Previously, companies used to hire unskilled workers to perform low-level tasks. Recruiters had to find a specialist who fit the description of the ideal candidate, was willing to relocate if necessary, work full-time and dedicate their career to one company.
Now, however, outsourcing is widely used to expand the talent base globally, while attracting talent from around the world. Any function can be outsourced to specialized companies. According to GlobeNewswire, the global IT outsourcing market will be worth $425.19 billion by 2026.
Why Companies Outsource?
Companies choose the direction of outsourcing depending on their needs and financial capabilities. Some outsource only two or three functions, while others find it easier to keep a staff of ten and outsource as much work as possible. Nevertheless, their goal is the same – to increase the company’s business model flexibility and decrease operational expenses.
In recent years, the demand for outsourcing services has increased because of quarantine. But the most successful foreign firms were using this method even before the pandemic. A Deloitte study found that the most common reasons for outsourcing programmers include:
- cost savings;
- paying more attention to the core business;
- solving productivity problems;
- quality improvement;
- access to a talent pool;
- other business needs.
Cost reduction is one of the most important driving factors when a company decides to outsource. By outsourcing, you can reduce costs by 20-30%, saving on wages because you only pay for hours worked and do without mandatory taxes on employees and reduce the cost of in-house training of new employees.
Companies can save mental effort on time-consuming, labor-intensive tasks by delegating them to outsourced employees, while saving their time and expertise for more crucial problems and concentrating on developing core business areas.
Collaborating with other partner companies and sharing risks is a worthwhile endeavor, reducing uncertainty before taking risks. Plus, outsourcing is an opportunity to find and get world-class talent, which ensures companies have a much better chance of success. When you don’t have to spend time and money on screening, you become open to hiring people worldwide.
Outsourcing helps companies stay compact. It’s very useful if you don’t want to keep a large staff and create a complex corporate structure. You can also use outsourcing to reorganize your business or optimize operating costs.
Read more about Development: Mobile App Development Process: Step-by-Step Guide 
Stereotypes About Outsourcing
Small Сompanies Don’t Need the Services of Outsourcing Companies
Nevertheless, with the help of outsourcing it is possible to seriously optimize the majority of the company’s business processes. Outsourcing organizations have a narrow specialization and use more advanced technologies and tools for its development. The only difference in outsourcing for small companies from large companies is that small companies use it mainly to reduce costs, and large companies use it to optimize the huge number of business processes and control employees.
Fear of Transferring Data to an Outsourcing Company & Information Leakage
The outsorcerer’s control over the company and its methods are clearly described in the contract. So the activities of the service company becomes transparent and easily controllable. You can conclude a non-disclosure agreement (NDA), in which you prescribe all the possible risks, administrative and financial responsibility of the outsourcer for the information leakage. You should remember that a bona-fide outsourcer will never sell or transfer the customer documentation to anyone, since it practically means his “death” on the service market.
There’s a Dependence on the Outsourcing Company
In fact, the company’s dependence on an in-house specialist is many times greater. Look at how willing the in-house specialist is to show you elements of the job and tell you about their purpose. Has your employee signed a job description? Did he/she provide documentation of all his/her work along with diagrams and passwords? A full-time employee may simply not show up for work tomorrow, and you’ll lose all the important information. Outsourcing company will give you all the details about your project and there will be no question of dependence, because the IT company is tied to you by the contract and cannot just ignore you.
In-house Specialists Solve Problems Faster
This misconception is promoted by the fact that an in-house specialist is always in plain sight. Nevertheless, an in-house employee cannot go broke and solve several problems at the same time, while an outsourcing company can do it at the expense of a larger staff of specialists. Plus, the outsourcing company employees have more experience, which means they know the cause of the problem. Any employee of any company is an expert in this or that field and cannot be an expert all at once. This is why a company which has its own staff of specialists sooner or later faces the necessity to employ additional staff for implementation of one or another solution.
Cross-cultural Communication & Language Barriers Will Be an Issue
Handing the project over to foreign web developers whose worldview, culture, and ways of communicating differ from yours can be a problem. There can also be difficulties with negotiation due to language differences. However, these disadvantages can be avoided – if you have hired a good and reliable company, these barriers will not arise. A good company that works with clients from different countries will know the peculiarities of each one for sure. And there shouldn’t be any problems with language, since almost everyone in the world speaks English, especially in the IT field.
Web Development Outsourcing Benefits
Prepared staff of professionals. There is no need to look for qualified specialists on the job market or train your own staff. Professionals from an outsourcing company are ready to work. So the employer will not have to worry about how to fire an unnecessary employee.
Turnkey work. Involved specialists undertake the entire project: survey of business processes, development, implementation and system maintenance. The only thing required of the employer is full cooperation and assistance.
Reduced costs. For most companies where development is not a core competency, hiring and training staff is not cost effective. Outsourcing does not require a large investment in personnel, and clients pay only for a predetermined amount of services.
Access to technical information. Web experts receive a wide range of information, including technical documentation.
Security. Outsourcing software development provides the best protection against information security breaches, maximum security for the code and processes used in the development of any web application. In addition, companies sign an NDA to preserve the confidentiality of the idea and materials of your web project.
Focus on core business. By outsourcing web development, the company’s in-house team can focus on other business-critical issues such as marketing, business development, financial strategy, etc.
Rapid deployment. By outsourcing development to a vendor, the project can be released much faster. The company can also release multiple projects at the same time, combining in-house and external teams.
Risk management. If you choose the right outsourced web development company with proper communication guidelines, effective project management standards and capable web developers, the situation becomes just the opposite, you reduce the level of uncertainty and the amount of risk.
High quality. Outsourcing providers control the quality of the product, check the code accuracy and provide the customer with error-free software.
What Makes a Good Development Team?
Usually, outsourcing companies strive to gain as much experience as possible in different industries. Before hiring an outsourced development team, find out what their responsibilities will be and what results you can expect from them. In addition to technical skills, they should have good time management and organizational skills. A typical outsourced web development team looks like this:
Project Manager (PM)
This person is responsible for managing the product development process. PM oversees user stories, budgets, deadlines, and reports to the customer at all stages of development. If you have any questions about the project, you should contact the project manager first.
They are the main source of outsourced web development. The backend developer is responsible for the server-side project functionality. The speed, performance, customization capabilities and scalability of the product depend on the architecture of the backend.
Mainly responsible for the client side of a web project and required to bridge the gap between code and design. Translating visual designs and layouts into usable websites, ensuring a good look on all platforms, operating systems and any other devices.
Responsible for designing a product that will be attractive and customer-friendly. A talented designer will understand the latest design trends and insights and bring your concept to life by showcasing what you want to see.
QA testers & Engineers
The QA engineer creates and runs tests that identify problems with the software before launching the product to fix as many bugs or problems in the software as possible to meet established quality standards.
If all team members trust each other and have a great dynamic when working side by side, you’ve probably found the right team.
What Do You Need to Know Before Hiring?
To ensure that you’re putting out the best products, you need to have the most talented people in your business. But before hiring experts, find out the following things:
Ask about how the company reviews and hires employees. Of course you are hiring a specific team, but the outsourcing company itself hires the developers who work there. So you should find out how they find and review their internal employees. Chances are, you’re looking for certain skills and qualifications – perhaps lacking in your company – so ask them how they ensure that their employees have those competencies and qualities.
Ask about the methodology or work approach they use. That way you’ll determine if your partner is compatible with your business. You may be using the Agile methodology. If the outsourcing team is also using Agile, then you will know what to expect from the partnership and the process. Either way, the methodology or approach the company uses can inform you about its development procedure. You can discover the feedback methods available to you, how developers adapt the project to your needs, etc.
Find out about their experience in the niche. Whether your business is in education, healthcare, finance or entertainment, you need a software development partner who is familiar with your industry. This will give the outsourcing company a better understanding of what you’re looking for, as well as a solution if and when problems arise.
But don’t forget to ask about experience with companies from other countries as well. This question will help you learn about how team members have worked with businesses and people in your area in the past, how they’ve handled time zone issues, etc.
How involved do you want to be in the development process? This is a question worth discussing up front, since most of the outsourced team works independently, with minimal oversight or interference from the business. But they should still keep you updated on progress toward your goals. Be sure to set expectations about how actively you and your internal team want to be involved.
Check what programming languages they use. Different programming languages and tools are better or worse for different project types. To make sure the team you’re hiring has the right languages in their stack, ask them about their tools. This will also give the company a chance to demonstrate their experience and expertise. Plus, you’ll be able to get an idea of their work style, abilities and strengths.
Find out how the team communicates with its partners. Communication is tied to effective collaboration, no matter who your partner is or where they are located. Look for an outsourced team that has established effective communication channels to keep you informed of their progress. Ask what project management tools they use, if you will have access to them and if there will be weekly meetings.
Read more about Development: How to Build a Perfect Fintech App?
Steps to Hire a Web Development Company that Meets Your Requirements
Define Business Goals & Requirements Before Outsourcing Web Development
Before you go to a web outsourcing team, you should have a clear understanding of your project needs and the goals you want to achieve. Web projects can be implemented in different ways, with different methodologies and technology stacks.
Determine who your users are and what they will get out of using your website, establish the type of website you want to create, specify the desired terms of the web application implementation for your development team.
Choose a Reliable Web Development Outsourcing Company
Once you’ve determined your project goals, the next step is to choose an outsourcing provider for your web development project. You can either advertise your project with a brief description of all the requirements and the desired approach, or you can analyze your competitors and determine the best fit for the project.
Different web development firms and teams prefer to use different development components and achieve the best results. When evaluating a web development partner, pay attention to characteristics such as:
- Experience. Although experience does not always equal talent, it is important when choosing an outsourcing company. The more diverse and the greater the number of completed projects, the more likely they are to help you as well.
- Portfolio. Before hiring, always look at the portfolio your potential partner has. Presenting previous work may convince you to choose a particular organization. You can see our portfolio here.
- Testimonials. You can assess an outsourcing company not only by looking at their previous work through their portfolio, but also by checking feedback from previous customers. You can do this by either contacting them directly or checking them out on sites like Clutch or Goodfirms.
- Communication. Clarify exactly how the team will communicate with you, especially if you are hiring from another country with a different time zone. Proficiency in English for communication and writing is a basic requirement.
- Confidentiality. As previously mentioned, a website development outsourcing company should ensure that it protects the concept of your product.
Pay attention to the company’s awards, blog information and the news they publish.
Once selected, make direct contact with the most suitable companies. But don’t choose the first company you see just because they have agreed to do their best. Usually, a competent agency will first agree on all the details, get to know the project, and then take the job. So they determine the scope of work and nuances, which at the end provide a quality web project.
Control the Development Process
Once you start collaborating, keep in touch with the project manager and monitor the development process. Especially since we live in a time when communicating with people who live on the other side of the world is no longer a problem. Do not be afraid to leave comments and ask questions about the web project. Discuss the schedule for remote meetings, deadlines for checking interim results, preliminary website design, approximate development budget, and strategic costs. A successful partnership with an outsourcing company will allow the project to be developed in the best possible way using cutting-edge technology.
Read more about Development: What is an MVP and why is it important for business?
Mistakes to Avoid When Outsourcing Web Development Projects
Lack of Market Research
Lack of proper market research or choosing a vendor without any research or reference checks is one of the most common mistakes. Most startups base their decision to outsource solely on initial profitability. While the cost factor plays an important role, it is far from the only one. Other important things are how your vendor performs in the marketplace, testimonials and reviews, portfolio and experience.
Take the time to do enough market research to have an idea of all the work done by your potential partners. The time spent on research and preparation should correlate with the investment size and the expected collaboration duration.
It’s understandable that explaining clear project requirements to your partner is difficult. However, the lack of specific criteria will result in a website that does not meet the requirements of your business or customers. Changing and fixing the product will take even more time and money.
To avoid this, determine what goals your site must meet and who will use the site. Then prepare appropriate documentation outlining the requirements. Don’t hesitate to ask the team to explain anything you don’t quite understand. Don’t hesitate to ask for advice if you don’t have a clear vision for the product.
Lack of Technical Expertise in Your Company
Another problem when outsourcing web development, is the lack of technical expertise either from you or your team, which can lead to certain risks and failures for the project being developed. Your company’s job involves not only overseeing that the work is done correctly, but also the ability to create strong documentation with clear requirements for your outsourcing partner.
It is important that your company has someone with technical knowledge to advise and help you with any issues that arise over the course of the work.
If you plan to work briefly with an outsourced team, you are likely to fail. Because of the short period, both parties will encounter misunderstandings and miscommunication, because it’s almost impossible to establish a proper familiarity in such a small amount of time. Plus, because of the lack of time and money, the outsourcing company will not be able to create a customized solution that meets the company’s requirements.
To avoid such a scenario, try to plan software outsourcing for the long term and build not only the software, but also a trust-based relationship with your partner. Do not neglect the personal relationship, because oftentimes it is the relationship that can do much more for the success of the outsourcing agreement than the contract.
Project Cost Underestimation
One of the main motivations for outsourcing is to reduce the cost of producing software. Even though outsourcing website development can save money, this should not be the main reason to outsource. If you choose the wrong company, you risk overpaying for your website. Try to budget your project development within a realistic range. Avoid agencies and software vendors that are too cheap. As a result, you run the risk of poor quality or complete failure of your project. Also remember to consider details such as taxes, applicable duties, or third-party transaction fees.
Underestimating QA or Testing
Any product created without testing during the project is doomed to failure. Whatever you plan to create, testing and project control must be included in the development process. The tester must be involved in the development from the beginning, otherwise you will face a lot of bugs in the final product. Software testing is key because it ensures a defect-free product, end-user satisfaction, compliance, a secure system and good performance.
Therefore, make sure that the work of a quality assurance engineer is included in the contract with the outsourcing company and your software is properly tested. Quality assurance should ideally be done by the same company that collaborates with you on your projects.
How Much Does it Cost to Outsource Website Development?
The cost of development depends on many factors. Before calculating the cost of website development, it is worth determining the type of site being developed, the type of team, choosing the region where the team resides, and most importantly, understanding why you want to make the site.
The price of creating a website affects:
Website Feature Complexities
It depends on how many and what functions your website will perform. The more complex the functionality of your website, the more hours of programming and project management will be needed to implement your project. For example, if it is an online store, the price may be higher than on the information page.
Unique Website Design
It depends on whether you want a professional, unique design, adapted to the field of your company or an ordinary template site.
If the site will do, for example, a freelance student who is just learning the technology, the price will initially be lower. But then the correction of errors may incur additional costs. If the site is created by a professional web development company, the price will be higher, because it will include taxes, salaries and other expenses incurred in connection with the project.
Web programming uses many different technologies and it is important to choose the one that will be most suitable for the project. Technologies are chosen depending on the size, goals, functionality, and scalability of the project, which affects website speed, performance, and security.
Your website can be created by a freelancer who will do everything from requirements analysis to project implementation. Or, for example, a web development company that will bring in a team to create the project. The result of the project will directly depend on how many and what kind of people will be involved in the website creation.
The cost of developing your site will also be affected by whether the site is optimized for speed, whether security settings are in place, and whether the site is connected to Google Analytics and Google Search Console. To put your site on the Internet, you have to pay for a domain and hosting. Adding and adjusting various features in your website admin panel will increase the time and cost of website development.
Any website, once created, requires maintenance, which can include several things, from updating the content management system, updating website components to publishing content.
Here’s how web development team rates vary around the world.
US – $100 – $150
UK – $90 – $130
Australia – $80 – $120
Western Europe – $70 – $170
Eastern Europe – $20-$150
South America – $30 – $50
Asia – $20 – $80
Although North America is home to some of the most productive and skilled developers, it is one of the most expensive areas of outsourcing.
Eastern Europe is home to many skilled developers, and countries like Ukraine, Poland and Romania are major outsourcing hubs. While Western Europe has high rates for software development due to its stable economy and high standard of living.
Most well-known companies such as Samsung and IBM choose to outsource web development. There are many reasons in favor of outsourcing web development, not only for large corporations, but also for small companies and startups. You just need to be open and cautious in choosing a partner to achieve your business goals.
We hope that this article will help you to find a worthy partner and avoid most mistakes. And if you want to outsource web development to a qualified company – contact us.