try hard to be involved in the engineering process and do everything on your own, you give up your chance to move your company in the right direction.

3. Access the pool of more qualified engineers

As we mentioned above, outsourcing is so popular that even the world's IT frontrunners do not deny they work with overseas partners. The idea was born long ago, and it covers a variety of industries. Hundreds and thousands of engineers in different locations use the outsourcing concept. For example, a single small IT outsourcing company with up to 20 engineers can deliver 10+ small projects or 2+ large projects annually. Each software development specialist has tried different tools and technologies, followed different tendencies, and worked according to different methodologies. Thus, web developers and designers involved in outsourcing have more solid experience than those working on one product during their careers.

A stronger team means a better product. Isn't it a chance to outpace your potential competitors with a striking web solution?

4. Higher development speed

Earlier, we found out that opting for in-house development takes you upwards of three weeks (or even more) to hire your first developer. When a team starts working together in the office, it takes 2–4 weeks to arrange all the processes, set up the workflow, and start working. After that, sick leaves, vacations, and other unpredicted obstacles may appear in a team calendar. As a result, you fail to complete sprints and launch a product on time. A potential competitor rolls out a similar software solution several weeks earlier and gets all your potential customers' money.

Web development outsourcing allows starting right away as you hire dedicated developers. Signed agreements create strict time frames: You have the assurance that everything will be delivered on time and that your team will meet deadlines.

Due to the more in-depth experience we discussed above, the outsourcing team can estimate the project more precisely and build a solution of better quality in comparison to in-house engineers with a narrower specialization.

Money, focus, talents, and time — these are four core things you win by opting for web development outsourcing.

How to outsource web development

Web development outsourcing is a multi-component process that eventually takes you to your desired business goals. To start it properly, you need a clear, well-defined guide with a brief but informative description of all the processes. Here it is.

In this chapter, we will closely examine three essential steps in web development outsourcing.

Step 2. Define your goals

Where will you arrive when you don't know where to go? What will you achieve if there's nothing on your wish list? Before starting any custom software development process, you need to know clearly what you want with this solution.

• Is it a web app that will simplify people's lives, like a babysitting app? Or a convenient CRM? Or a task management system with advanced and unique features?
• Is it an app for entertainment?
• Is it a social network web app?
• Is it a brand-new messenger for either personal or corporate communication?

No matter what industry you plan to shake up or what app to launch, you need to build your vision of a perfect solution and decide how to explain it to your future web development outsourcing partner.

• Start the project discovery phase. At this stage, you have to research your target audience, create a buyer persona, understand the industry landscape, and set your business goals.

• Form your app requirements and describe in detail what outcome you expect from the development process.
• Conduct quick research to be aware of the top web development trends and technologies and the state of the market.
• Think about interviewing: What questions to ask when outsourcing web development to an agency? What field and technologies would you like the outsourcing provider to be proficient in?
• Define the price range you are ready to pay to outsource web app development successfully.

That's a to-do list to deal with before proceeding to stage 2.

Step 2. Search and find your skilled web development outsourcing partner.

Now that you know what you'd like to build and how much you are ready to invest in it, it's time to choose a software development company to help you with your agenda.

The software outsourcing industry is huge! Thus, finding a reliable partner with high responsibility, good communication skills, and solid expertise in the industry you plan to change with your web app may be challenging.

To simplify this task, we will consider two critical aspects of your search process: destinations to outsource web development work and platforms where you can find a competent firm.

Top destinations to outsource web application development

Are there the best countries to outsource web development? Unfortunately, no. But there are several options you should consider when outsourcing web development:

• Onshore web development outsourcing

In this case, you outsource specific tasks and services to a web development agency based in your country. For example, if you run your business in the US, you outsource software development to the US company, too. Depending on your location, this option may be extremely costly but still effective compared to hiring in-house programmers.

• Nearshore web development outsourcing

In this case, you delegate your project to a country based on the same continent as you. The main convenience of this approach is minimal time-zone difference. For example, for US entrepreneurs, nearshore outsourcing is an agreement with a team based in Mexico. If you are based in the United Kingdom, you should look closely at Portugal or outsource software development to Ukraine.

• Offshore web development outsourcing

This means that your outsourcing agency is thousands of miles away from you, on another continent, or even in the other part of the world. Although it may look challenging to cooperate with someone based so far away, in the IT world, using modern communication and task management software looks the same as onshore or nearshore outsourcing. Two famous regions for offshore software development are Asia and Eastern Europe. However, if you mind the cultural differences, you would prefer to hire Ukrainian developers, compared to their colleagues from India, for example.

Top platforms to find the best website development outsourcing partner

So, you already know what country you'd like to outsource to. However, finding the perfect software partner is not a piece of cake. A bit of your time and a detailed guide on how to outsource web app development and build a prosperous partnership are essential. Fortunately, we have that guide.

This chapter will draw your attention to some popular online platforms to start your partnership.

• Clutch

This is a valuable source of information about the best companies in a specific location or with a focus on a particular industry. The platform uses a ranking algorithm that analyzes industries, areas, countries, reviews, and achievements to provide users with reliable data about the best outsourcing teams. Here, you can find out the opinions of previous clients and get acquainted with website development services and portfolios to pick the best partner.

We are happy to note that Clockwise Software belongs to the top B2B Companies in Ukraine, according to Clutch.

• LinkedIn

This is a network for professional connections. You may already have your profile there, so it's time to fill all the blank spaces, grow your network, join communities of interest, and get acquainted with IT agency representatives who are ready to offer their web development services.

• Upwork

On Upwork, you can find independent specialists and experienced web development agencies. Unlike the previously mentioned platforms, you must invest money in your Upwork business account. The platform also charges a fee for the successful deal: each time you send money to your partner, the platform charges 5% of the price.

Screening process: How to choose the best web development outsourcing partner

Make a shortlist of the outsourcing web development companies you are interested in. Creating a spreadsheet is the most convenient way to analyze their strengths and weaknesses. Consider the company's size and portfolio of projects, as well as their complexity and quality, number of specialists, prices for services, technology stack, and former clients' reviews. Then, start the interviewing process. Here is what you have to pay attention to during your interaction with the web development outsourcing company representative:

• Communication skills

Here, we mean both small talk at the beginning of the video conference and their ability to listen actively and ask sensible questions. Ensure your potential partner shares their opinions openly and describes previous experiences simply but using proper technical vocabulary. Remember that you will have to interact with this person during a significant time. Is such a communication style ok for you?

• Internal processes

Ask questions about the outsource web development company. How did the company start? Do they have an office, and if so, how does it operate? What is their remote work policy? How do they hire new talents? These all are the questions that may matter for your collaboration. It would help if you also learned how they organize the development process. There are different methodologies: The Agile approach and Scrum framework are considered the most efficient.

• Portfolio, CVs, and code samples

Include the topic of previous experience in your conversation. If you are a tech-savvy person, code samples will tell you much about troubleshooting skills, refactoring processes, and the overall quality of projects. If you are not, check the previous web-based applications of the development outsourcing company.

• Price

You may start comparing the hourly rates of the outsourcing companies, but there may be better criteria since each company may need a different amount of time to complete the exact scope of work. Choosing the company with the lowest hourly rate may result in longer development time and, therefore, higher costs.

Instead, it would help if you asked the web development outsourcing companies from your shortlist for an estimate. After you provide your project brief, the tech specialists of the company will give you the approximate time and cost estimate. This information is more reliable than the hourly rate.

Additionally, a software company may offer tips to reduce software development costs. Their experience with similar projects may be helpful for you.

Step 3. Outsourcing web development: Set up the process

Once you've chosen a team to whom you will outsource web app development, it is time to set up the process and delegate the routine engineering tasks. No doubt, you should keep an eye on product development. With our recommendation on how to do it, you will be fully aware of significant things without devoting too much time to this.

Discuss with your partner the tools you will use for your project for communication and task management.

Team communication

The tool for sharing messages, online calls, and conferences is essential. Seamless communication between teammates is your secret to a high-quality project.

Tools you may like:

• Slack
• Discord
• Microsoft Teams
• Zoom

Task management

A task management tool is essential in different startup development stages. It helps your project manager maintain the app creation process and gives you an overview of the team's progress. The task management tools we recommend here are perfectly suited for the scrum approach and allow to assign the task to a specific team member, change its status, set the deadline, and track all task changes.

Tools you may like:

1. Trello
2. Jira
3. Asana

Leave all the rest to your development partner. The IT outsourcing company you've chosen is fully aware of the web design trends and recent tendencies in the web development market, knows about cloud storage and programming language, or knows what test automation tools will be the best for your product. Once the process is up and running, focus on your business goals and start raising your empire.

Costs to outsource web app development

At the beginning of this article, we mentioned reduced app development costs among the benefits of outsourcing IT services. In this chapter, we will take a closer look at the required budget.

Factors impacting outsourcing costs and timeline

Outsourcing teams adhere to the pay-per-work model. This means the hours invested in app development directly impact the final price. And the number of hours depends on your work scope and team composition.

Scope of work

The complexity of your application is the number one factor that influences the time and cost of web app development. That's why, during the discovery phase, you work closely with the business analyst to define the core functionality of your future MVP (minimum viable product) and the approaches to build it. For example, your vendor can offer you to build a single-page application to reduce development time and still provide a flawless experience for your users. As a result, you reduce your budget for initial app development and can launch your app sooner. Later, you can improve the product and add new features.

Team composition

The final cost of your app will also depend on how many professionals work on your app. The minimal team should consist of just four specialists. But if you are serious about your web application, you might consider an extended team consisting of:

• Project manager
• Business analyst
• UI/UX designer
• Software engineers
• Quality assurance engineer

Involving these specialists in your product development doesn't mean they have to work on your app from the beginning until release. One of the best things about outsourcing is that you pay only for the actual involvement of the specialist in the project, unlike the full-time employees you hire in-house.

Outsourcing rates by destination country

The final variable in the outsourcing cost calculation is the hourly rate of your vendor. They vary from country to country but may differ even for agencies in the same city. According to Clutch, these are the approximate ranges for app development outsourcing in different regions of the world:

Northern America - $100 - $149

Australia - $100 - $149

Europe - $50 - $99

Southern America - $25 - $49

Asia - $25 - $49

Of course, the hourly rate significantly impacts the final price of your web app development. However, choosing a company with lower rates doesn't automatically result in lower costs for the end product. The team's experience, technology stack, and organizational approach matter a lot as well. Sometimes, the final price of the app built by a company with a $50 hourly rate may be lower than the one developed by a team that charges $25 per hour.

Approximate costs to build a web application from scratch

Our experience shows that the approximate cost to build an app from scratch and launch it is around $100,000.

Of course, the scope of work and the team composition may impact this price. Any outsourcing company would give you a precise time and cost estimate after you provide a project brief and share the details of your desired app.

If you want to learn more about this topic, we have an article on how web app cost is calculated with examples of apps. For a detailed estimate for your project, please leave us a request in the form below.

In conclusion

The pros and cons of outsourcing software development vary from project to project. Something other companies find irritating may become one of the main advantages of outsourcing for your case.

This proves that all businesses are different, just as their preferences, expectations, and even communication styles. This means that no one company will be a perfect fit for every outsourcing contract.

You have to start by formulating your goals. This will help you to define strict criteria for your outsourcing vendor.

And one more thing. Consider outsourcing a partnership. This should not be about you assigning tasks, setting deadlines, and your vendor coding. Prepare for tight cooperation, where both sides care about the final product and contribute with their best intentions. This is the most rewarding type of outsourcing.