According to Statista Market Insights 2024 report, the global revenue in the IT outsourcing market worldwide will grow from $550.98B in 2024 to $812.75B in 2029. The same report also features the tendency of businesses to outsource IT services nearshore, with onshoring and offshoring becoming slightly less popular options.
Regardless of the programming outsourcing type, the companies want to make the chosen option work for them. However, as a recent State of Outsourcing Report 2024 by CMSWire and SupportNinja shows, not every business is satisfied with the progress or outcomes of their outsourcing project. Here are a few stats.
- 48% of the companies wish for improvement, 45% are satisfied, and 6% are completely dissatisfied with the services they get;
- 59% of respondents are considering a change of tech outsourcing partner, and 14% are actively looking for new vendors, leaving only 27% of those willing to continue their current partnerships;
- The major challenges of programming outsourcing are the inability to find the vendor for their specific project (24%), poor communication (28%), and higher costs than expected (40%).
Many companies postpone the decision to delegate IT functions and, consequently, delay receiving the benefits of programming outsourcing because of the mentioned challenges. The good news is that these challenges can be avoided with the right strategy and practices implemented from the start.
With an average partnership spanning 3-6 years and over 160 clients from automotive, retail, logistics, and other industries, we at N-iX decided to share proven programming outsourcing practices that would help companies achieve the desired results.
Best programming outsourcing practices to reach your project goals
While we know the vendor-side processes of programming outsourcing, we also study the market preferences, industry specifics, and different business operational dynamics to better cater to the needs of a particular company from a specific business vertical.
After you've chosen the tech company to work with, consider the following practices to ensure a smooth partnership.
1. Choose the most suitable cooperation model
Usually, programming and coding outsourcing vendors offer several cooperation options for the companies to choose the best fit depending on their criteria.
- Team extension. The vendors can provide engineers with the needed tech expertise to close your team's skill gap.
- Managed team. An outsourcing company assembles a team with a project manager to cooperate with your tech department and boost its productivity.
- End-to-end solution development. You can outsource the whole development process and receive a custom solution according to the agreed specifications without your involvement.
The outsourcing programming needs are usually defined by a few major factors, such as project scope, budget, short and long-term tech strategies, tech team availability, and project involvement level. The right choice of cooperation model is crucial for project success.
For example, it would be economically efficient for a startup to delegate end-to-end PoC development to outsourcing companies, especially if this is a new product or solution. In this case, the startup would invest in testing its idea without committing to ongoing expenses associated with long-term hiring, office and equipment renting, and creating infrastructure from scratch.
On the other hand, an established enterprise that needs to modernize its legacy system or applications will most likely benefit from hiring a managed team. The latter can increase the programming capabilities of the company's tech department and provide enough resources to execute the digital transformation strategy.
N-iX approach: Our cooperation models include Extended Team, Managed Team, and Custom Solution Development so that companies can use the most suitable one for their projects. We also offer technology consulting, helping clients from different industries find the best approach to maximizing their processes, harnessing new technology, or planning the next steps of their transformation journey.
Read more: IT outsourcing guide: how to choose engagement model
2. Clearly define the programming outsourcing scope
Whichever cooperation model you choose for your project, make sure to define what the outsourcing vendor will do. Understanding the scope of work before the project rollout is critical to estimating the project duration, costs, team composition, and resource allocation accurately. In addition, a detailed project agenda will help you prevent scope creep and better manage any changes that may occur.
N-iX approach: Our team ensures that the scope of work is defined and agreed upon before the project starts and is mentioned in the contract. We can estimate it on our own (for Custom Solution Development), coordinate with our clients (for Managed Team), or provide input when requested (for Extended Team).
3. Align with your vendor on project management and communication styles
Communication and project management styles can make or break programming outsourcing projects, so it's important to align the two from the start. The management style you choose should be in accordance with your business goals, organization structure, and project needs.
For example, if you outsource application modernization, the Agile approach with short sprints, iterative development, and continuous testing and implementation would be a better fit. It will allow teams to detect possible risks in the early development stages and eliminate them.
It's also essential to set the communication and reporting schedule. This way, you can track the progress regularly, receive updates, and stay informed about the possible changes or opportunities your programming outsourcing team may discover.
N-iX approach: N-iX offers comprehensive IT project management services focused on efficient project launches, controlled execution, and successful closures. Our project management office has over 70 project managers with experience in leading over 160 IT projects annually. We work with Waterfall and Agile (Scrum, Kanban) project management methodologies to ensure strategic planning, mitigate delays, address pain points, and realign budgets. We provide thorough project evaluations against project objectives, augment management teams as needed, and develop tailored delivery plans to reach your programming and coding outsourcing goals.
4. Make sure your tech partner has vast tech expertise
According to the State of Outsourcing Report 2024, businesses want to find a vendor that meets all their business needs instead of working with more than one. And we understand where this sentiment comes from.
Outsourcing programming tasks to different vendors entails higher overhead management costs, increases integration issues and security risks, and challenges quality and consistency. All these issues may compromise the project's success.
When choosing a tech partner, make sure it has offerings for all related technologies and services on your tech strategy list. This will help you bring the necessary tech experts to any project streams faster, ensure steady project progress, and confidence to develop your business.
N-iX approach: Our tech expertise encompasses software engineering, data analytics, AI, ML, Data Science, cloud solutions, enterprise platforms and RPAs, cybersecurity, embedded software, and IoT. With experience of serving enterprise-grade businesses in 22 industries, we are a reliable tech partner for companies seeking end-to-end outsourcing of their tech units.
Explore the topic: Outsourcing software development: Top best practices and success stories
5. Ensure necessary compliance and risk mitigation
It's not enough to build a functioning software-it also should be compliant with the legal and security requirements of the target market to be able to use it or offer it to the public. You should agree on practices for monitoring your programming outsourcing partner's adherence to these requirements. It will ensure data privacy, protect your intellectual property, help comply with legal obligations and supply chain reporting, and foster a secure and trustworthy outsourcing environment.
In addition, you should understand the risks the project may have. Usually, a reliable vendor informs you about the possible risks and provides a plan for their mitigation.
N-iX approach: N-iX holds various certifications that prove its compliance with policies and requirements regarding data governance, privacy, security, and risk management. We're GDPR, SOC-2, and PCI DSS compliant and have ISO certifications such as ISO 27001, ISO/IEC 27701:2019, ISO 9001. In addition, we have obtained the FSQS certification, which assures that we're a secure software development provider for the fintech and banking industry.
Moreover, we document each development phase and prepare incident response procedures to minimize the client's exposure to software development risks.
Explore more: Software engineering outsourcing: How to make the most of it?
6. Plan for effective ramp-up and knowledge transfer
Over the course of the project, your company will obtain a massive amount of information that, if lost, could create many project-related issues in the future. And it's not only about the programming documentation-it's about the approaches and knowledge collectively gathered by the teams before and after the project.
Whether you want to take your project to a new vendor, scale it, or sell, make sure you have an effective knowledge transfer plan for every project development stage. It should be set around three core components: people, processes, and product. It will ensure development continuity and provide each new stakeholder with a holistic project overview, which is needed for making the right business decisions.
N-iX approach: At N-iX, we use a 5-step knowledge transfer plan tested by our 21-year-long experience in programming outsourcing. First, we decide what knowledge we should collect. Then, we assign knowledge transfer and receiving tasks to the responsible people. Next, we select the most suitable transfer method for the project. After this, we choose the storage for this information and conduct the transfer.
This stage is integral for any project we undertake. We closely cooperate with the clients to ensure that all the knowledge accumulated during our partnerships can be reused to reach future business goals.
7. Provide performance feedback regularly
It's important to communicate your feedback to your programming outsourcing partner regarding their work. This will help them create the solution you want to achieve, maintain the desired development pace, and prevent costly reworks.
Regular meetings and client satisfaction surveys would help the outsourcing partners understand what needs to be improved or maintained so that you can receive the best quality service possible.
N-iX approach: Together with our clients, we define KPIs for each project to track performance and product quality. We also schedule 360-degree feedback and practice feedback loops regularly to identify areas for improvement and celebrate achievements.
Discover additional insights: Effective guide to outsourcing software product development
8. Inform your vendor about major project-related changes
By the end of the outsourced project, you may have approved various business decisions that may affect the performance of the solution being developed. It is better to inform your programming outsourcing partner about these changes, as it will help them assess the possible implications on the developed solution and offer a better approach that considers new circumstances.
For example, you hired software developers to create a mobile application for an enterprise solution. By the middle of the project, you decided to adopt an AI component in a few years. In this case, it's better to let the team know as soon as possible if you want to skip unnecessary work in the future and prepare your business for further transitions.
N-iX approach: During negotiations, we ask our clients about their tech strategy for the next 5-10 years regarding the solution so we can create the best tool that solves their business tasks today and is easy to modify according to their transformation strategy in the future.
These are just a handful of practices we do at N-iX to deliver a business-changing solution for your company. If you feel we may be the right partner for your project, check out what you can outsource to us.
Programming tasks you can outsource to N-iX
As a full-cycle software development company, we offer programming services for projects at different stages and end-to-end custom development. Here's a list of the most common services you can delegate to N-iX:
And it's just a fraction of what we do. If you haven't found what you need, contact our team, and let's discuss where our expertise can ensure your success. Here's why you may consider outsourcing programming to us.
What makes N-iX a top player in software development programming outsourcing?
With 2,200 software engineers on board, including 400 cloud engineers, 200 data experts, and 60 DevOps specialists, we help companies quickly scale their teams and roll out development centers. We also have access to large talent pools in Europe and Latin America and maintain a strong employer brand in 25 countries. All that allows us to quickly roll out a development center for your project and speed up time to market.
Currently, we provide programming services to 160 businesses in finance, manufacturing, logistics and supply chain, retail, telecom, automotive, healthcare, energy, and agritech industries. Some of them are Fortune 500 companies, proving our ability to solve the tech challenges of international enterprises.
If you want to reap all the benefits of programming outsourcing and look for a reliable partner that can cater to all your tech needs, N-iX is the right fit for you. Reach out, and let's discuss how our expertise can help you reach your goals!
References:
- The State of Outsourcing: Unveiling the Nexus of Cost, Quality, and AI | CMSWire and SupportNinja
