Outsourced Product Development – Why Start-ups Are Loving It

Outsourcing product development was once a novel business strategy, but it is now a common strategic move for businesses of all sizes. It is a tried-and-true method that allows startup founders to release functional software to the market in a short period of time while freeing up time to focus on other core business functions.

According to Statista, the application outsourcing industry will generate $109.10 billion in revenue in 2021 and is expected to grow further in the coming years. In this article, I’ll show you how to successfully outsource software development and be competitive in the market.

What Is the Definition of Outsourced Product Development?

Outsourced product development, as the name implies, is a process in which a company hires an outside vendor to handle software development and related tasks. Product development outsourcing enables non-technical founders or product managers to successfully launch software products without becoming bogged down in the details.

While outsourced software product development services have been popular during the pandemic, it is a long-standing practice in the business community. At various stages of their growth, some global brands, such as Whatsapp, Google, and Microsoft, outsourced their software development needs.

For example, Whatsapp hired Eastern European developers to work on its app early on to save money and gain access to top talent. Meanwhile, Google continues to outsource product development as the search engine giant seeks to tap into global talent while also supporting in-house employees.

Benefits of Outsourced Product Development for New Projects

Entrepreneurs starting out on their first projects are frequently faced with the choice of hiring an in-house team or contracting outsourced product development services. eCodeSoft’s experience shows that working with an outsourced product development company rather than recruiting benefits founders greatly.

A startup must be adaptable and ready to change with the market. Despite the control that an in-house team provides, the outsourcing model serves founders better. The latter reduces overhead and enables them to maintain a lean team structure.

These are the most important reasons why entrepreneurs choose to outsource software product development.

Expertise in Technology and Domain

It takes more than a software professional to create a functional and engaging app. You may need a UI/UX designer, front-end developer, back-end developer, database engineer, project manager, and QA test engineer depending on the type of project.

Each role requires distinct and varied skill sets that require years of practice to master. Some backend developers, for example, are proficient in Laravel and Django, while others build backend services using ExpressJS and Ruby on Rails frameworks.

Outsourcing software product development assists founders in overcoming local talent shortages and tapping into the vast and diverse talent pool in various regions. You can hire talents that are otherwise scarce or expensive in the local market by outsourcing.

IT Process Improvement

App development entails more than just writing code and assembling various software components. All successful apps go through streamlined processes that begin with ideation and continue long after the app is released.

A typical app development process at eCodeSoft includes discovery, feasibility study, prototyping, development, testing, and post-release improvement. Each software stage is further subdivided into smaller, more detailed subprocesses.

When introducing newly hired developers into an untested workflow, inexperienced founders are likely to struggle. Outsourcing, on the other hand, ensures that software development is handled by a well-coordinated team that is familiar with established processes and best practices.

Our team, for example, is familiar with the agile methodology, which allows us to implement rapid successive changes based on user feedback.

Cost Cutting

Hiring local software developers in developed Western countries can stretch the budget to the breaking point. This is a bad idea for bootstrapped startups because the funds are also needed for marketing, operations, and other purposes. Outsourcing is a cost-effective way to build an app while still meeting financial targets. According to Deloitte, 70% of companies surveyed cited cost savings as a primary reason for outsourcing.

For starters, you avoid paying a fixed salary and other benefits to the in-house team. Working with an outsourced product development company can also save you money on workspace, hardware, and software licences. Most startups outsource to Ukraine because Ukrainian developers provide a good balance of quality, cultural similarity, and affordability. For example, when compared to the higher cost of hiring developers in Western countries, Ukraine’s hourly rate of $35-$60 per hour is appealing.

Forward-thinking startups should also plan for the significant, ongoing costs of an in-house team, even after the product’s development is largely complete. Founders will find themselves paying a dormant development team on a monthly basis. It’s not easy to let these permanent hires go, especially in Europe, because you’ll have to navigate a complex set of local laws.

Explanation of the Outsourced Product Development Process

Outsourcing to offshore software developers may be less difficult than managing an in-house team. You do not need to be hands-on or coordinate the developer team’s workflow. You will, however, need to manage the offshore development team, monitor progress, and provide timely feedback.

Here’s how to begin the process of hiring your first outsourced developer.

Step 1: Establish Your Objectives

Before you start looking for potential offshore developers to work with, make sure your requirements are clear. Some entrepreneurs are looking for expertise to build an app from the ground up, while others may want to add new features to existing software. Make a list of your project requirements to help you find the right vendor with prior experience or skill sets.

Step 2: Select a Partner

There are numerous software development firms that specialise in the outsourcing model. Finding one who is trustworthy and has a proven track record, on the other hand, necessitates doing your homework. Examine testimonials from previous clients to ensure they correspond to what the candidates pitch to you.

Step 3: Select a Collaboration Model

Outsourced development firms typically provide a variety of models to assist startups in remaining competitive in fast-paced environments. Determine whether a fixed-cost, time-and-materials, or hiring a dedicated team is best for you. When deciding on an outsourcing model, consider the financial implications, timeline, and project volatility.

Step 4 – Establish Communication Ground Rules

Clear, consistent communication is critical to ensuring that your project is completed on time. This can only happen if both parties agree on a specific communication

Framework. Setting up a progress update schedule and deciding on a communication platform like Slack are two examples.

Step 5: Legalize Your Partnership

When you’re satisfied with a particular vendor, it’s time to reach an agreement and clearly spell out the terms. Before beginning the collaboration, make sure that both parties understand the contract.

eCodeSoft Case Studies on Outsourced Product Development

Throughout the years, as we assisted various startups in bringing their ideas to life, our team has demonstrated competency, teamwork, and timeliness. Not only do we consider technical requirements, but our team also demonstrates aptitude in understanding the respective founders’ business goals.

These are some of the best projects we’ve completed for startups in various countries and industries.

Yaza: Outsourcing Product Design

Yaza is a real estate app that lets real estate agents share home listings and 3D virtual tours. The client tasked us with developing the Yaza mobile app from the ground up based on specific business requirements.

After accepting the project, our team began hypothesis validation, in which we tested the proposed ideas against audience feedback. The consistent and genuine feedback allows our UI/UX designers to zero in on potential difficulties and issues.

We resolved every issue that was discovered by breaking the validation process down into small, iterative steps before moving on to the next stage. This enabled our team to continuously update the app with UI elements that provide an optimal customer experience.

Product Discovery Outsourcing by Nomad

Nomad is yet another innovative property hunting app that meets the market demands of Europe and the Middle East. The app provides customers with a personalized property listing and seamlessly connects them with the appropriate agents.

Because Nomad is a pioneering initiative in the region, the app must be customized to address the user’s issue. Our team used continuous discovery throughout the development stages to ensure that the deliverables were in line with actual user needs.

We make certain that every hypothesis is supported by customer feedback in order to shape and improve functionalities and features during the design stage. Our efforts resulted in a well-received app that has become a hit with home buyers.

Outsourcing Android Development at Dollar Shave Club

Dollar Shave Club is a startup based in the United States that sells men’s grooming products online. The company has a working app, but it needs a major overhaul to keep up with modern trends and requirements. This collaboration demonstrates eCodeSoft’s ability to maintain effective communication and collaborate with our technical counterpart.

The major makeover of Dollar Shave Club begins with meticulous planning and discussion between our team and the client. We established milestones, estimates, and features for the new app. Our developers collaborate closely with DSC’s internal team to implement new features that significantly increase customer engagement.

MVP Development Outsourcing (Plai)

Plai is a performance management app that enables managers in small and medium-sized businesses to automate employee evaluations. Our success in this project demonstrates our ability to create an MVP within the timeframe and budget constraints.

With so much at stake, we turn to the intended users to ensure that Plai is a market-fit product. Our team interviewed potential users to learn about their problems. This serves as a guideline for structuring the app’s roadmap and ensuring the app is ready for additional investment opportunities.

In conclusion

product development outsourcing is and will remain a preferred hiring model for the startup community. When you outsource product development to offshore vendors, you save time, money, and gain access to a vast talent network. eCodeSoft has a strong portfolio, having assisted dozens of founders in designing, developing, testing, and aligning their apps to market needs.