How to save the outsourced app development cost and establish quality guarantees in advance
In 2009, Apple had published an iPhone 3g commercial with a catchy slogan “There’s an app for that,” which was trademarked by the company later in 2010.
During that time, there were over 250,000 apps in the App Store. Today, there are 2 million apps in the world according to the information from the app stores both for the iOS and Android products. And these are only mobile apps.
There are no exact statistics on the total number of cloud-based web applications in the world, but there are stats on the number of users. According to Statista, the number of consumer cloud-based service users worldwide has grown from 2.4 billion in 2013 to 3.6 billion in 2018.
Today, the “There’s an app for that” slogan has become a buzzword, meaning response to someone else’s problems, as per Urban Dictionary. In other words, it is possible to solve any problem with an app today – and this is probably true.
There are mobile apps for almost everything and in any industry – be it real estate, healthcare, insurance, retail, or finance. And today many big enterprises are embracing the power of cloud computing and migrating their ERPs and CRMs to the cloud. By 2020, there will be about 5 million apps in the world, as predicted by TechCrunch.
There may even be a shortage of app development resources in the United States, United Kingdom, and Western Europe, if we consider the general trend of such shortage. The number one solution is to outsource app development to offshore destinations.
In this article, we will highlight the benefits and risks of app development outsourcing as well as explain how to minimize those risks. We will also give you some important points to consider if you decide upon offshore app development.
Step 1 of outsourcing app development is to engage an appropriate and high-quality software development partner.
Step 2 is to ensure all guarantees are foreseen. You obviously don’t want to be overcharged when you outsource mobile app development let’s say to some software agency in Poland.
It is important that you establish leverage over the vendor in the early days of the partnership so that if they aren’t delivering a quality output then you can take action and in a worst-case scenario have a painless way out and can get your outsource app development cost back.
Benefits of outsourced application development
If you delegate the app development to an offshore team, you will get the following advantages:
The cost of living in outsourcing destinations such as India, China, or Eastern Europe, is significantly lower than in the US, UK, or Western Europe. Therefore, even the highest rates in, say, Ukraine will be lower than the lowest rates in the US. For example, the salary of a junior iOS developer in the US is starting from $43,000/year. At the same time, the salary of a senior iOS developer in Ukraine is starting from $42,000/year.
If you choose the outstaffing model when outsourcing the app development, you will not spend much time on hiring, training and retaining employees. You will get a ready-made team that has completed many similar projects, built many apps, and can contribute to your project with their experience.
The high quality of work delivered
You can browse websites such as Clutch.co, find the application development outsourcing agencies across the world, and shortlist those that are highly rated by previous clients.
Risks of outsourced application development
At the same time, outsourcing carries certain risks, such as:
Collaboration with offshore teams is typically remote, though the leaders of in house teams often visit the offshore destinations. However, even those visits may not be enough to ensure that everything is understood correctly and not misinterpreted.
Time zone differences
Offshore destinations – as their name supposes – are typically located very far away from the client’s country. Thus, both countries need to find a convenient time overlap to hold meetings and discuss important problems. And if an offshore team has an urgent issue that cannot be solved without an in-house team, this issue can be quickly escalated. Besides, it can be difficult to control the quality of work because of those differences.
However, now there are special tools on the market that can help you control the time zone differences. And if the difference is extremely inconvenient for you but you still want to outsource app development, you can try nearshoring – outsourcing to the nearest country or region. For example, it can be Latin America for the United States or Eastern Europe for the United Kingdom.
Members of both the in-house and offshore teams have various cultural backgrounds and different approaches to work as well. This can result in a different perception of issues – for example, developers in Asia tend to hush up any problems that they encounter because of fear to be punished.
Therefore, the company should have a clear culture code that the team members should adhere to. And, what’s more important, offshore team members should be treated the same way as the in-house ones.
Leak of confidential information
When outsourcing an app development project, the client will have to entrust the outsourcing company with its sensitive data, and in some cases even the sensitive data of its customers. To minimize those risks, the client company should take the corresponding legal and organizational measures, such as having the offshore developers sign an NDA.
How to outsource app development without risk
Before you outsource mobile app development or web app development, you can resort to certain measures that can help you reduce or eliminate any possible risks.
The first step that you should take is to engage an appropriate and high-quality software development partner. The second step is to make sure that all guarantees are foreseen. It is important that you establish leverage over the vendor in the early days of the partnership. If they aren’t delivering quality output, then you can take action and in a worst-case scenario have a painless way out and get the money back. Further measures are as follows:
1. Ensure there is a Money Back Guarantee in place
Ensuring that you have a money back guarantee in place is super important. If you are not satisfied with the quality of the work, it is not fair for you to have to pay for it. Make sure you have a relevant clause, covering this risk in the contract.
2. Trial phases & account management
As a client-side project manager, I often suggest doing a trial phase complete with a test assignment instead of paying large sums upfront. Try to set up a short trial period of 2 weeks to a month within which the development firm has to deliver their best possible services to you and demonstrate they are right for your project. In such a way they can demonstrate that they are the right fit for your project.
If you are not that experienced with delivering software projects, but your management team decided to outsource android app development to either nearshore or offshore software company, it makes sense to hire a client-side project manager to manage risks on an ongoing basis. Within the YouTeam model, you are assigned an Account Manager who makes sure that communication, performance and financial aspects of the project are taken care of. The account manager is a third party and is hence impractical to make sure projects are done in a consistent way.
3. Key the code on the client side
Another basic and essential step is to set up your own client-side repository to take custody of the code immediately, which prevents the Software Development company from not transferring you the code in the case of disagreement. It also ensures that you are not obligated to pay for poor quality code.
4. Avoid paying out large lump sums early on
It is advisable to request as detailed a cost breakdown of the scope of works as possible, which will make the Contract Management a breeze. Whilst the project is in its early stages try to avoid paying out large lump sums. Until you’ve been working with a vendor for 6+ months you can’t be too confident in their ability to deliver.
Vijay, Founder and CEO at SoftwareTestingHelp, argues, we can not totally avoid these risks but surely we can mitigate the impact:
The biggest risk is, whether the outsourced team is capable of handling the project. You should check complete background and progress history of the outsourcing company. Start with small contracts and progress gradually by increasing the work.Click to tweet
The second biggest risk is – outsourcing cost. Check if the outsourcing contract is clear enough to handle increased workload, team size, and duration. There should be a clear agreement on all these things to avoid any additional cost burden and legal issues.Click to tweet
5. Leverage the benefits of code and payment escrow offer by outsourcing platforms
One of the major benefits of using one of the hiring platforms – YouTeam, Upwork, TopTal and others is that they offer escrow services, whereby your payments are only released when you are satisfied with the quality of the work. And pretty much the same is done with the code, we call this code escrow!
The bottom line
Today the apps rule the world and there’s an app for almost everything. That’s why the demand for app developers is constantly growing and, due to the shortage of tech talent in the US and Western Europe, app development outsourcing is becoming a trend.
Outsourced application development brings companies the following benefits:
- Reduced costs
- Saved time
- The high quality of work delivered
At the same time, companies carry the following risks:
- Time zone differences
- Cultural differences
- Leak of confidential information
And here’s how to reduce these risks:
Once you have all the milestones in place and they have demonstrated their ability to deliver quality reliably then you will have a significantly better chance of establishing a win-win collaboration with your chosen software development firm.
We at YouTeam make it easy and safe to find a perfectly matching team of engineers for any type of project.