A 10-Point Checklist for Selecting the Outsourced Product Development Partner

Successful businesses often outsource their tech product development to an offshore company with domain expertise and technical skills, so that they can focus on their core competencies. In general, offshore product development companies could play any one of three roles- assistant, advisor, or partner.

A software development company playing an assistant’s role will cater to specific delivery levels. The one associated as an advisor will take care of things at the management level. A software development partner, on the other hand, will work entirely toward your goals and put efforts to make the engagement a success.

Outsourced Product development partnerships are extremely beneficial for businesses that want to get experts to develop their products, while they focus on other vital aspects of their business. A recent Gartner report suggested that global IT spending is set to increase to $3.8Trillion in 2019/20, showing a 3.2 percent increase from the investments in 2018/19.

The lack of in-house talent and the high cost of in-house employees remain the top reasons why companies outsource product development. A Statista report shows that India and China are the leading exporters of tech product outsourcing services, bringing in a cumulative $150billion in IT exports.

But, in an overcrowded tech market, it can be challenging to choose your ideal partner for an outsourced partnership.

The Cost of Choosing the Wrong Partner

Estimating the number of hours, the amount of effort, and the cost of reiterating the process can seem daunting. While contracting out product development might look easy at first, as businesses get deep into the process, they often realize they have married the wrong partner.

Married, because what comes after is uglier than a divorce. Know that you are risking trust, IT security, knowledge, quality, time, and money with any outsourced product development partnership. Thus, when you choose the wrong vendor, you lose a lot more than money and time.

Now that we know how expensive it could be to get your product in the wrong hands, let’s see how we can prevent that from happening.

A 10-Point Checklist for Picking the Right Partner

• Industry and Technical Knowledge – This one is a no-brainer for any company outsourcing its product development. Your ideal outsourced partnership should stand on a foundation of competency. Look for employees on their team with the right skills. Arrange for a meeting with their key personnel. Know the business’ cumulative knowledge and expertise by asking the right questions.

• Process Management – The software development model that your partner uses makes a huge difference in how flexible, transparent, and inclusive their process is for you. You want to make sure they use the latest methodologies such as DevOps, Agile, and so on. Managing a complex product development process can be a hassle for a noob company. Watch out.

• Partnerships – Look at the current and previous partnerships the organization has had with businesses. You might want to check whether these companies come from various time zones, languages, and industries. The primary aspect we are looking for is compatibility. Will they be able to fit in with your processes and gel up with your organization as a partner?

• QA and Testing – A salient and critical feature of any tech product is its quality. You don’t want to invest in a company and end up with a buggy product that does not perform well. To ensure product quality, look at the prospective company’s quality assurance and testing methodologies. You might also want to consider talking to their QA experts.

• Communication and Transparency – Almost all partnerships can fail without the right communication systems in place. You say one thing, they hear another. Miscommunication and gaps in interaction are common when working with a remote partner. Learn how your prospective company maintains consistent communication and keeps the progress transparent. You want to work with a partner company that keeps you in the loop at all times.

• Skillset Diversity – Any tech product’s development involves a team with varied skillsets. You need developers in various programming languages, UI/UX designers, quality analysts, testers, support specialists, and so on. If your product involves these functions, you need to partner with a company that has a varied skill set on the board.

• Experience and Testimonials – When looking for an outsourced product development company, consider learning about the combined experience of the leadership team as well as that of the product development team. You don’t want to work with fresh graduates when you need core expertise and insightful experience. Also, look at the prospective company’s testimonials. What other customers have said about a company tells a great deal about their services.

• Flexibility and Engagement Model – More and more companies these days are looking for partnerships with flexibility and an array of engagement models in pricing. Almost all businesses now need customized engagement models to fit their needs instead of the other way around. Flexibility and the right engagement model will ensure you don’t shell out more than you should for your product’s development. A partner with multiple engagement models (T&M, FFP, NTE, Risk Reward / Royalty, etc.) offers a smoother, long and lasting relationship.

• Proactiveness – The ideal outsourced product development partner must be proactive in catering to your business’ needs. This company should not wait around for you to lead but should proactively present new ideas and innovative concepts to bolster the development of your product in the right direction.

• Commitment toward Shared Goals – No relationship can survive if two parties are vested in their own interests. Therefore, your ideal outsourced development partner should have a deep understanding of what you want to achieve with product development. Your outsourced team should then work toward these goals to create a synergized environment that boosts business.