Category: Offshore Development & IT Outsourcing

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How Much Does It Cost to Make an App – Full Breakdown

Having a $10,000 budget and a $300,000 budget for a mobile application are vastly different. Both figures, however, can provide an accurate answer to the question “How much does it cost to make an app?”

The problem is that numerous factors can influence app development costs. Do you want to create an app that works on both iOS and Android? What country do you want to hire a development team from? What kind of app do you want to create? The cost of your project will vary greatly depending on the answers to these questions.

At Savvycom, we have created over 100 mobile apps since the company first surfaced in 2009. Being a part of the Apple Consultant Network, our article speaks from our own experience. Let’s delve into the most influential factors influencing mobile app costs and provide real-world app cost examples.

With this information, you’ll be able to estimate the cost of developing your mobile app. Anyway, feel free to contact our managers for a more precise estimate or further consultation.

1. What Factors Influence App Development Costs?

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As with any complicated app development process, a variety of factors can influence the final cost. Here are the most important ones.

  1. App Types (native, cross-platform, hybrid)
  2. Platform (iOS, Android) 
  3. Design
  4. Features/complexity
  5. Developer Rate (varies depending on location, hourly rate, and team size)

1.1. Android and/or iOS

Android and iOS are the two most popular mobile operating systems. They aren’t the only ones, but they rule the mobile world, with Android accounting for 69.74% of the market share and iOS accounting for 29.49% as of 2022, according to Statista.

When you begin working with a project manager on the first rough estimate for your app, one of the things you’ll research is the best platform to build for. What mobile devices does your target audience prefer? For example, 55.26% of mobile users in the United States use iOS, whereas in Poland, it is less than 10%. As a result, before deciding on an operating system, you must first research your target market.

You have three options if your customers use both iOS and Android devices:

  1. Select one platform for your initial app and add support for the other later.
  2. Create two apps right away.
  3. Create a cross-platform or hybrid app (more on those later).

If you choose one platform to begin with, the cost difference will be determined primarily by the length of development. iOS and Android development rates are roughly comparable.

Building an Android mobile app typically takes longer because your team will need to test on a wider range of devices.

1.2. Native, cross-platform, or hybrid app

When estimating the cost, the type of app makes the most difference. First, what exactly are these apps?

Native mobile apps are designed exclusively for a single mobile platform. It is impossible for a regular user to run an APK file (executable for Android) on an iPhone or an IPA file (executable for iOS) on an Android device.

Android and iOS use different programming languages and frameworks: Android uses Java and Kotlin, while iOS uses Swift and Objective-C. If your target audience owns both Android and iOS devices and you decide to support both platforms with native apps, you’ll need to create two apps: one for Android and one for iOS.

However, you can build a single app for both platforms (in addition to a web app or a responsive website):

  1. App for multiple platforms
  2. App hybrid
Learn More On: Native Vs Cross-Platform Development: Which one is better?

Cross-platform apps can be written in C# using Xamarin or JavaScript using React Native, while hybrid apps use AngularJS and its Ionic framework. All of these options are compatible with both Android and iOS devices.

You might be thinking right now. Why would I create apps for each platform when I could create a single app for both?

Indeed, developing a hybrid app is faster and less expensive than developing two native apps. However, you should be aware of the disadvantages that cross-platform and hybrid apps bring. Here is a brief comparison:

  Native apps Cross-platform apps Hybrid apps
Pros:
  • Top performance
  • Smooth integration with device OS
  • Can access platform-specific features
  • High responsiveness
  • Great UX
  • Secure
  • Middling price between native and hybrid apps
  • One app for both platforms
  • Easier to update
  • Faster to market
  • Cheap to build
  • Easy to maintain
  • One app for both platforms
  • Faster to market
Cons:
  • Can be costly to build
  • Take significant time to build
  • Limited flexibility
  • Can’t access most platform-specific features
  • Integration is laggy
  • Security issues
  • Low performance
  • Poor UX
  • Slow
  • Security issues
  • Limited access to device hardware
  • No support for platform-specific features

Despite these disadvantages, there are some popular cross-platform and hybrid apps, such as Skype, Slack, and Instagram. The trick is determining what type of app your company requires. Perhaps the disadvantages will be irrelevant to your application. But perhaps they will.

1.3. Cost of App Design

Great visuals are the foundation of a good app, so it’s no surprise that design can influence the cost of developing an app. Custom icons and design elements, such as screens, logos, and buttons, will take time and money to create. In addition, each screen in an app must be drawn separately. Making custom animations is an entirely different challenge, but they are frequently a winning feature.

However, great design does not always imply complex visuals. Sometimes simplicity is the best solution: depending on what your app does, it may be possible to use standard OS-provided elements that don’t take much time or effort to compose.

When it comes to games, design is an especially important component of the cost of mobile application development.

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1.4. Features

The cost of developing an app is largely determined by the number of features — but this is not the only factor.

The complexity of those features can be more influential at times. Some features rely entirely on standard tools and APIs. Others necessitate the use of third-party APIs. A third type necessitates the development of custom algorithms.

It’s something of an industry standard to divide mobile apps into three categories based on complexity:

  1. Simple apps have few features, most of which are either fairly standard or relatively simple to implement. Consider this type of app to be a minimum viable product (MVP), or an app with only the features necessary to collect feedback and validate the app idea. Some finished apps are similarly straightforward. Building a simple app can take between 2 and 4 months and cost between $18,000 and $60,000.
  2. Medium-complexity mobile apps typically take 6 to 10 months to develop. Apps of medium complexity have more screens, features, and complex features than simple apps. If a simple app has a basic login feature, for example, a medium-complexity app would have Facebook integration. That’s just a simple example, but you get the idea. The cost of developing a medium-complexity app will most likely start at $50,000 and can rise to around $130,000.
  3. Complex apps include features such as augmented and virtual reality, bots, payment integration, NFC (near-field communication), and media streaming. Development time can range from 7 months to more than a year, depending on the number of such complex features. The average cost of developing an app with complex features starts at $130,000 and can reach $500,000 or even more.

1.5. Backend

The backend, also known as the server-side, is the part of your app that is invisible to your users but supports some of the more complex features, such as device syncing and push notifications (though the latter can be handled by cloud integrations today). Servers host your databases, custom, and third-party APIs, and other applications.

A backend isn’t required, but if your app requires one, you’ll need to hire a separate developer, such as one who works with Ruby on Rails or Python. And, of course, that developer will raise the price of your app.

1.6. Workload

When asked, “How much does it cost to develop an app?” The answer is typically calculated based on the amount of time required for analysts, developers, designers, and testers to complete all stages of development. However, developers’ work can be calculated in two ways:

  1. In hours, which is the traditional unit of measurement for task complexity. Developers estimate the time required to build each feature, allow for unexpected complications, then total the time for all tasks and multiply it by the hourly rate. Easy.
  2. In story points, a system that is increasingly being used in Agile development. The idea behind the story points system is that instead of attempting to predict how long it will take to develop a specific feature, the feature (or story) is assigned a number of points for difficulty.

Story points are subjective. The team chooses the simplest story (one with the fewest risks and the least amount of effort) and assigns it to two story points. Then all of the other stories are compared to it and given points in comparison. Typically, stories begin with two points. Not 1, because something is always added or removed during development, and a story worth fewer points than the one previously thought to be the smallest may appear.

Learn More On: 08 Best Software Development Methodologies

1.7. Team Size

It’s difficult to estimate the average cost of developing an app without knowing how many people are involved. After all, these are the people you’re paying to do the work.

The simplest app development team consists of the following specialists:

  • There is one project manager.
  • 1-2 platform developers (iOS, Android, web)
  • 1 backend programmer (optional)
  • 1 user interface/user experience designer
  • 1 quality assurance specialist

A single UI/UX designer is usually sufficient for both iOS and Android apps, but an additional web app may necessitate its own designer. A backend developer is required if your app requires a server-side.

This team can be expanded for faster and more complex development, which will impact app development costs.

1.8. Outsourcing vs. Internal Team

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Hiring a team of specialists to sit in your office and work solely on your project is what in-house development entails. Outsourcing means hiring a separate company to do the development for you without having the developers within arm’s reach.

Both options have advantages and disadvantages, but we’ll concentrate on the price differences here. To make a long story short, hosting a team of developers in-house is far more expensive than outsourcing. Having an in-house team means you’ll be paying for the followings:

  • Salaries
  • Taxes
  • Additional office space and workstations
  • Software and hardware
  • Tools for developers
  • Everything you pay for your regular employees’ social benefits and everything else

These costs vary greatly depending on where your office is located. Even general numbers are impossible to state. An in-house team is sometimes justified, especially if you have multiple mobile products that must be constantly updated. In other cases, outsourcing is a better option. And outsourcing can be calculated with some accuracy.

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1.9. Development Team’s Location

The geographical location of the company you’re hiring accounts for the majority of the cost of outsourcing. Here is a list of countries organized by average hourly rates, from the most to least expensive:

  • North America (the United States and Canada) – $100-150 per hour
  • $110 per hour in Australia
  • Western Europe (the United Kingdom, Germany, and Austria) — $90 per hour
  • $50 per hour in South America
  • Eastern Europe (Poland, Ukraine, Romania, and Bulgaria) — $40-50/hour
  • $25 – 30 per hour in Asia (Vietnam and the Philippines).
  • Egypt, Kenya, and South Africa — $30 per hour

We can estimate the average cost of developing an app in different regions using these approximations. To accomplish this, we simply need to go back in time and recall the average development time for each of the three types of apps:

  • Small app for at least two months
  • Average 6 months for a medium app
  • 8 months to more than a year for a complex app

2. The Unknown Costs of Mobile App Development

The cost of developing an app extends beyond the development process. There may (and almost certainly will) be additional expenses to consider along the way. Here are the five most common hidden costs you may not have considered.

2.1. Upkeep and upgrades

The app’s release is undeniably significant, but it is not the endgame. As long as the app is available in app stores, you must maintain it, respond to user feedback, and provide regular updates. According to the Outsystems Survey, the cost of app maintenance during the first year after launch is approximately 50% of the cost of app development. The second year is usually 25%, and each subsequent year is 15-25%.

Maintenance and updating services typically include the following:

  • Optimization of code
  • Server enhancements
  • Application updates and bug fixes
  • New technologies and features
  • Support for new operating systems
  • Scalability of the app

2.2. Infrastructure expenses

These costs are primarily associated with app hosting on servers. The main goal here is to ensure that your platform can handle traffic spikes following the launch. The scalability requirements of your app will determine the cost of these services. Here is a list of infrastructure fees you may be required to pay:

  • Server
  • Storage of data
  • Content distribution networks
  • Integrations
  • Tools for development
  • Load balancing devices
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2.3. Functional expenses

This section’s services are designed to help your app’s functionality. For example, you may need to subscribe to several services and set up third-party integrations. The cost of these services varies according to how many you require, and these expenses frequently include:

  • Notifications via push
  • Notifications via SMS
  • Integration of social media
  • Geolocation
  • Gateways for payments

2.4. Level of app security

While you can completely delegate the development process to the hired team, there are a few aspects we recommend familiarizing yourself with, one of which is security. You can inquire about the development team’s security practices and discuss the best options for firewall protection, secure transactions, and other critical issues. Making the platform as secure as possible may increase the cost of developing an app, but it is well worth the investment.

2.5. Patenting applications

This legal step will protect your intellectual property rights while also assisting you if other app owners falsely accuse you of intellectual property theft. This must be completed before the app is released to the public.

During the patent application process, you will need to specify what makes your app unique, define the aspects of your app that you want to claim ownership of and provide a visual representation of the app.

The cost will vary depending on the country in which you file your patent application and the type of mobile app. A regular non-provisional patent in the United States, for example, can cost between $2,000 and $5,000.

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3. App Development Cost Examples

As evidenced by the preceding, so many factors influence the development process that estimating the cost of creating an app on the spot is difficult. At Mind Studios, we write articles in which we share our insider knowledge of the development of various types of apps, including cost estimates.

Here are several examples of the costs of developing an app for both iOS and Android in 2022, as estimated by The Mind Studios with their $45/hour rate:

  • FitBit-like fitness app — $84,600
  • Tinder-like dating app — $108,470
  • Discord-like VoIP app — $99,950
  • $82,440 for an educational app similar to Udemy
  • Signal-like messaging app — $100,080
  • Headspace-style meditation app — $76,590
  • Postmates-style food delivery app — $130,500-148,500
  • IKEA Place-like augmented reality furniture app — $91,800-124,200
  • $137,700-162,000 for a marketplace app like Etsy or eBay

How much does it cost to create an app you have in mind, and how can you find out? If you know exactly what you want to build, you can either contact an app development company for a rough estimate (which is what our contact page is for) or use an online app cost calculator.

Online cost calculators are straightforward web applications. They allow you to select from a variety of parameters and features, and then automatically calculate a rough estimate based on the rates set by the calculator. When using one, keep in mind that the majority of these calculators estimate the cost very, very roughly. Most are designed to obtain your email address and entice you to contact the development company.

Learn More On: Mobile Banking Application Development: Features & Cost

4. Mobile App Development Cost – Interesting Facts

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As you may have guessed, when we said numerous factors influence app costs, we weren’t exaggerating. And it’s not just the app development options that matter. Post-launch marketing and maintenance costs, economic conditions in the leading software service providers’ countries, and the evolution of the mobile app market all have an impact on the costs to launch a mobile app.

We’ve compiled a list of statistics about app development costs and the mobile app market in general that you may not be aware of.

  • According to the Business of Apps, you should set aside at least $10,000 to plan your app’s go-to-market strategy.
  • The cost-per-install (CPI), which is the price the app marketer pays to engage one user, can be used to calculate the cost of marketing. The iOS CPI in 2021 was $3.6 per app install, while the Android CPI was $1.22 per app install. Overall, app marketing can cost up to half the cost of development during the first year after launch.
  • The average cost of maintaining software and, in particular, applications is approximately 15-20% of the cost of development.
  • According to an Outsystems survey, more than 80% of mobile apps take 3+ months to develop, and 40% of applications take 6+ months to develop.
  • According to Market Research Future, the mobile app development market will grow at a compound annual growth rate of at least 23.80% over the next eight years.
  • According to Globe Newswire, the global mobile applications market is now worth US$ 112.6 billion and is expected to be worth more than US$ 307 billion by the end of 2031.

Given the last two forecasts on the list, it appears that the global mobile app market will continue to evolve at a rapid pace over the next decade, implying that app development costs will not decrease. So, if you’ve been thinking about creating your own mobile platform, now is the time.

5. Mobile App Development Costs by Types

So, how much money does it take to launch an app? To answer this question, the development team must first understand the type of application you wish to create. There is no one-size-fits-all solution, but each type of mobile app has a standard set of features that will allow the team to create a rough estimate for the project quickly. In the table below, we’ve compiled a list of some of the most common app types. Remember that the estimates are based on a $25 hourly rate.

Type of app Examples Timeline Average cost
Basic app with a minimum number of features Video player, calculator 1 month $8,000+
Data-driven app Weather 1 month $8,000+
Authentication app McDonald’s Loyalty App 3 months $20,000+
Social networking app Instagram, Facebook 3 – 9+ months $20,000 – $100,000+
eCommerce app Etsy, eBay 6 months $60,000+
Marketplace app Amazon, Booking.com 6 – 9 months $60,000 – $100,000+
On-demand app Uber, Postmates 8 – 12 months $70,000 – $100,000+
eLearning app Duolingo, Udemy 4 – 6 months $40,000 – $60,000
Healthcare app Headspace 5 – 8 months $50,000+
IoT app Nest, Garmin Connect 4 – 6 months $40,000 – $60,000+
Video Streaming App Netflix, Hulu 6 – 9 months $60,000 – $100,000+

These are only a few of the most common types of mobile apps. If you have an idea for something unique and even innovative, please contact our business development team. We will gladly listen to your idea and answer all of your questions.

Learn More On: The Essential Guide To Software Development Services

6. How to Reduce App Development Costs

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If the prices listed above make you nervous, here’s a list of seven things you can do to cut the cost of mobile app development.

  • Make a thorough plan

Can you draw it? Better yet! Bring a clear idea and a way to properly explain it to developers.

Make a list of the app’s technical specifications and requirements.

This can prevent miscommunication, nervous breakdowns, and financial loss. In our previous article, we discussed the significance of requirements.

  • Outsource

Outsourcing is significantly less expensive than hiring an in-house team, especially if you hire a team from a region with reasonable hourly rates.

  • Beginning with a test

Although it may appear obvious, not everyone does this. Early testing helps you find bugs that, if not fixed quickly, can lead to more bugs in the future, necessitating the rework of entire features.

  • Create an MVP/MLP

A minimum viable product, also known as a minimum lovable product, can assist you in gathering data and avoiding mistakes long before you launch.

  • Maintain regular contact with developers and check on progress

This will keep you and your team on the same page and help you avoid major mid-development changes or adjustments.

  • Find a reliable mobile app development company

It is sometimes better to pay a little more for a development team that is experienced in your field and has a good reputation. Examine previous projects and reviews on professional websites such as Clutch.

Looking For a Dedicated Team?

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7. How to Precisely Estimate App Cost?

At Savvycom, we estimate the cost of app development in six stages:

  1. You get in touch with us and tell us about your project.
  2. We are contacting you to gather general information.
  3. Our project managers conduct preliminary research and develop a rough estimate.
  4. We will contact you with our estimate.
  5. If everything is in order, we will begin a more in-depth discussion with you about the functionality and content of your app.
  6. Based on all available information, we create a more precise estimate.

After the final app development cost estimate, there may be adjustments if new features are added or additional technology is required. Slight cost adjustments are possible with any changes. However, the cost rarely deviates significantly from the final estimate.

Before app development begins, reputable software development firms will usually provide you with a rough estimate of the mobile app development cost. The quote is based on your project description, as well as your business and technical needs. This data is compiled and summarized in a preliminary list of features.

It’s also worth noting that initial estimates and actual application development costs don’t always match up. Aside from the obvious assumption that the estimate was incorrect in the first place, another common cause of the mismatch is a change in the app development scope. This can occur if:

  • Midway through the project, the client decides to increase the number of features or make other significant changes.
  • The MVP launch or soft launch, during which initial feedback is gathered, indicates that the team needs to make some significant changes or even look for entirely new solutions.

Fortunately, in most cases, these disparities can be avoided by investing time and money in the proper discovery stage. That is the first thing Mind Studios does after accepting a new project. During the discovery stage, we determine whether there is a market need for the app, which features the target audience will require, and how we can differentiate the new product from the competition.

8. App Cost By Stages of Development

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The entire app development process can be broken down into four major stages. Let’s look at how much each of them might cost and how much of the overall process they compensate for. Remember that the calculations below are based on a $25 hourly rate and apply to medium-complexity projects like an on-demand delivery app or a fitness app.

  1. The discovery stage is when the team analyzes the market and the target audience, calculates the risks, and develops solutions that will help the app succeed.
    Time and cost estimates: 80 hours, $2,000
  2. The UI/UX design stage is when a team of UI/UX designers decides on the app’s features and develops its visual concept. The outcomes of this stage are presented in the form of prototypes — visual mockups of each app screen.
    Time and cost estimates: 160 hours, $4,000
  3. The development stage is when a team of developers turns the prototypes into a fully functional mobile application. The following estimate includes iOS, Android, and backend development.
    Time and cost estimates: 2080 hours, $52,000
  4. Testing is the process by which QA engineers test the app and look for bugs to report to the development team so that they can be fixed.
    Time and cost estimates: 200 hours, $5,000

The project management component is an additional important component of the overall development cost. It is not a stage in and of itself, but rather a tool that assists the client and team in staying on the same page throughout the collaboration. This service takes 200 hours on average and costs $5000 for a medium-complexity project.

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9. Conclusion

There are numerous factors that can influence the cost of developing a mobile application, including whether it is native or cross-platform, simple or complex, and developed in North America, Asia, or Eastern Europe. Even with the statistics on app development costs in 2022, making an accurate estimate without knowing the specifics of the project is difficult. However, in this article, we’ve covered the most common types of mobile apps on the market, so you can get an idea of how much your project might cost.

If you’d like a more accurate estimate for a mobile app, our business development team will gladly conduct a free consultation for you.

From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

Savvycom is right where you need. Contact us now for further consultation:

Savvycom follow 6 stages to estimate the total costs, this is also the common process for other firms:

Stage 1. A client gets in touch with Savvycom about their project.

Stage 2. We contact our client to gather general information about them and the project.

Stage 3. Our project managers conduct preliminary research to develop a rough estimate.

Stage 4. We discuss with the client our rough estimated cost for the project.

Stage 5. Then, we carry out an in-depth consultation and discuss the app's functionality and design.

Stage 6. With all the information, we can deliver a more precise estimated cost for the app development project.

 

As discussed in the article, development costs are impacted by many factors. Thus, the costs may vary widely. 

If the rate is $40/hour, here is how much to pay for an app:

- Simple app: $40,000 to $60,000

- Average app: $60,000 to $150,000

- Complex app: from $300,000

In case you want to reduce the costs, it is suggested to outsource from countries like Vietnam. You will be able to own an app with the same quality but for a more affordable price.

Building an app is not cheap, but there are several ways to get around it and lessen how much you need to pay.

1. Make a detailed plan 

List out clearly what your app will need, what it serves, your strategy, and your budget for the project.

2. Outsource

Outsourcing is a clever way to save money, especially if you hire a team from a region with more reasonable rates. 

3. Test frequently

It is advised you test your app as soon as possible to find bugs and fix them before they require more effort.

4. Create an MVP/MLP

A minimum viable product (MVP), also known as a minimum lovable product (MLP), can assist you in gathering data and avoiding mistakes long before you launch.

5. Contact your developers & check on the progress frequently

Doing this keeps you and the developer team on the same page and helps you avoid major mid-development changes.

6. Find a reliable mobile app development company

Cutting costs is a goal for any business, but sometimes it is worth paying a little extra to get the quality product you desire. 

 

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What Is IT Outsourcing? Everything There Is To Know About Outsourcing Services

If the question is what is the most time- and cost-effective way to achieve the best results, the answer is IT outsourcing. Web and app development, quality assurance, UX/UI design, business analysis, DevOps, and marketing are examples of outsourced IT services.

By 2026, the revenue of the IT outsourcing sector is expected to reach $3.59 billion in the United States alone. This figure indicates that more businesses will outsource IT services, and even more will use them. For greater business efficiency, Google, GitHub, and Slack all prefer to outsource some of their tasks.

You have in front of you a comprehensive information system outsourcing guide that reveals the essential secrets of successful Outsourcing. Here’s a preview of the information treasures that await you:

  • Key outsourcing models and IT outsourcing services
  • In-Practice IT Outsourcing Advantages
  • What advantages can you gain from outsourcing IT services depending on your industry?
  • Factors influencing the cost of outsourced IT services
  • Finding outsourced IT service providers: a step-by-step guide

1. What Are Outsourced IT Services?

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IT outsourcing is the process of hiring third-party service providers to deliver some of the client’s IT processes. Outsourcing IT services aims to assist clients in developing digital products and solutions while lowering costs, accelerating time to market, and providing access to the best experts from various industries.

You can work with an onshore or offshore software development company depending on the purpose of your service outsourcing. In 2022, the following areas and benefits are on the list of top IT outsourced service locations:

  • Asia – low-cost labor with a relatively high level of service provision
  • Eastern Europe – low-cost services with high quality, strong technical experts
  • Latin America and Mexico have low development costs and no significant time differences.
  • The United States is the global development center, with no time difference but high prices.

Companies in Asia are increasingly being used for IT outsourcing. The region is unique in nature and provides numerous advantages.

Learn More On: IT Outsourcing Vietnam – Ideal Destination For Growth Hacking

2. What the IT Outsourcing Industry Looks Like Right Now

So, how does the outsourcing IT services industry look today? The industry is thriving, and nothing appears to be slowing its expansion. Here are some statistics to help you assess its size and perspective:

  • In 2019, the global outsourcing market revenue was estimated to be $92.5 billion. The market is expected to generate $359.8 billion in revenue by 2021. At a CAGR of 4.5%, the market will reach $425.19 billion by 2026. (Statista, 2022).
  • The market for outsourced IT services is expected to grow by $97.51 billion at a CAGR of 4.58% between 2020 and 2024. (Technavio, Jan 2020).
  • In 2021, approximately 25% of all companies increased their outsourcing investments (Flexera)
  • Small businesses planned to outsource some tasks in 2021 to improve efficiency and access needed resources (Clutch, 2021)
  • In 2020, 70% of businesses used an outsourced IT services provider to cut costs. (Deloitte)

Without a doubt, the market for outsourcing IT services will continue to expand due to its benefits and the increasing demand for software development services.

3. List of IT Outsourcing Services

When we talk about outsourced IT services, we mean virtually any service. The following are some of the most common software development services that you might be interested in:

  • Outsourcing software development is common among businesses requiring assistance in transforming an idea into a technical project. Development, design, quality assurance, DevOps, and other services are available.
  • Web and mobile app development services assist businesses in expanding their mobile and web presence by developing applications for the most popular mobile operating systems, such as iOS and Android.
  • Software support – After a product is released, businesses must continue to work on improvements, bug fixes, and the maintenance of their solutions.
  • Quality assurance is a critical outsourced IT service that enables businesses to test solutions to ensure that their performance and functionality meet business requirements and are bug-free.
  • UX/UI design – This service assists businesses in developing the visual aspects of their software solutions and defining the user experience. 

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4. IT Outsourcing Models

IT outsourcing services are classified into 3 categories based on their location:

  • Onshore Outsourcing entails hiring a team from within your own country, such as when a company from the United Kingdom collaborates with a local development firm.
  • Nearshore Outsourcing entails hiring a company from a nearby location, such as when a company from the United States hires a team in Mexico or Latin America.
  • Offshore Outsourcing entails hiring professionals from afar, such as a company in the United States hiring a team in Asia.

Outsourcing is a broad term that encompasses several more specific concepts. Let’s take a look at some of the most common types of IT outsourcing:

4.1. Staff Augmentation

This model of outsourced IT services is ideal for businesses that already have an in-house development team but lack specific skills such as DevOps or designers. Because companies do not always want to hire an entire team, IT staff augmentation allows them to quickly find the required talent while avoiding the hiring process’s bureaucracies.

4.2. Dedicated Team

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A small corner of Savvycom HQ In Hanoi

This type of IT services Outsourcing is appropriate for long-term projects that necessitate the participation of an entire development team. Because the development team works remotely, you can save money on recruitment, management, and office expenses.

4.3. Project-based Team

This model of outsourced IT services is appropriate for projects that require 3 to 9 months of active development. This model enables businesses to complete the required work quickly and without a lengthy recruitment process.

4.4. Offshore Dedicated Center (ODC)

This model is appropriate for large projects and companies that want complete control over the development team. Rather than hiring a team on-site, they can establish a dedicated development center in a country with better tax systems and lower labor costs. You have the option of opening your own office or partnering with an outstaffing vendor who will handle recruitment and hiring on your behalf. The team will work from your partner’s offices, and you will have complete management control.

Learn More On: Offshore Development Center (ODC): The Ultimate Guide

5. Outsourcing IT Services: Pros and Cons

Several reasons why small, medium, large, and even enterprise businesses turn to outsourced IT services. Reduced development costs, access to a larger talent pool, increased expertise, and other benefits are on the list.

Let’s take a closer look at the top 07 advantages of IT outsourcing.

5.1. Reduced Expenses

The primary reason for the popularity of outsourcing IT services today is cost reduction. This is possible for a variety of reasons, including:

  • Lower hourly rate – Some parts of the world, such as the United States, United Kingdom, Canada, and Australia, are extremely expensive to run a business in. Because of lower labor costs, outsourcing services to Asia can reduce development costs by up to 70%.
  • Paying only for work completed – one of the primary advantages of outsourcing IT services is that you only pay for work completed. When there are no tasks for a QA engineer, for example, you do not pay for their time in the same way that you do for full-time employees.

5.2. Access to Global Talent Pool

Local hiring is extremely limited. Even if you have offices in several cities, the professionals you can hire are limited to these locations. When you relocate globally, you can gain access to the best talents on the global market, including some of the most elusive experts in the world who are extremely unlikely to relocate.

5.3. All-Encompassing Expertise

A software developer cannot be expected to know everything. Even after you’ve hired a team, something could go wrong with your project. You would need to spend a lot of time on recruitment and twice as much money on salaries if you had an in-house development department. With outsourced IT services, you can hire a professional to work on your project for a week or two as soon as the need arises.

5.4. Reliable Technicians & Qualified Service

IT Outsourcing Services Savvycom 3

When you use outsourced services, you do not have to manage the recruitment process yourself. You can rely on the outsourcing firm to identify and hire the best professionals for your project. While this is true, it is far easier for these companies to hire top-tier IT talent than it is for you to hire them for a one-time project.

5.5. Significant Time Savings & Flexibility

A faster time to market is an undeniable advantage of IT outsourcing services. Because you won’t have to waste time hiring a team, you can begin the development process sooner. This means you can start the project sooner.

5.6. Ability to Upscale Quickly

You might find that your project has taken off one day. While this is good news, it will have an impact on the business because you will need to rapidly scale the development team. With in-house tech departments, you may have difficulty finding the necessary professionals right away.

Outsourced IT services alleviate these issues because vendors typically have a few experts who can supplement your team. Even if no experts are available, outsourcing companies have a large pool of professionals who can quickly join them on the project.

5.7. Uninterrupted Workflow

All of the benefits mentioned above lead to an uninterrupted workflow when all processes run smoothly and without hiccups.

A software development vendor handles the most time-consuming tasks: recruitment, office maintenance, and all employment-related paperwork. As a result, you can focus on business-related tasks while professionals work on the technical aspects of the project.

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Get in touch with Savvycom for a free consultation. We’ll help you decide on next steps, explain how the development process is organized, and provide you with a free project estimate.

6. Disadvantages of Outsourcing IT Services

Outsourcing carries risks because you entrust a significant portion of your work to a third-party vendor. Let us look at some of the disadvantages of IT outsourcing services:

  • Security concerns – When collaborating with a third-party company, you must fully understand how your partner handles security concerns and what security protocols are in place. Otherwise, you risk violating local security regulations, which could result in heavy fines or successful hacker attacks on your digital product.
  • Potential downtime can occur with both onshore and offshore Outsourcing. You may experience downtime if certain issues arise. If there are no professionals available to resolve the problem as soon as possible, it can harm your company’s reputation and cost you money.
  • Missed objectives – the primary goal of an outsourced IT services provider, is to deliver results based on your business objectives. You may not get the desired results if your objectives are not aligned.
  • Limited scalability – if you don’t have a lot of experience in software development, you won’t know whether or not the software was designed with scalability in mind. Every product should be designed with the future in mind. However, some vendors choose to sacrifice future scalability for faster product delivery, resulting in unexpected future project growth problems.

Fortunately, by selecting the right vendor, you can mitigate all of the risks associated with outsourced IT services. We’ll go over the process in greater detail later in this article. Now that we’ve discussed the benefits and drawbacks of outsourcing IT services let’s move on to the next section.

7. Industries that Can Benefit the Most from IT Outsourcing Services

Outsourced IT services are valued across all industries. Nonetheless, companies in specific industries are more likely to take this approach than companies in other industries.

Consider the following business domains that outsource the development of software development solutions to third-party vendors.

7.1. Healthcare & Medical Industry

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This is yet another industry that is reaping the benefits of IT outsourcing. Companies typically use third-party vendors to gain access to a larger talent pool at a lower cost. The medical industry can develop a wide range of mobile and web applications, as well as internal systems for managing staff and hospital processes.

Learn More On: Medical Web Development: Design, Features

7.2. On-demand Economy Domain

The on-demand economy is rapidly expanding, and the market will grow by $1,57 trillion at a CAGR of around 49% between 2020 and 2024. This is why the number of startups in the industry is increasing. These businesses frequently outsource development to third-party vendors in order to reduce time to market and focus more on business operations and processes.

7.3. E-commerce & Retail

eCommerce and retail are two other growing industries. By 2020, global online sales will have surpassed $4.2 trillion.

Innovative technologies such as ERP and CRP systems can benefit eCommerce and retail. Augmented reality, computer vision, and machine learning are actively disrupting the industry by bringing a new level of shopping experience to the consumer. Artificial intelligence elevates shopping personalization to a whole new level.

7.4. Banking & Finance

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Without a doubt, the banking and finance industries can count on money. As a result, it is actively investing in outsourced IT services to develop financial solutions, HR applications, and marketing applications. The main goal is to reduce development costs while involving the best industry experts and maintaining a high level of service delivery.

Learn More On: Mobile Banking Application Development

7.5. Automotive & Transportation

Outsourced IT services are also heavily used in the automotive industry. The industry is undergoing rapid transformations, and there is a growing demand for various in-vehicle options and systems. You can develop navigation and geospatial systems, route and fleet management systems, warehousing solutions, and other software solutions that help to streamline industry processes.

8. Outsourced IT Service Costs – Main Factors

The primary concern with outsourced IT services is the cost associated with them. The average cost of IT outsourcing services is not less than $50,000. However, the figure can change depending on a variety of factors.

The following are some of the factors that influence the final development cost, which can vary depending on the following:

  • Specifications of the Service

The more complicated the project, the more money you’ll have to pay. In terms of web development, for example, a one-page website will be much less expensive than an eCommerce marketplace.

  • Professionalism of Engineers

The cost of outsourced IT services is directly related to the level of professionalism. Senior professionals, for example, can charge several times more than middle and junior experts. However, higher prices guarantee higher competency and the assurance that you will not need to change the code of your app due to its poor quality.

  • Vendor Rates

You could pay as little as $25 per hour or as much as $250 per hour, depending on the vendor’s level of expertise. Vendor rates are determined by the location of the Outsourcing, the complexity of the project, and the business model. In a moment, we’ll go over key pricing models.

  • Region

The location of the vendor will be the first indication of their prices when selecting an IT outsourcing service. For example, going to Asia is the most financially viable option for high-level and affordable information technology outsourcing services. When compared to other regions, development costs in the United States can double or even triple.

  • Model of Collaboration

The outsourcing model also influences the cost of outsourced IT services.

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9. How To Actually Outsource Effectively: Step-by-Step

Choosing an outsourced IT services provider to work with is a strategic task that should be taken seriously. We will go over the process’s 8 key steps so that you can navigate all of them and select the best partner.

9.1. Select a Region and Country

Identify and analyze all available outsourcing locations based on skills, time differences, English proficiency, cost options, and any potential cultural differences that may interfere with the development process.

9.2. Select an Engagement Model

Do you want to be actively involved in the project and manage your team directly? Or do you want to focus on business tasks while entrusting the development to the experts? Your response will have a direct impact on the type of business collaboration model you’ll need to select.

Learn More On: 08 Best Software Development Methodologies

9.3. Create an RFP or RFI

Create a Request for Proposal (RFP) or Request for Information (RFI) that includes all project details, expected results, and the entire scope of work for outsourcing.

9.4. Select the Best Vendors

Shortlist 3-7 vendors for your project using platforms such as Clutch, ITFirms, and the Manifest. Contact them and send them your RFP to gain a better understanding of their processes and proposals.

9.5. Examine PFP Responses

Analyze responses and provide feedback. To select the best options, you may need to organize a stakeholder meeting and shortlist 1 to 3 vendors.

9.6. Conduct a video interview

Hold video meetings with the chosen vendors to learn about their expertise and assess their overall fit for your company.

Learn More On: The Essential Guide To Software Development Services

9.7. Utilize the Vendor Assessment Matrix

Create a vendor assessment matrix with key decision factors and weigh each one. This method will assist you in narrowing down vendors who are the best fit for your project.

9.8. Make final calls and negotiations

Conduct the final round of phone calls with the top 1-2 vendors. Choose a vendor and sign a contract. Congratulations! You’ve successfully chosen a vendor for outsourced IT services.

10. Savvycom – The Perfect IT Partner For You. When?

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We’re almost there, but there’s one more question to be answered. How will you know when you need to find an outsourcing firm? When deciding whether or not to hire a team, consider the following factors:

  • If you lack in-house IT expertise

This is the most common occurrence, particularly among small businesses that require the assistance of developers but do not have, do not want, or cannot afford an in-house team. Outsourced IT services enable you to collaborate with the best experts without making large upfront time and financial investments.

  • If you want to save money and find genuine experts

If this is the case, hiring help will allow you to mash two potatoes with one fork. Some tasks can be outsourced to offshore locations, allowing you to hire the best experts at lower costs.

  • If you need to supplement your in-house team

IT outsourcing services can be beneficial even if you have an in-house team. A business can outsource additional tasks such as regulatory compliance, software support, and even customer service.

  • If you want to use the best, most recent, or most mature technologies

Experts in Machine Learning, Artificial Intelligence, and Big Data are extremely expensive. Hiring in-house experts may not be an option if you need to incorporate some of the most recent innovations into your project due to the associated costs. Outsourcing IT services allows you to gain access to the most coveted talents without having to sell your kidney.

From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

Savvycom is right where you need. Contact us now for further consultation:

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Outsourcing IT services are specified into 4 models:

  • Staff augmentation: Businesses with in-house teams often prefer this model. It allows them to hire only the required talents (like DevOps, designers, etc.) without the hiring process's bureaucracies.
  • Dedicated team: If your business needs an entire team for a long-term project, this is the solution for you. 
  • Project-based team: This model is appropriate for projects that require 3 to 9 months of active development.
  • Offshore dedicated center (ODC): This model is suitable for large projects and companies that want complete control over the development team. If you choose ODC, the firm will establish a development center in the country with better tax systems and lower labor costs.

IT outsourcing services are beneficial if you do it right. And in order to outsource efficiently, avoid making these mistakes:

  • Not research before choosing a vendor
  • Make unclear requirements and miscommunicate
  • Outsource companies that are not in sync with modern technologies and trends
  • Work with a lack of basic technical know-how on your end
  • Underestimate Quality Assurance (QA) or Testing

To be able to select the best partner for your business, it is advised that you follow this process:

  1. Select a region and country (based on the required skills, costs, and other factors regarding your business and project)
  2. Select an engagement model (whether you prefer complete control or entrust it to the experts)
  3. Create an RFP (Request for Proposal) or RFI (Request for Information) with all project details and work scope for outsourcing.
  4. Shortlist the best vendors and send them your RFP/RFI to see their proposals.
  5. Examine PFP responses to pick out 1-3 best vendors.
  6. Conduct video interview(s) to assess their fit to your company
  7. Use a vendor assessment metrix with key decision factors and weigh each one to decide on the final vendor to become your partner.
  8. Make the final calls and negotiations. Now all you need to do is sign a contract with your vendor!

IT outsourcing services mean big help for many industries, even the ones you have thought that there is no need for outsourcing.

But the following industries are the ones expected to expand remarkably with the support of IT outsourcing services:

  • Education
  • Healthcare and Medical 
  • Banking & Finance
  • On-demand economy domain
  • E-commerce & retail
  • Transportation & Logistics
  • Media
  • Government
  • Construction
  • Tech 

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Top 10 Software Development Companies in Vietnam

Vietnam’s Information and Communications Technology (ICT) sector has an average yearly growth of 9.8% for the last five years with annual revenue of $110 billion in 2019, a 14% contribution to the country’s GDP. Thanks to its growing IT infrastructure, improving logistics and regulatory environment, and business-friendly economic reforms – it is now emerging as an outsourcing destination in the Asia-Pacific region. Therefore, outsourcing to Vietnam has become a strategic option for businesses wanting to cut cost on fixed headcount. 

In this article, we are going to audit the state of outsourcing in Vietnam, as well as publishing a list of 10 best software development companies in Vietnam so that you have a full view of why and how you can hire software development services in this competitive market.

1. Why Outsource To Software Development Companies?

Top Software Development Companies In Vietnam | Savvycom -1

During this pandemic, businesses across the world are cutting down on local staff. Some are deferring their planned IT projects until a more stable time, and some are canceling projects indefinitely. The savior for all such companies is IT outsourcing.

Outsourcing is a business practice in which certain company functions are assigned to outside service providers rather than performed in house. In other words, a company seeks external help or support to perform some of its business activities so it can stay focused on core business goals while saving time and money. In today’s tough scenario, businesses can survive through software outsourcing services – and some businesses might even be able to come out of this pandemic doing well.

The outsourcing industry has been an integral partner in companies’ crisis responses across sectors. Offshore software development to another country such as Vietnam is a smart decision that companies should consider to maximize their productivity in a cost-effective manner. This proven approach has led to many successful projects, as it allows a business to focus on its core competencies. It should be used as a strategy that can really boost a business.

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2. Vietnam – Ideal Destination For Offshoring

1. Pandemic Stabilization

Recognizing that its medical system would soon become overwhelmed by even mild spread of the virus, Vietnam chose prevention early and on a massive scale. The country reported one of the least cases in Southeast Asia with minimal deaths. We are also featured in various reputable newspapers for our relentless efforts and successful pandemic countermeasures. This has given businesses based in Vietnam a head start over global competitors at this time.

Update 16/5/2022:

  • Over 80% of Vietnam’s population has been fully vaccinated.
  • Vietnam has dropped the Covid-19 test requirement for foreign arrivals from May 15
  • The recovery rate is 87.5%, while the Fatality rate is only 0.4%

2. Cost-Effectiveness

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According to Innotech, outsourcing software development in Vietnam costs 50% less than the rivals from India and China. Anderson Vietnam also estimates that outsourcing per person in Vietnam is only $20,000 per person a year compared to $40,000 per person in India. These figures are convincing enough to place Vietnam as the top future contender for offshore development projects. 

As Indian companies enter the maturing cycle, the cost differential between India and Vietnam will increase even further. The outsourcing costs in India are most likely to increase in the coming years.

3. Potential Workforce

Human capital in Vietnam is witnessing positive trends. Some of the most notable highlights in Vietnam IT workforce in recent years are:

  • Top 7 countries in Asia with the highest EF EPI Average.
  • Top 5 countries in Asia with the fastest improvement in English skills.
  • Top 10 countries in the world with the most engineering graduates.
  • Top 10 countries of origin of international students in key study-abroad markets.
  • Top 10 countries in Asia Pacific with the highest Human Capital Index.
  • Top 10 in regional groups in global attraction and global knowledge skills.
  • Top 30 countries in the world and top 2 in SEA countries for basic academic skills.

Moreover, Vietnam has a population of over 90 million people and over 60% of the population is under 30 years of age. With that being one of the countries with a young population, the Vietnamese – or Vietnamese workforce specifically – are perceived to be fast learners, dynamic, innovative, tech-savvy and flexible to changes. 

4. Knowledge & Skills

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As the surge of technology is making a significant impact on every generation, more and more STEM majors, schools and academies are opened to encourage the young to invest their talents in technology and relevant sectors and hone their skills. The rapid development in both quantity and quality of IT education in Vietnam provides an extensive supply of software developers for Vietnam outsourcing companies in the years to come. 

On the other hand, Vietnam students are often appraised for their fast absorption of knowledge, most of them have good to excellent academic background as certified by standardized exams, endorsements from global recruiters, honours and awards. 

5. Vietnam’s Developers Ranking

Skillvalue 29th

worldwide in developer skills charts of skillvalue’s report 2018

Topcoder Top 6

worldwide in developer skills charts of topcoder report 2016

Hackerrank 23rd

worldwide in developer skills charts of hackerrank’s report 2016

AI Development

The first two scientific researches at neurips – top 1 conference in the world about artificial intelligence in canada from artificial intelligence research lab vinai research

Workers in Vietnam have extensive English language training. Because the majority of the software engineers you’ll be hiring are college graduates, they’ll have attended English classes throughout the years and will most likely be fluent in English already.

With that said, it is considerably easier to outsource to other countries when you have solid English communication abilities. If you want to work in software engineering or business process outsourcing, you should have excellent communication skills.

Learn More On: Why Vietnam a Top IT Outsourcing Destination!!

3. Top 10 Software Development Companies In Vietnam

A glance back at 2021 from Savvycom Team

Many organizations would be unable to increase their efficiency and achieve the desired level of satisfaction without software development companies’ assistance and technological expertise. With the ever-increasing technical demands, it’s critical to choose the right company to guide you through the process and help you find the best solutions. Here are some of the top software development companies in Vietnam in 2021 that will find the most cost-effective ways to achieve their objectives:

1. Savvycom

Savvycom is one of the leading Information Technology companies in Vietnam, specializing in providing digital transformation consulting services and software solutions in finance, healthcare, and retail for domestic and international businesses. Headquartered in Hanoi and with three representative offices located in Ho Chi Minh City, USA, and Australia, the company’s mission is to leverage engineering resources in Vietnam and empower businesses worldwide by utilizing the power of technology, becoming a leading IT company in the ASEAN region and beyond.

The company’s successes are reflected in its 100+ endorsements from clients, including Fortune 500 companies, in its receipt of more than 20 international honors and awards, and in its strategic partnerships with technology brands such as Apple, AWS, and Microsoft.

Learn More About Savvycom On:
Savvycom Website

Clutch:

The Manifest:

Dribbble
Behance

2. KMS Technology

KMS Technology is a U.S.-based engineering and services firm with development centers in Vietnam, founded in 2009. International clients rely on KMS Technology because of the high quality of its products and the expertise of its Vietnamese engineers.

KMS is dedicated to making a long-term social impact by partnering with non-profit organizations that provide fair and better employment opportunities for disadvantaged students. In Vietnam, the company collaborates with universities regularly, participates in IT training activities and specialized events, and sponsors scholarship programs.

Learn More About KMS Technology On:

3. Rikkeisoft

Rikkeisoft provides software services and solutions for clients worldwide, ranging from Web/Cloud Systems, Mobile Applications, Games, and Blockchain to AI, IoT, Business Processing, and Embedded Systems. Eight years after being founded in 2012, they have successfully established three branches around Vietnam and three affiliated companies. They take pride in our mission of building better lives through advanced technology for people. Their vision is to have 10,000 employees by 2025 and become one of the top Vietnamese software development companies in Southeast Asia.

Learn More About Rikkeisoft On:

4. Positive Thinking Vietnam

Positive Thinking Company is a global independent tech consultancy group with a team of more than 3,500 talented tech specialists on the ground in over 35 cities across Europe, the USA, Asia, Australia, and Africa, they serve clients of all sizes. They believe collaboration betters our world. Their unique open ecosystem model allows us to deliver end-to-end tech solutions. Their services draw on a wide array of expertise, including apps & platforms, security, cloud, data & analytics, hyper-automation, and digital workplace.

Learn More Positive Thinking Vietnam On:

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5. CMC Global

CMC Global is a subsidiary of CMC Corporation with the goal of bringing Vietnamese ICT products, solutions, and services to the international market. We are proud to be the leading company in Vietnam in providing a wide variety of comprehensive IT Solutions & Services, ranging from traditional services to Digital Transformation, as well as Consultancy, to organizations worldwide, having been established in March 2017 as a strategic move by the Corporation to enter the global stage.

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6. Tpp Technology

In Viet Nam, TP&P is one of the leading, highly diversified, and pioneering IT service providers and investment management firms. TP&P applies its extensive experience and specialized knowledge to various technology startup investment and service provision strategies, including software development, development and cloud management, and business consulting.

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7. Smart OSC

SmartOSC is a full-service e-commerce agency that was founded in 2006. Lotte, Courts, PayPal, Boozt, SpaceX, Smartbox, eWAY, Priceline Pharmacy, Club 21, Delta Apparel are among the company’s more than 500 global clients. SmartOSC has a global presence with 500+ employees and offices in Vietnam, Australia, Singapore, the United States, and the United Kingdom as of January 2017.

SmartOSC provides consulting, UI/UX design, development, and managed services, among other things. The technical and business expertise of the company is based on a few platforms: Magento, Sitecore, Adobe, Hybris, and Kentico.

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8. NashTech Vietnam

NashTech strives to create a nurturing environment that facilitates the growth of our employees, professionally and personally. They put effort, determination and ambition into creating a second home for their employees, where everyone is encouraged to be their most authentic self.

Learn More About NashTech Vietnam On:

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9. Orient Software

Orient Software began operations in 2005. Orient is currently one of the leading software development companies in Vietnam. Orient’s strong team of 315 skilled and experienced IT experts collaborate to provide software development solutions to clients with small to corporate-sized businesses worldwide after more than 15 years of providing professional IT solutions.

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10. Saigon Technology

Saigon Technology Solutions is Vietnam software development outsourcing company focused on delivering cost-effective solutions to its clients. Its customers are located in the US, the UK, Australia, Germany, and the Netherlands. Their services include custom application development, web application development, and mobile application development. It is listed among the top software development companies around the world. Additionally, Saigon Technology Team also provides .NET Core, Java, PHP, ReactJS, Angular, Azure, AWS, microservices, and machine learning. Some of its impressive clientele include Kaercher, Abbott, Panasonic, Topicus, and DMI Inc.

Learn More About Saigon Technology On:

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From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

Savvycom is right where you need. Contact us now for further consultation:

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Software Development Outsourcing: Your Guide To Success In 2023

Post-pandemic realities have altered the world, forcing nearly everyone to work remotely. In this light, outsourcing software development is the most natural and appropriate option, gaining popularity today. According to Statista, the outsourcing market should have reached $413.72 billion by the end of 2021. This demonstrates the popularity of outsourcing services.

Also, according to Grand View Research, the compound annual growth rate (CAGR) of the global outsourcing market value is expected to be around 8.5% from 2021 to 2028. (compared to one in 2020). We’ve put together this 2022 guide to show you how to profitably outsource software development using all of its options.

1. What is Software Development Outsourcing?

“Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally, and sometimes involves transferring employees and assets from one firm to another. The term outsourcing, which came from the phrase outside resourcing, originated no later than 1981.Wikipedia

To begin, let us define the essence of IT outsourcing. This is the process of transferring a software development workflow (or a portion of one) from a client’s company to a vendor’s. The vendor’s staff continues to work on their locations and remotely completes the tasks assigned by the client. Let’s look at some outsourcing models now.

1.1. Onshore vs. Offshore vs. Nearshore

Why Companies Outsource Software Development 3

Savvycom HQ in Hanoi, Vietnam

Software development outsourcing is classified into several types based on location and the client’s relationship with the vendor’s company. The following types of location-based outsourcing exist, depending on the distance between the customer and the IT service provider:

Offshore Outsourcing
Offshore software outsourcing is all about working with companies located in a completely different part of the world. Offshoring usually refers to working with teams in far-away countries with a benefit that cannot be beaten “The cost”. The price for offshoring could sometimes go as low as $20 making it the perfect choice for saving a lot of development budget.
Nearshore Outsourcing
Delegating software development responsibilities to an extended team in a nearby country, usually in similar time zones, is referred to as nearshore outsourcing. Nearshore outsourcing is probably identical to offshore outsourcing expect that it matches your company with workers in similar time zones and geographic proximity.
Onshore Outsourcing
Onshore outsourcing is when you hire services to assist your company from within the same country. Onshore outsourcing is the closest to home because you are working with a company located in your home country. The advantage of onshore outsourcing is that you’re working with a highly skilled software engineer in your own country.
Learn More On: A Guide To Dedicated Development Team

1.2. Relationship-based Outsourcing

Relationship-based outsourcing is classified based on business objectives and the type of management your project requires. According to these criteria, the two most common outsourcing models are:

The project-based
When a client company requires additional technical expertise for a project, they hire an outsourcing development team to build the product and manage the workflow. The scope of work (as well as the payments) is fixed and intended for quick completion and delivery.
The specialist model
The specialist model entails the hired outsourcing company developing the product (filling gaps in the company’s technical knowledge) under the control of the client project manager or an in-house team. The adaptable work scope distinguishes this model (and the flexible rates, paid hourly or monthly). It is done to supplement the client’s company’s staff.

1.3. Outsource vs. Outstaff: What to Choose?

Most businesses prefer to save time, money, and effort by outsourcing and outstaffing development services to meet their business needs. They are not, however, equal, and let’s look at what these terms mean and how they differ.

Outsourcing is a remote software development process transferred to another company with complete control over the project’s execution. Outstaffing entails a remote development workflow; however, the hired specialists from the vendor’s company are transferred to the client’s staff for work, and the client is considered their new employer.

Feature Outsourcing Outstaffing

Costs

Higher than for outstaff

Lower

HR recruiting & management

Controlled by vendor

Controlled by the client, who functions as the PM, while the vendor runs the payroll

Responsibility for the project

The vendor’s one

The client’s one

Software/hardware purchase & other needs

On the vendor’s side

Needed to be bought by the client

Communication processes

Flexible: may be organized on demand

Can be complicated to organize

The models described here depend entirely on your company’s needs and requirements. Outsourcing development can save you time and money when launching a new project, especially if your in-house team is working on another one. If you require IT specialists immediately but lack the time and skills to hire them, you can use outstaffing services.

Learn More On: 08 Best Software Development Methodologies

2. Main Geographic Regions for Outsource

Finding the right specialists for a project is critical to its success. The question is, where do you look for them? See below for the most popular places and regions to outsource software development.

Asia
Vietnam, Singapore, Philippines, Indonesia – Prominent IT specialists pool, low costs for outsourcing projects, all in all an excellent choice for those who are new on the block and are looking for an ideal IT Partner or for those are already familiar with outsourcing services.
Eastern Europe
Ukraine, Poland – Among the best location to obtain a top-notch and cost-effective product thanks to reasonable operating expenses.
Western Europe & North America
United Kingdom, Netherlands, Switzerland; USA, Canada – The long-held traditions, the absence of cultural and language barriers with English-speaking countries. High outsourcing prices.
South America
Brazil, Colombia, Chile, Argentina – Adequate development quality and reasonable costs, the minimal time zone difference with North America. Outsourcing development is a new direction of this continent’s activity.

It should be noted that Vietnam is becoming one of the leading regions for outsourcing IT development due to its favorable quality-price ratio and thriving technical ecosystem, which includes a large pool of tech experts and the growing absence of language barriers.

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3. When to Outsource Software Development

On various occasions of software development, outsourcing can be a reliable helper. So, let us take a closer look at the most common reasons why you should use outsourcing services.

3.1. Budget concerns

Starting new projects and hiring skilled employees is always expensive, so the budget issue is critical when deciding whether to outsource. You can also apply for outsourcing services if you are a startup owner with limited funding, if your company wants to increase expenses for digital optimization, or if onshore services are too expensive for you. Furthermore, outsourcing is transparent; you can always understand what you’re paying for.

3.2. Time constraint

To achieve satisfactory results, every project must be managed appropriately. But what if you’ve already been working on a complex project and need to start another but don’t have the time? In this case, you can concentrate on your business while seeking assistance from an outsourcing software development team. An experienced vendor will carefully manage the construction process and report all results.

Learn More On: All You Need To Know About Software Development Process

3.3. Talents are required

Assume you’ve planned a large project based on complex technologies that will necessitate machine learning (ML). Because ML engineers are difficult to find for your in-house team, you would waste a lot of time looking for them. However, you can avoid these issues by working with an outsourcing company specializing in machine learning.

3.4. Security threats

Without relevant experience, it is difficult to provide data safety and security. This is a significant challenge: according to IBM statistics, a single data leak costs your company $4 million. However, you can deal with it without incurring costs: contact an IT outsourcing company; they are skilled at resolving such issues.

4. Advantages of Using Outsourced Services

Now we’ll go over the main reasons for outsourcing development:

4.1. Cost-cutting measures

One of the primary advantages of outsourcing IT services is cost-effectiveness. By selecting one of the outsourcing destinations with the best hourly wages, you can hire a team to help you build a successful product while reducing the costs associated with development workflow.

4.2. Scalability

Outsourcing represents a large pool of technical talent from around the world. You can outsource software development if you need to deal with new domains and build cutting-edge products (or if you need more flexible and quick solutions while your in-house staff grows in quantity and quality). According to Clutch, 8 out of 10 small businesses want to outsource business functions, and one of the reasons is scalability.

4.3. Increased adaptability

According to Capital Counselor data, 16% of startup businesses outsource software development to achieve flexibility. You have control over the scope of work you obtain and can allocate financial and human resources based on workloads. However, this does not imply that you should have a large team and pay all specialists; outsourcing allows you to use only the funds necessary to complete one or more tasks.

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4.4 Increasing customer loyalty

Top-notch services and well-trained employees keep customers returning to your company. You can leave your customers feeling cared for and satisfied with a bug-free product that meets their needs with the help of an outsourcing team. Remember that the more satisfied your customers are, the more profitable your company will be

Basecamp, a successful company that provides teamwork services, can back up the statements above. They discovered that their instruments became less supportive and faster as the number of clients increased. So they outsourced the work on the improvements to an outsourcing company, and the results were quick. According to statistics, there are currently approximately 3.3 million Basecamp clients.

5. The Most Common Obstacles to Outsourcing

Despite its apparent efficiency, outsourcing is not a perfect process. So, what are the difficulties you may face when working with an outsourcing vendor?

5.1. Communication difficulty

This is one of the most common outsourcing issues for various reasons. For example, your communication may suffer due to your vendor’s poor command of the English language. Choose an IT partner, check their English level beforehand, and discuss it with the company’s representative or separately with team members to deal with it.

Another common issue is the significant time difference. It can also be regulated by creating a meeting schedule (appropriate for you and the vendor) that allows you to properly set up communication. Cleveroad specialists, for example, select the following tools for external communication:

  • Google Meet, Slack, and Zoom. Services for communicating with customers via text messages and video calls
  • Figma, InVision Web design tools for client collaboration and visual component creation

5.2. Selecting an Outsourcing Team

Outsourcing teams work from home. It means you’ll rarely see any of them (especially if you don’t go to the vendor’s place of business). So, how do you select, vet, and hire a team that is physically distant from you?

You should first consider your project objectives and conduct a small business analysis. Define your market niche, conduct competitor analysis, and plan the outsourcing software functionality to save money and understand what you want from the upcoming solution.

Next, choose a company by reading reviews on rating and hiring platforms, Dribbble/Behance sites, and so on. When deciding on a vendor, look into their portfolio, business ratings, and expertise domains. The most important stage you should go through is a discussion with the company representative about data security, the project budget, and any other issues that need to be resolved.

Learn More On: Why Do Companies Outsource Software Development?

5.3. Enhancing Product Security

Data leakage is one of today’s most pressing issues, and working with a vendor always entails sharing some information. You can solve it by approaching a partner company and signing an NDA.

Furthermore, you should ask the vendor if they use security tools like user privacy policies, private data storage, and encryption or if their solutions comply with the General Data Protection Regulation (GDPR), and so on.

5.4. Quality of Development

If you value quality over quantity, you should start caring about it now. Examine your upcoming team’s skill set (both hard and soft skills). Remember that both types of skills are necessary for a successful development process. Furthermore, you should be involved in the software outsourcing workflow, attending every meeting to keep track of the business situation and understand the team’s daily issues.

6. What Should You Do Before You Sign a Contract?

Software Development Outsourcing 2

You should be concerned about the quality of future collaboration. This is why you should take some precautions before signing a contract with your new IT partner. But remember that you should not hire the first team offering quick results at rock-bottom prices. The trustworthy vendor will question you extensively to understand your needs and build a solution that meets your business requirements.

6.1. Examine the Comments

Nobody knows the quality of the company’s work better than its previous clients. Open the profile of your future IT partner on sites like Clutch, GoodFirms, or Upwork to get their feedback. If that isn’t enough, don’t be afraid to contact the review authors via social media (or any other convenient method) and discuss everything about working with the specific company.

6.2. Talk and Listen

When speaking with the vendor, begin by defining your objectives. Determine how much time they will need to implement that. Tell us about the improvements you’d like to see and how you plan to achieve them. During the conversation, take note of their level of creativity and openness to collaboration.

Do not be afraid to ask questions (even awkward ones). You can, for example, discuss with the vendor:

  • What is included in the budget? What features and services are included in the price? Are there any other options?
  • What services do outsourcing software developers provide for product maintenance?
  • Is it possible to change the feature set while it is being developed?
  • Is it okay if I bring my own design?

This is not a comprehensive questionnaire to be discussed with your partner company representative; however, you can expand it based on your project requirements and questions of interest.

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6.3. Request Their Portfolio

If you want to learn more about your vendor’s technical expertise, request a portfolio. Using examples of their projects will give you a complete picture of the company’s expertise. Check their experience in the domain to find a partner with the necessary IT background. For example, if you need to create an educational product, look for a company specializing in e-learning. View Savvycom Portfolio on Behance!

6.4. Study the Documents

You’ve discussed the app concept and other essential details, but you need to know how things are documented. During the development process, the following documents are frequently used:

  • The Service Level Agreement (SLA) is a mini-contract that describes what you should expect from the vendor and the quality of their services.
  • A schedule of Values (SoV) can gradually show the project development from beginning to end and assist you in getting acknowledged with every item required.
  • The Software Requirement Specification (SRS) is a set of requirements for software products that will assist you in understanding how they work.

6.5. Track and communicate

At this point, you should think about how to contact the team and how to monitor the development workflow. Well, you can communicate with the team via Google Meet, Zoom, etc. But still, it is recommended that you understand the company’s project management approach to achieve results. You may be familiar with it to determine the time of obtaining the final product, whether it is Agile methodology designed for flexible teamwork coordination or Scrum with its sprints.

7. Outsourcing Software Development Process

Software Development Outsourcing 1

All the details have been worked out, and all the contracts have been signed. It is now time to begin outsourcing software development. Let’s take a look at the steps it takes using Savvycom as an example:

7.1. Discovery (Planning)

The primary goal of this step is to organize and prepare the project for development by identifying all requirements in greater detail. It’s also time to discuss UI/UX design and other vital issues. At the same time, the project team creates a detailed estimate for two sprints of development based on agreed-upon user stories/designs.

The discovery stage allows you to collect data that will be useful to designers, developers, and other specialists who will be creating the required product. For outsourced software development, it includes rough estimates, sprint specifications, wireframes, and the project team composition.

7.2. Prototyping and Design

The design phase begins once the specifications and wireframes have been approved. The UI/UX designers are concerned with developing a high-quality visual concept and start developing prototypes. Prototypes are final-design model sets that serve as the foundation for UI development. Each screen of the application has its own prototype.

Learn More On: Top 10 Software Development Companies in Vietnam

7.3. Development of Software

The development phase (the longest in development) is designed to build the app architecture and create a solution that meets all of your requirements.

Due to the project’s complexity, you can work with a variety of specialists (such as iOS/Android or web developers) to provide the proper embodiment for all the required features. This process structure is divided into sprints (1 sprint equals 10 working days as usual), and each one begins with planning, during which the team discusses the workload they will do.

7.4. Testing

QA specialists must verify that the project meets the requirements when the codes are written. They test the product’s frontend and backend to find bugs and create bug reports for developers. After everything has been fixed, the QA engineers double-check the solution to ensure it works properly.

7.5. Maintenance and Release

This stage is for the product to be published on marketplaces. The specialists also maintain the developed app to make it easier for customers. As a result, collaboration with the development team should be maintained. This stage’s workload frequently includes bug fixes, additional functionality supplementation, and modernization.

8. How Much Will It Cost You to Outsource Software Development?

We’ve arrived at one of the most important points: how much will software outsourcing development cost? You should take note of the service set and team composition to get an answer to this question. The following specialists should be included on the list of outsourcing software development teams:

  • A project supervisor (PM). A project manager is responsible for project planning, organization, and reporting to the client on tasks completed. They also ensure that the created product meets the needs of the client.
  • A frontend designer. This team member is in charge of developing the product’s client-side.
  • A backend programmer. It is a specialist who constructs the “brain” of the solution, which includes all of the product parts that are not visible to the client but are critical (such as data processing mechanisms, integrations, etc.)
Learn More On: Software Project Estimation: The First Step To Success
  • A user interface/user experience designer. This specialist is in charge of developing a seamless user experience (UX), intuitive navigation, and appealing interface that will satisfy the client.
  • Engineers in quality assurance. These team members monitor each stage of software development to ensure that the product components meet international development standards and are free of flaws.
  • Specialists from other fields. Depending on the needs of your development outsourcing project, solution architects, DevOps, and so on may be required.
Outsourcing destinations Wages for an hour of work (in US$/h)

Asia

25 – 35

Eastern Europe

30 – 55

Western Europe

60 – 75

North America

100 – 150

South America

40 – 50

Average hourly outsourcing wages for developers’ services (according to Clutch & GoodFirms)

9. Software Outsourcing Vietnam

The primary benefit of outsourcing to Vietnam is the country’s youthful population. In Vietnam, approximately 70% of the population is under 35, and roughly 45 percent is between 15 and 35. This advantage in terms of age suggests that about half of the population is ready to work. According to TopDev’s report, Vietnam has about 400.000 IT Engineers and over 50.000 graduated IT Students from over 153 IT Institutions per year.

  • Vietnam ranks 29th in terms of Skillvalue Worldwide in the Developer Skills Chart Of Skill Value Report in 2018.
  • Top 06 worldwide in Developer Skills Charts Of Topcoder Report in 2016.
  • Rank 23rd worldwide in Developer Skills Charts of Hackerrank’s Report in 2016.

Soon, Vietnam will be the destination for many significant technology corporations in the world. For example, apple’s supply chain Vice President Rory Sexton said Apple is ready to meet up and find opportunities for future cooperation with Vietnam ICT enterprises wishing to join Apple’s supply chain.
Besides Samsung – one of the foreign capital corporations that help accelerate Vietnam’s economy, the participation of Apple in the future probably will continue to strengthen Vietnam’s wave of foreign investment in 2020. Notably, in 2020, Samsung said they would invest an additional $300 million in R&D in Hanoi and needs 4,000 more IT employees in the near future.

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10. Successful Software Outsourcing Case Studies

Companies and employees are shifting to remote work. As of March 2020, 16 million U.S. workers started working remotely. According to Gartner, nearly 74% CFOs plan to shift at least 5% of previously on-site employees to permanently remote positions after the quarantine.

Additionally, nearly 75% of companies currently outsource IT services, while 87% are planning to outsource at the same or an increased pace. Considering the tech talent shortage, outsourcing is becoming even more desirable, as it solves a number of problems ranging from cutting software development costs to the challenge of finding the needed specialists.

To learn how companies grow their businesses and outrun competitors on the global market via cooperating with remote teams, we examined 04 IT outsourcing case studies

GitHub

Although GitHub has become an essential platform for developers to document, share, and edit private code, much of its backend was built by an outsourcer.

At a Ruby on Rails meetup in San Francisco, GitHub’s current CIO, Scott Chacon, met GitHub CEO and co-founder Chris Wanstrath, who was impressed by Scott’s impressive knowledge of Gits.

Because the GitHub team couldn’t afford to hire Scott on a full-time basis, they hired him to write Gist, the platform’s sharing feature, which is still in use today.

Slack

Slack is one of the tools that owe its success to software outsourcing, as the company hired a Canadian design team MetaLab to help them develop the beta version into a successful product.

By outsourcing website or logo design, web, and mobile applications, the company roughly raised a $250 million investment for a total valuation of $5 billion in July 2017. Their valuation in August 2018 showed that Slack at that time stands at $7.1 billion.

Skype

While video conferencing is now commonplace, Skype was a forerunner in the early 2000s when it came to video calling.

Without three Estonian developers, Jaan Tallinn, Ahti Heinla, and Priit Kasesalu, who developed the app’s entire backend, none of their success would have been possible.

While the programmers eventually became partners, their work as an outsourced team helped the product become a widely used tool for businesses all over the world.

WhatsApp

With barely any starting capital roughly around $250,000. WhatsApp needed to keep operation costs down.

To build and launch the product, the company turned to Eastern Europe in an attempt to source the required tech talent.

From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

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When outsourcing, the location of your vendor is one of the key factors which will affect your decision. Below are the best regions for outsourcing - regarding the costs, experience, product quality, technology, and communication efficiency:

  • Asia - Vietnam, Singapore, Philippines, Indonesia: low costs, enormous pools of IT specialists, and quality services.
  • Eastern Europe - Ukraine, Poland: top-notch services and cost-effective products.
  • Western Europe & North America - UK, Netherlands, Switzerland, USA, Canada: recognized expertise with no language barriers with English-speaking countries, but expensive charges.
  • South America - Brazil, Colombia, Chile, Argentina: Good development quality and affordable products.

Let's go through the main advantages a business receives when they outsource:

  • Cost-cutting measures: As a business selects an affordable outsourcing service partner, they can receive a great product for a lower cost.
  • Scalability: Outsourcing offers businesses the ability to scale up or down quickly regarding their demands.
  • Increased adaptability: With an outsourced team, a business can allocate the effort to focus on its core aspects, and get its product developed by an experienced team under their supervision. 
  • Improve customer loyalty: Quality products equal higher customer loyalty. Thus, if you have your product outsourced and it delivers customers a good experience, they will stay with you longer.

Surely outsourcing is beneficial, but you may also encounter some serious challenges with this model.

By acknowledging these problems, one can be more prepared for successful outsourcing development:

  • Communication obstacles: When outsourcing, a client and its vendor probably need to use a popular language like English. Yet if a side does not have a decent language level, their communication will suffer. 
  • Selecting an outsourcing team: To pick the right outsourcing team, you need to go through quite some steps - from studying your product objectives, analyzing your business, finding vendors, shortlisting, and reviewing to come to the decision. 
  • Improving product security: A data leakage may happen when outsourcing if you don't implement secure solutions to product your company's and product's information. 
  • Ensuring development quality:

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Top IT Outsourcing Companies In Vietnam

Software outsourcing services are in high demand due to their benefits over in-house development. The trend of software development outsourcing is growing as businesses increasingly prefer to outsource their work to other outsourcing service providers or individuals outside their organization. This would allow them to concentrate on their primary job roles and responsibilities.

In recent years, mainly as digital transformation has grown in popularity, Vietnam has emerged as one of Asia’s most popular outsourcing destinations, with many IT service providers like Savvycom. It provides an excellent balance of quality, affordability, and delivery speed, which has made it a new and promising destination for software outsourcing and technology services.

Top 10 IT Outsourcing Companies In Vietnam

Many organizations would be unable to increase their efficiency and achieve the desired level of satisfaction without software development companies’ assistance and technological expertise. With the ever-increasing technical demands, it’s critical to choose the right company to guide you through the process and help you find the best solutions. Here are some of the top software development companies in Vietnam in 2021 that will find the most cost-effective ways to achieve their objectives:

1. Savvycom

By 2025 Savvycom is looking to be Vietnam’s powerhouse in providing IT Outsourcing Services with over 1500+ fully trained, English-proficient Developers

Savvycom is among the top IT Outsourcing Companies in Vietnam, specializing in providing Digital Transformation consulting services and software solutions in finance, healthcare, and retail for domestic and international businesses. Headquartered in Hanoi and with three representative offices located in Ho Chi Minh City, USA, and Australia, the company’s mission is to leverage engineering resources in Vietnam and empower businesses worldwide by utilizing the power of technology, becoming a leading IT company in the ASEAN region and beyond.

The company’s successes are reflected in its 100+ endorsements from clients, including Fortune 500 companies, in its receipt of more than 20 international honors and awards, and in its strategic partnerships with technology brands such as Apple, AWS, and Microsoft. Savvycom is proud to be accredited as Apple Consultants Network Partner in Vietnam!

Learn More About Savvycom On:
Savvycom Website

Clutch:

The Manifest:

Dribbble
Behance

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2. KMS Technology

KMS Technology is a technology service company based in the United States and Vietnam that specializes in software development, testing, and IT consulting. With its headquarters and branch offices in the leading and emerging IT market destinations, KMS Technology is able to reach out to clients and deliver the most effective solutions for specific scenarios.

This company approaches the market with a customer-centric approach, which means that their process, work, and operations are aligned with those of their customers. KMS Technology assists their clients in the digital transformation that will later help them grow their core business through a collaborative partnership and industry-leading solutions.

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3. Rikkeisoft

Rikkeisoft provides software services and solutions for clients worldwide, ranging from Web/Cloud Systems, Mobile Applications, Games, and Blockchain to AI, IoT, Business Processing, and Embedded Systems. Eight years after being founded in 2012, they have successfully established three branches around Vietnam and three affiliated companies. They take pride in the mission of building better lives through advanced technology for people. Their vision is to have 10,000 employees by 2025 and become one of the top Vietnamese software development companies in Southeast Asia.

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4. Positive Thinking Vietnam

Positive Thinking Company is a global independent tech consultancy group with a team of more than 3,500 talented tech specialists on the ground in over 35 cities across Europe, the USA, Asia, Australia, and Africa, they serve clients of all sizes. They believe collaboration betters the world. Their unique open ecosystem model allows them to deliver end-to-end tech solutions. Their services draw on a wide array of expertise, including apps & platforms, security, cloud, data & analytics, hyper-automation, and digital workplace.

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5. CMC Global

CMC Global is a top IT outsourcing company in Vietnam that offers highly customized and high-quality services such as Cloud Migration, Custom Software Development, RPA Service Implementation, and Cloud Service Management. CMC has completed more than 200 successful projects of varying sizes. CMC Global, with a current workforce of over 3500 IT professionals, can be an ideal partner for large-scale software development projects.

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6. Tpp Technology

In Viet Nam, TP&P is one of the leading, highly diversified, and pioneering IT service providers and investment management firms. TP&P applies its extensive experience and specialized knowledge to various technology startup investment and service provision strategies, including software development, development and cloud management, and business consulting.

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7. Smart OSC

SmartOSC is a full-service e-commerce agency that was founded in 2006. Lotte, Courts, PayPal, Boozt, SpaceX, Smartbox, eWAY, Priceline Pharmacy, Club 21, and Delta Apparel are among the company’s more than 500 global clients. SmartOSC has a global presence with 500+ employees and offices in Vietnam, Australia, Singapore, the United States, and the United Kingdom as of January 2017.

SmartOSC provides consulting, UI/UX design, development, and managed services, among other things. The technical and business expertise of the company is based on a few platforms: Magento, Sitecore, Adobe, Hybris, and Kentico.

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8. NashTech Vietnam

Harvey Nash Group operates an IT outsourcing company in Vietnam. The company offers first-rate services and customer-centric solutions tailored to specific client needs worldwide. NashTech’s key outsourcing services include digital transformation, software development, and technology consulting. NashTech’s target markets include Australia, the United Kingdom, Singapore, the United States, Japan, and Vietnam.

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9. Orient Software

Orient Software began operations in 2005. Orient is currently one of the leading software development companies in Vietnam. Orient’s strong team of 315 skilled and experienced IT experts collaborate to provide software development solutions to clients with small to corporate-sized businesses worldwide after more than 15 years of providing professional IT solutions.

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10. Saigon Technology

Saigon Technology Solutions is a Vietnam software development outsourcing company focused on delivering cost-effective solutions to its clients. Its customers are located in the US, the UK, Australia, Germany, and the Netherlands. Their services include custom application development, web application development, and mobile application development. It is listed among the top software development companies around the world. Additionally, Saigon Technology Team also provides .NET Core, Java, PHP, ReactJS, Angular, Azure, AWS, microservices, and machine learning. Some of its impressive clientele includes Kaercher, Abbott, Panasonic, Topicus, and DMI Inc.

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Learn More On: Software Project Estimation: The First Step To Success

Why Would Businesses Work with a Software Outsourcing Company in Vietnam?

Offshore software development services from Vietnam, like other offshore software development services, offer a variety of software development outsourcing solutions, such as custom software development, mobile app development, web application development, software testing services, and more. Working with a Vietnam software outsourcing company can provide several advantages. Consider some of the benefits of outsourcing software development to Vietnam:

Cost-Effective

The first and most important advantage of working with a Vietnam software outsourcing company is that it is inexpensive. When businesses outsource their work to Vietnam, they get it done at a much lower cost than they would have paid to do it in-house or in other outsourcing locations. This is because Vietnam’s cost of living and doing business is relatively low compared to other countries.

Expertise is Available

Another reason businesses should use software outsourcing services is that they gain access to a pool of experts with extensive domain knowledge and experience. Companies can be assured of receiving high-quality work within the time frame specified.

Enhanced Efficiency

Outsourcing also helps businesses increase their efficiency because they can now focus on their core competencies while the outsourcing company handles the non-core functions. Businesses can use their resources more efficiently in this way.

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Better Quality

When you hire a software development outsourcing company in Vietnam, you can be confident that you will receive high-quality work because these companies provide software development teams with solid expertise and a strong commitment to deadlines and results.

Flexibility

Another advantage of working with a Vietnamese outsourcing company is that it allows businesses to be more flexible. Businesses can complete the work on their timetable and scale up or down the project as needed.

Rapid turnaround time

Outsourcing firms are well-known for their quick turnaround times, and this is because they have a dedicated team of experts who work tirelessly on the project and ensure that it is completed within the specified time frame.

Increased Scalability

Businesses that outsource their work have the flexibility to scale up or down the project as needed. This is because the outsourcing company has the necessary infrastructure and human resources to meet the businesses’ increased or decreased demands.

Learn More On: Top 10 Reasons Why You Should Update Your Website Now

Access to Cutting-Edge Tools and Technologies

When businesses outsource their work, it is completed by experts who have access to the most up-to-date tools and technologies. Compared to what would have been done in-house, this helps improve the work’s quality.

Cost Savings on Overhead

Outsourcing also helps businesses reduce overhead costs because they do not need to invest in the infrastructure and staffing required to complete the work. Companies can save a significant amount of money, which can then be used for other purposes.

From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

Savvycom is right where you need. Contact us now for further consultation:

Collaborating with a software outsourcing company in Vietnam can offer significant benefits:

- Cost-effective: Businesses can get the work done for a lower price with a Vietnam company compared to if they have to pay for in-house teams or outsource from other countries. 

- Available expertise: Companies can gain access to a pool of experts with extensive knowledge and experience. 

- Enhanced efficiency: Outsourcing allows businesses to focus on their core functions and raise overall productivity. 

- High quality: The Vietnamese companies with expertise and great commitment promise you only top-quality products. 

- Flexibility: Businesses can complete the work on their timetable and scale up or down the project as needed.

- Quick turnaround time: A team of experts will ensure a product is completed within a limited time.

- Increased scalability: Depending on the demand, businesses that outsource have the flexibility to scale up or down the project.

- Access to cutting-edge tools and technologies: The outsourced work will be built with the most suitable and cutting-edge solutions.

- Cost-saving on overhead: Investments for infrastructure and staffing are no longer a business's concern thanks to outsourcing.

React, Java, MySQL, Spring Boot, Laravel, .NET Core, Django, and AWS are the most popular technologies in their respective tech stacks.

JavaScript is the most used language together with other IT skills. Particularly, React, Nodejs & Angular are the top 3 choices of Javascript frameworks. 

Nearly 90% of developers are located in the 2 biggest cities of Vietnam: Ho Chi Minh 55.3% & Ha Noi 34.1%. Only 5,9% of the developers are in Da Nang, and the rest is other cities. 

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How To Effectively Manage A Software Development Team

Having a happy, engaged product development team is critical to the growth and success of any software company. As a result, successfully managing software teams will directly impact business success. While there is no one way to successfully manage a team in software development – the team’s specific needs will vary depending on the stage of maturity of your business and industry – there are best practices to be inspired by, as well as common mistakes to avoid.

And if you like to know more about different models of Software Development Team, don’t worry because we have that topic already covered as well.

1. Make Inclusive Decisions About the Product Roadmap

How To Effectively Manage Software Development Team 1

Savvycom weekly brainstorming meeting

While you cannot afford to ignore business considerations, always seek the input of your technical department when brainstorming new product and feature ideas or setting time-to-market deadlines. Design discussions and whiteboarding must be integral parts of the decision-making process, and engineering teams must be involved.

Furthermore, the sales and marketing departments should collaborate closely with the engineering teams, sharing their knowledge of what customers want and where the market is headed. Everyone will be on the same page this way, and you will end up with a product that customers will love.

Don’t forget about your Product Managers. Remember that engineers and marketers can speak very different languages. As a result, you’ll need business and tech-savvy people to help bridge the gap between your development and sales teams – and that’s exactly what a great Product Manager is supposed to do. As a result, ensure that you have at least one highly skilled Product Manager driving the product roadmap in a way that benefits sales while also being realistic from an engineering standpoint.

Things to keep an eye out for:

  • The sales and marketing departments decide which new features to build and set strict — and frequently unreasonable — deadlines for the engineering team.
  • Non-functional requirements such as performance, scalability, or testing coverage are rarely considered in feature requests.
  • Developers are expected to churn out new features one after the other, with no time to discuss alternative solutions and approaches.
Learn More On: Dedicated Development Team 2022 – The Ultimate Guide

2. Clearly Define The Requirements

The first step in using a project management system to manage a team is clearly defining all work requirements. You may be able to outline expectations such as quotas and timelines in a central, easily accessible location using your project management software. This may assist employees in ensuring they meet all of the company’s expectations.

Have a Project Idea in Mind?

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3. Encourage Input and Discussions

It’s lovely when everyone on your team gets along and works well together; but the problem is that it’s almost… too enjoyable. As a manager, you may notice that you are sometimes surrounded by yes-men. This not only stifles healthy debate and constructive criticism but also closes the communication channel between you and your developers.

Keep an open door policy. Make it clear to everyone on the development team that you are always available in person or online to answer questions or discuss any concerns they may have. Don’t forget to actively seek their input when making critical technical decisions.

Things to keep an eye out for:

  • Middle management always seems to agree with you and does not raise concerns raised by technical teams.
  • Middle managers may take credit for good things while blaming the engineering team for mistakes and failures.

4. Assign Specific Tasks To Everyone

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One advantage of using a project management system is the ability to assign tasks to everyone via the software platform. However, management can also assign tasks directly. These tasks are frequently displayed on each platform user’s dashboard, making them easily accessible to employees. It is also beneficial to give different but related responsibilities to each team member to instill a sense of teamwork.

Learn More On: 08 Best Software Development Methodologies

5. Remove Any Blame Culture

A blame culture fosters a toxic environment where your engineers avoid taking creative risks and suggesting changes for fear of getting in trouble. Teams will accept less responsibility to keep the margin of error as small as possible. As a result, innovation will stall, and your company’s competitive advantage will dwindle.

Don’t point the finger at people – and encourage everyone else in the company to do the same. Aim to turn every mistake or perceived failure into a learning opportunity and an opportunity to gain a new perspective. Organize training on how to troubleshoot common problems, and encourage your engineers and other team members to share information on mistakes they made and how they fixed them.

Last but not least, have the company’s key performance indicators (KPIs) focus on outcomes rather than outputs. This would hold the entire vertical company accountable for unfavorable results. One method is to implement an OKR system, which is used by many tech companies, including Google, Facebook, Netflix, Eventbrite, and many others.

Things to keep an eye out for:

  • When errors occur, the priority is to identify the culprit and have them correct the problem.
  • Teams tend to cover up their mistakes, fail to address problems immediately, and forget to share troubleshooting knowledge with their colleagues.

6. Keep Track Of Individual Progress

Every team member is critical to achieving the group’s overall goals. Most project management software allows managers to track the progress of their employees. This can be useful for monitoring productivity and keeping everyone on track. It’s also a convenient way to organize projects and prioritize deadlines.

Never Miss a Deadline with Savvycom

Get in touch with Savvycom for a free consultation. We’ll help you decide on next steps, explain how the development process is organized, and provide you with a free project estimate.

7. Avoid Micromanagement

Take a deep breath and hand over control to your developers. You hired them for a specific reason. Your role as a manager is to enable, coach, and support your software development team rather than control it. Most of the time, successful software team management necessitates delegation. Delegating responsibilities will empower and motivate your engineers to take charge and prove themselves as much as possible.

Things to keep an eye out for:

  • Managers use detailed spreadsheets that track time and other resources far too closely.
  • Engineers are viewed as resources rather than creative thinkers.
  • Managers do not trust their engineering teams and require regular updates on what everyone is doing and how much time is spent on tasks.
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8. Maintain A Healthy Balance Of Senior And Junior Developer

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Hiring new employees is not a bad idea, and junior developers, on the other hand, require ongoing mentoring and coaching. So, if your team includes less experienced engineers, allocate enough resources to ensure a thorough onboarding process and ongoing follow-up training.

The challenge is to strike a delicate balance between mentoring new employees and micromanaging them to death (or not investing in their professional development at all).

Once the initial onboarding and training are complete, assign tasks that instruct engineers on what to do rather than how to do it. That is not the point of managing software teams. Encourage independent research and lifelong learning, and consider implementing a mentorship program that pairs young developers with experienced engineers.

Things to keep an eye out for:

  • Too many junior developers on the team don’t seem to evolve or learn.
  • Engineers are content with relatively simple tasks that leave no room for creativity.
  • Tasks are assigned with detailed how-to instructions that discourage developers from conducting independent research and thinking critically.
  • Junior engineers have few, if any, opportunities to seek advice and mentoring from more experienced colleagues.

9. Correctly Implement Agile Culture

Agile has taken over the world. It has transformed how software companies are structured, how they develop software, and how they adapt to changing markets and customer requirements through a fast-paced continuous improvement process.

Being agile requires a mindset shift that alters how you think about software development.

Take the time to properly implement agile processes best suited to your team’s needs. Meetings should be planned and led productively. Put more emphasis on past results and always outline precisely what actions must be taken next — and by whom.

Additionally, be open to revising old practices if specific meetings or standups become obsolete. The goal is to evolve agile rather than add processes to ensure agility. A vertical agile methodology, as well as a software-centric approach, are essential.

Things to keep an eye out for:

  • Collective agreements. Ascertain that the entire team is on the same page.
  • Collaboration. Offer to assist others.
  • Trust. Be honest and raise your concerns as soon as possible without micromanagement.
  • Any failure is an opportunity to learn and grow. The retrospective is most likely the most essential aspect of agile.
Learn More On: Software Project Estimation: The First Step To Success

10. Make Use Of Analytics To Your Advantage

Managers can use project management software analytics for various purposes, including monitoring project progress and generating quotes for future projects. Analytics can be used to incentivize employees to meet (or even exceed) their goals. Some project management software includes a feature that ranks top employees, which can improve morale, confidence, and productivity.

From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

Savvycom is right where you need. Contact us now for further consultation:

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DeFi Lending Platform Development Guide: Essentials, Building Process, and More

The interest in Blockchain is growing among experts of different business domains, especially Fintech ones. Such an interest results in more innovative software solutions appearing on the market. Moreover, prominent lending models like peer-to-peer (P2P) payments are enriched with new features.

We’ll talk more about P2P payments and DeFi systems as a way to transfer them. Furthermore, you will find out the advantages of DeFi lending and borrowing platform development, the creation stages you should pass through, and many other essentials.

Working Model of DeFi Lending

The lending process has been existing since the birth of money relationships. From those times, two traditional types of loans, such as collective and investment property one, turned into a peer-to-peer (P2P) lending model.

One of the P2P distinctive features is that it allows borrowers and lenders to collaborate through an online P2P platform instead of applying to banking establishments as traditional mediators in such relationships. As a result, both parties receive their benefits. Borrowers can quickly access the required funds without banking bureaucracy and investors have simple access to direct funding with better terms and a higher interest rate.

The Internet has significantly changed the scope and possibilities of P2P lending relationships: lending companies have got an opportunity to create online marketplaces that can serve as mediators during borrowers’ and lenders’ collaboration. The transaction is based on the borrowers’ credit histories as well as the underlying assets (if any) that support the loan.

Blockchain technology has put significant adjustments into the fintech sphere. Thus, the developers can use Blockchain to solve the problems concerning the existing banking systems, and DeFi lending platform development is one of the efficient solutions of such type.

The DeFi lending and borrowing platform development means creating a system equipped with a set of financial tools helpful for users to access funds without the necessity to collaborate with banks, exchanges, or brokerages. All the activities, such as lending/borrowing, cryptocurrency trading, interests earned in saving-like accounts, etc., will be performed with the help of the Blockchain-based smart contracts. One of the most distinctive features of DeFi is that it’s free from centralized management, which typically controls transactions made.

These systems function as follows:

  • Launching the process, the borrower puts up the crypto assets as a security.
  • The platform offers loans based on automated smart contracts use.
  • The borrowers have a distinct interest rate to pay, and the lenders receive that interest.

Working on the basis of the DeFi lending protocols, such platforms simplify the P2P cooperation between their users. Moreover, the DeFi platform benefits borrowers and lenders: the first ones can get a loan as usual, and lenders can earn money by giving crypto asset loans in collateral. DeFi also offers high interest rates for long-term investors.

Furthermore, the Decentralized Finance platforms are easy to use: everybody can become a borrower, having signed up and linked their digital wallets to start using a platform. That’s why its popularity grows, as well as its market, which reached $159.24 million, according to TheNewsCrypto. So, the DeFi lending/borrowing platform development is in demand now, and we’ll find out why.

Who Can Benefit From DeFi Lending and Borrowing Platform Development

DeFi borrowing platform development is a powerful tool to change the future of the fintech industry. The financial services are rendered in digital form — more secure, entirely open, transparent and accessible. Decentralized finance lending enables borrowers to obtain assets without the use of mediators. A lender can use a decentralized platform to stake their coins, and a borrower can take out a loan directly.

Let’s talk more about the most common benefits from DeFi use.

Cost-effective operations worldwide. Due to the absence of intermediaries, DeFi offers to users minimal or no operational costs for the services rendered, as well as the beneficial currency exchange. Such an advantage can be widespread around the world since the DeFi protocols and platforms are dispersed among the worldwide available blockchains.

Easiness of a service rendering. Blockchain allows every user to securely operate funds without a third-party institutions’ assistance. It is available thanks to the decentralization principle, which gives a simplified access to financial services for everybody, democratizing the fintech industry.

Network data transparency. The DeFi system data is opened for public monitoring; so, the information about the Blockchain network activity is accessible for everybody. DeFi solutions also use cryptographic algorithms to authenticate the validity of data before it is recorded. Such transparency can demonstrate that a company operates honestly, attracting additional investors.

Improved market efficiency. Operating with DeFi crypto assets makes lending and borrowing automatic. It can cut costs, speed up financial flows and increase the option number.

Complete funds control. Users have ultimate control over their earnings and how it is used. For instance, DEXs and DeFi trading platforms allow you to trade whenever you want and choose your own partners for trading. Centralized platforms, on the other hand, require you to deposit your assets before trading and trust the exchange to keep them safe.

DeFi system composability. The DeFi apps and protocols can exchange data without a signup required. Due to that, the DeFi solutions can be assembled like LEGO details. That’s why they are sometimes called Money LEGO.

Decentralized financial platforms help users gain total control over their funds and transparently manage them without any effort. Let’s find out what features such a useful system needs, and how to create one in a DeFi lending/borrowing platform development company.

Features That DeFi Platform Should Support

Planning the decentralized finance platform development, one of the first things you should do is to create a feature list for an upcoming platform. We’ll talk more about the basic features you should include to your perfect DeFi solution with the help of DeFi lending/borrowing platform development services.

Borrowing and lending are necessary to compensate for the collateral ratio, cryptocurrency assets as well as demand and supply ratio. Keep in mind that lending and borrowing operations are the very things customers would join your platform, so you have to duly care about their proper functioning.

Flash loans let customers pay back loans, take it out with no collateral to manage smart contract-automated transactions or execute arbitrage transactions.

Crypto wallets should be provided for proper depositing of customers’ assets. You need to have several ones or a branded crypto wallet possessing additional value for DeFi system users. Moreover, it should support a variety of tokens and stable coins.

Fiat on-ramp feature enables users to exchange fiat money for traditional crypto (usually called fiat currencies, while others are called non-fiat ones). Moreover it gives an opportunity for newbies to start their activity on platform regardless even with no cryptocurrency assets.

Governance should be provided to users for getting rights to vote on future system’s upgrades.

Customer dashboard should be reinforced with self-explanatory and seamless controls for convenient user administration.

You can also care about liquidity pools implementation and security features realization and ask a DeFi lending/borrowing platform development company to include them in the solution’s functionality. Advanced features that can be provided may include yield swaps, credit delegation, staking and so on.

How to Build a DeFi Lending Platform

Regarding the increase of the DeFi lending platforms’ popularity among the fintech institutions, there are a lot of entrepreneurs that want to develop such a platform for their business. We’ll tell you about the typical DeFi crypto lending platform development. The typical Cleveroad software creation lifecycle is given as an example for more clear understanding of the subject.

After a first contact, brief aim discussion and protecting your app idea by Non-Disclosure Agreement (NDA) signing, it’s a high time to pass through pre-sale activities.

Discovery Phase

The purpose of our discovery phase is to gather your requirements, like DeFi protocols and functionality to include, third-party services to integrate, and platforms to use — web preferred. You should also think about rates and fees for the future platform and what Blockchain to choose. If you doubt, the experts can consult you due to these questions and help you choose the required technology frameworks or prioritize functionality as to ROI expectations.

Moreover, our professionals research project requirements, complete required paperwork, mitigate any hazards, and arrange meetings to address business goals and user/tech requirements. They also review the list and advise which features to remove or keep to launch faster — but the final decision is yours.

At this stage, our team also prepares a rough estimation, the team composition for the project, and writes a specification. Our designers create visual concepts and design the main page (if it’s a web product) in different styles, colors, and wireframes. You revise them and pick the most appropriate version.

Design and Development

UI/UX designers work on a prototype before coders go to work. It’s built on the wireframes that were developed during the discovery phase of DeFi lending platform development services. The team starts with only a design concept and then builds the UI for a product screen by screen in different variations. We also generate a style guide with all of the information that designers and developers could want, such as colors, gradients, and font.

This is one little tip to consider: the future DeFi platform should be flexible enough to host more features that would be added later. Then, the UI/UX designers check the results of their work with dapp developers to ensure that everything prepared is technically ok.

After you’ve approved our work, the UI/UX designers hand over the project to the developers. They work, according to Scrum methodology as a part of the Agile development model, in sprints — 2-week intervals for completing an intended part of project work. Each of the sprints starts with planning a work scope and ends with a discussed project part delivery.

The developers should also care about DeFi protocols implementation predefined earlier on the discovery stage. It can be the following ones:

  • Aave is a well-known open-source lending protocol that has switched from the DeFi P2P lending concept. Customers can borrow money without a collateral lock for a limited period, alter rates, and take advantage of a variety of other benefits.
  • Dharma is a DeFi lending protocol enabling users to perform borrowing or lending DAI or USDC at different interest rates.
  • Compound is an open source DeFi protocol allowing users to earn interest and borrow assets against collateral on the Ethereum network. You don’t need to verify your identity using Compound; moreover, you can give or borrow money without a restriction.

Testing Phase

QA engineers examine the functionality generated during each sprint and work on a project until it is released. They test both the backend and the frontend and then provide reports for software engineers to use in bug fixing. After the completion of the sprints, they also conduct regression and stress testing to understand how the system would perform under high stress.

Release

The team is ready to deploy the product after regression testing and resolving all QA concerns. Developers must create hotfixes if serious issues are discovered.

On the day of the release, we move the web project to the live server or, if it is an app, we assist with its publishing on marketplaces. When you’re satisfied, the team gives you the project materials, such as:

  • Project requirements (the document link)
  • Design (Invision/Zeplin link)
  • Change request/project plan/risk register (link to the doc)
  • Source code, etc.

Support and Maintenance Phase

Our collaboration does not end after your DeFi platform is released. We may keep working on it to make numerous modifications based on user input and maintain your solution with new features and upgrades. It is gained with the help of error correction, code optimization, and other operations.

We described a typical DeFi project workflow; however, you should understand that you need to find a competent software development provider to make a DeFi platform development seamless and obtain a profitable end product.

Choosing a Vendor For DeFi Lending/Borrowing Platform Development Services

Collaboration with a skilled software development vendor knowing all the ins and outs of the Blockchain technology implementation into your software will be beneficial for your project development. Keep in mind that finding a partner for productive DeFi lending and borrowing development services will be easier if you stick to the points described below.

Select A Proper Cooperation Model

Looking for a software provider, the client should understand how to build the future relationships with the tech partner. IT cooperation models are the very things to establish communication between client and vendor.

We explain the most common cooperation models typically offered by Cleveroad.

Time & Material

The IT professionals can estimate the scope of a project and start working without being acquainted with the precise workloads. The project workflow as to Time & Material contract is the following:

  • The demo is prepared, tested and sent to customers along with checklists, sprint reports and other documents.
  • Customers look through the documents and give feedback.
  • The specialists analyze the obtained feedback and discuss it while planning the next sprint. Moreover, they prepare a list of changes needed by clients, document them and make time estimations each modification would take.

Change requests sent during the current sprint are addressed to the next one. A work bill is submitted only for the DeFi borrowing platform development we’ve completed.

The distinctive features of Time and Material cooperation model:

  • It’s especially cost-efficient for large projects with changing needs.
  • Each sprint is planned transparently, being discussed with the client in detail.
  • The T&M workload is flexible: you can easily manage the work scope of your team.

Fixed Price

A fixed-price contract means a one-time payment for well-defined scope of work and deadlines, along with comprehensive estimates and project requirements. However, to ensure suitable end outcomes, clients may communicate their clear vision of the product with developers.

What is beneficial in a Fixed Price Model?

  • Specific criteria and deadlines; workload is planned and calculated ahead of time.
  • Customers with restricted budgets, MVPs for startups, and small projects with limited scope will highly appreciate this model.

Dedicated Team

A dedicated team approach is a good option for complex and large projects. You may simply scale up your internal departments with more employees, or put up an agile team for a new project or software update. The vendor company in turn, will provide you with a substantial technical competence, a large pool of skilled personnel, and a non-disclosure agreement (NDA) signing per your request.

However, keep in mind that the provider assists only in organizational issues; and you have to control the DeFi borrowing platform development process and its administration.

Why pick a Dedicated Team Collaboration:

  • Get total control over dedicated team developers, workflows, and well-established communication protocols with complete transparency.
  • A specialized team may be scaled up and down as needed and incorporated into current development procedures.
  • It’s simple to distribute resources, and obtain essential technical competence at a low cost.

Decide What Region is the Best For Cooperation

App development cost is one of the most disturbing issues for entrepreneurs when they need software creation for their business. If the in-house team’s services are too expensive to pay for, the companies may pay attention to outsourcing cooperation. Country choice is essential to make this cooperation a long-term one.

Below we’ll list the main criteria you should consider selecting an outsourcing region.

Differences in culture and language with your future partner will be a serious obstacle if you won’t do serious homework. First off, especially considering offshore outsourcing, you need to make sure whether the personnel properly speaks English, writes, and understands it.

Moreover, the cultural issue should also be precisely investigated. The customs and traditions of each region are unique, so you should deeply research the habits and lifestyle to avoid any unpleasantries. Bear in mind that you should also care about understanding each other on a business level.

Hour zones should be highly appreciated while selecting an offshore destination. If your hour zone differs from your partner’s one for a few hours, it typically won’t be a problem. However, such a difference would be a problem if it isn’t overlapped: for instance, if you are from Estonia, and plan to work with a tech partner in China, the time difference is 6 hours. It means they end their working day while you’re just starting it.

A pool of tech talents is a significant benefit outsourcing gives to clients. Such benefit becomes available as some countries graduate top-quality IT specialists with perfect hard skills due to the exceptional education. However, you should remember that the perfect specialists you should look for must have a combination of hard and soft skills (e.g., flexibility).

Low pricing may draw your attention to certain geographic places, but this should not be the deciding element in your selection. Instead, consider service quality to be the most critical component in any outsourcing success formula, and make no concessions on it. Make sure you choose a nation that is recognized for its high quality standards and reputation for producing diligent specialists.

Finding a proper outsourcing destination while looking for a DeFi lending/borrowing platform development company is a question of a successful and productive cooperation that will fulfill your business needs. Don’t think you’ll gain your purpose having conducted a brief online research of the outsourcing region. Apart from the above defined points, your research should contain the country’s economic situation, IT infrastructure or legislation.

Evaluate Their Expertise

If your objective is to produce a robust and durable software that achieves desired results, you realize that your IT partner’s technical competence is critical. But such a check would be difficult if you’re a non-tech person. In this case you should find a technical pro (among your colleagues, as a variant) and ask them to check the following points:

Check client reviews

Almost every IT company website offers their customers’ feedback about completed work in collaboration. You can go deeper, looking through a company’s list of customers and directly contacting them. Moreover, you can visit such reputable platforms as Clutch, or ITFirms: they frequently publish ratings of the best IT companies along with reviews from clients. This way, you’ll get a more broad picture of the vendor you want to collaborate with.

Study their website

Look beyond the client feedback on the company website. Go to the portfolio section to carefully learn about the projects they worked with, complexity of the developed software and business domains it’s related to. Furthermore, don’t hesitate to look through their corporate blog to know more about their technological base.

Pay attention to their questions

An ideal partner will be involved and even brave enough to question your judgment and ideas – all in the project’s best interests. The chosen staff must be able to see issues before they get too serious, offer helpful advice, and suggest alternate options.

Ask them in turn

You can also interrogate them in the interview to know more about their activity (especially the DeFi lending/borrowing platform development). We’ve prepared a list of the common questions that can be offered to your potential tech partner:

  • How deep is your tech experience?
  • What is the size of your team? What kind of specialists do you have onboard?
  • Are you capable of delivering a product over the whole development cycle?
  • How likely are you to advise a friend or partner about your business?
  • How does information travel throughout your company? Do you leverage mentoring?

The IT outsourcing model offers all these points to your attention. You can find a reflection of all the described criteria in it, and develop a project profitably for your business.

DeFi Borrowing and Lending Platform Development Services From the Domain Experts

Borrowing and lending DeFi platform development is quite a complex and challenging task requiring a skilled vendor’s assistance. Cleveroad is the appropriate one, and we’ll tell you why right now.

This professional software development service provider, headquartered in Estonia, offers IT products for online payments simplification, financial analytics collection, as well as secure banking solutions and legal compliance. Being for 10+ years on the market, we have been providing our clients with mobile solutions for established businesses, and turnkey digital products.

Working with us, you will get:

  • DeFi lending and borrowing platform development services to create a top-class Fintech product perfectly fitting your business and meeting your company requirements and needs
  • Fast project development flow with no bureaucracy
  • Initial estimations for the project from our Sales Managers
  • In-depth consultations with our Business Analysts, Project Managers or other required professionals
  • A team of agile-oriented and certified specialists that will completely meet your project requirements and easily integrate into the current workflows
  • Accurate input requirements collection to correctly identify a workload from early stages
  • Qualitative support, maintenance and ads services after release for our customers, etc.

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How to Choose Offshore Software Development Company in 2022: The Complete Guide

The worldwide space is pierced with digital communication these days. For being noticed and heard, the companies should keep pace with technological progress, developing their own business solutions despite the pandemic measures and other obstacles. So, here rises the question: how to boost business digitization without limits?

The Internet allowed companies to work remotely, minimizing the distance between clients and vendors. On such a background, offshore software development services move to the forefront, helping the providers stay in touch with customers and continue the relationships.

For a deeper understanding of a situation, let’s apply to the stats. According to Avasant data, one of the most widespread outsourced functions is app building, and more than 60% of companies use it, fully or partly outsourcing their projects. Grand View Research also predicts the future of the worldwide outsourcing market positively, pointing at its growth with a compound annual growth rate (CAGR) of 8% during the period 2020-2028.

This article will enlighten more about offshore software development (as a part of the IT outsourcing business), how to choose an offshore outsourcing provider and cooperate with them, what to keep in mind while selecting a vendor, and other things necessary to know.

What is an Offshore Software Development Company, and How Does It Work?

To understand how to choose the offshore development company for the best cooperation, let’s start discussing the question from the very beginning and talk about IT outsourcing. It means transferring some services, like software development, UI/UX building, IT consulting, QA, etc., or a whole software development project from one company (client) to another (vendor). Such an approach lets the businesses quickly hire IT professionals with the required expertise for working during a project.

The clients typically hire third-party companies according to different factors (e.g., location, contract type, or relationship are average ones). Other factors can be classified due to the company requirements.

Outsourcing contains various forms, such as innovation outsourcing, business processes outsourcing, or system services one. There are also location-based outsourcing types (e.g., onshore, nearshore, and offshore outsourcing).

Onshore (onsite/domestic) outsourcing refers to delegating duties to offshore development companies based in the same city as the customer. This outsourcing approach provides faster results: the client company gains access to IT infrastructure, technologies, and expertise unavailable before. Moreover, having transferred some tech responsibilities to a reliable vendor, the customer can concentrate on other company activities requiring careful attention.

Nearshore outsourcing implies transmitting responsibilities or the entire project to the third-party provider located in the adjacent region. The client company representatives can visit the vendor due to its geographical closeness and fewer expenditures for traveling.

Offshore outsourcing is the practice of employing aт IT vendor located far away (e.g., a different country or continent). The client companies apply to it while they want to get top-quality IT services quickly at an affordable price.

The cooperation with an outsourcing provider is performed remotely but efficiently as if you collaborate with an in-house team without actually hiring it. The offshore outsourcing vendor can offer you the following types of IT cooperation:

  • Full-cycle software — the IT staff of offshore development firm takes responsibility for the whole software development lifecycle, from gathering requirements to maintenance and support activities.
  • Team augmentation — the client’s personnel is staffed by the vendor’s professionals for quickly gaining the set business aims.
  • Outstaffing — the vendor’s specialist(s) can be hired by a client to accomplish their tasks. The client fully controls their activity.

Though, you should keep in mind that outsourcing is a very flexible thing with different collaboration approaches. We listed only the most common ones.

Why Choose Offshore Software Development Companies?

Let’s take a detailed look at offshore IT outsourcing and discuss its benefits and development trends for 2022.

Offshore IT outsourcing is a type of software development outsourcing when the vendor’s organization renders IT services to a foreign client’s company. It’s an optimal alternative for entrepreneurs desiring to extend their businesses with little funds.

Who can be an offshore outsourcing vendor? It may typically be an IT company with more than one year of hands-on experience, offering services the particular client requires and having enough personnel to gain these purposes. This vendor can provide the customers with mobile development services, web development services, QA ones, UI/UX building, solution maintenance and support, etc.

Ordering custom software development services of an offshore IT provider, you save your time and resources and get top-class software, effectively solving your business problems. We’ll look at development trends the offshore teams use to achieve perfect results.

Artificial Intelligence. AI is widely used for testing flow enhancement. AI technologies like machine learning (ML) or natural language processing (NLP) will help IT teams create better offshore software development solutions for a shorter time.

Blockchain technology. Almost every company from different business industries (e.g., telecommunications, healthcare, finance, or media) wants to invest in blockchain technology to improve their business strategies. Blockchain has a number of advantages, including increased flexibility, faster digital transaction speeds, and a lower risk of data duplication.

Clouds. Each offshore software development company will enhance their work using cloud computing, as it lets the developed solutions be more flexible, scalable, and secure. Businesses will be able to keep the piles of data well-organized, safe and intact, for example, with the help of the private clouds. They can also use public clouds whether they need scalability for their IT product.

Enterprise workflow automation will be helpful for companies that require integrating innovations seamlessly, quickly adapting to fluid business needs, and becoming more competitive with less administrative expenditures. Moreover, automation technologies will reduce the percentage of human errors and let people save time and resources for other critical tasks.

Virtual employment takes the lead more while the business becomes globalized and therefore, remote. Employers more often engage remote personnel, as they can use the specialists’ unique expertise and skills without a need to offer more workplace resources (like office hardware, parking spot, telephone, etc.).

Offshore Outsourcing Advantages

It’s typically difficult for companies to decide whether to hire in-house staff for building software or apply to an IT vendor which will offer the best offshore software development services. However, the advantages of a second variant help to make a choice in its favor.

Cost-effectiveness

In-house team services can be related to high money spending, which is inconvenient for companies with a tiny budget. But outsourcing vendors open more prospects for such businesses. For example, applying to Central European IT providers, you’ll get top-quality software at reasonable prices. This destination is also famous for its low taxes, a bunch of tech talents, and IT sphere governmental support, which makes Central Europe the most attractive place for IT outsourcing.

Joint responsibility

The majority of non-IT businesses typically overlook risk-management necessities. But if they outsource the project, such responsibility is shared between the client and vendor. The offshore IT company will better minimize the software development risks as it’s one of their primary activities.

An accessible talent pool

Outsourcing offers you various hiring options to choose from a wide pool of experts with profound tech expertise in different business spheres. Furthermore, your hiring process will be reduced to several days rather than months.

A skilled software development provider will help you flawlessly accomplish projects of any degree of complexity and give you an in-depth consultation (if needed).

Rapid project accomplishment

As the time required for personnel recruitment is reduced, the project time to market is decreased, too. Moreover, by entrusting your solution development to certified professionals, you can modify even the workflow speed. Custom offshore software development services allow you to clarify all the project details and sit tight, as all the processes of a skilled vendor are well-established.

More technologies to select from

If you lack expertise for the project, you may hire a competent professional (team) with the help of the outsourcing vendor. The employed team will allow you to create a product, simple in use, modern, well-scalable and competitive.

Scalability

Outsourcing provides organizations with the most efficient solutions. For this purpose, you can scale up or down, increasing your team size to accelerate the development process or reducing the number of staff members if there are no assignments for them to complete.

This is not the entire list of advantages offshore IT outsourcing gives to companies. We singled out only the vital ones. Now, let’s have a closer look at the activity of offshore software development companies.

What Does An Offshore Software Development Company Offer?

Offshore IT teams offered by a vendor work remotely. If you fully outsource a software development project, they take responsibility for all the stages of the software development lifecycle (SDLC), from gathering requirements to post-release maintenance and support.

You can also outsource only software solution parts or separate modules to experienced offshore software development staff who will eagerly help you with the entrusted parts using their soft skills and technical knowledge.

Offshore software development vendors may typically assist you with the following offshore software outsourcing services:

  • Talent acquisition
  • Software development
  • Deployment and maintenance
  • IT consulting
  • Personnel training, etc.

Dealing with an offshore provider, you can select the cooperation model the most appropriate for you. For example, the customers working with Savvycom can choose the following:

A dedicated team model allows the customer to hire distant but qualified specialists supervised by your chosen IT services provider. The dedicated developers will be able to solve a lot of technical problems from the client’s side and the vendor’s one, being deeply engaged in the project. However, you should understand that there would be a part of decisions requiring your direct involvement during and after software development flow.

IT outstaffing is considered the perfect option for a staff expansion by many entrepreneurs. The provider helps you choose the software development specialists for temporary work with your team. Such professionals managed by the vendor act upon the agreement with a well-defined list of tasks and services to render.

Project-based outsourcing services are the best choice for businesses having decided to outsource their projects fully. If your flows do not require 24/7 surveillance, you can entrust them to an offshore company for software development. But keep in mind that your possibility to make changes or send queries is a little bit limited.

When Should You Apply to an Offshore Outsourcing Vendor?

Offshore software development might be helpful for companies in many cases. The most common of them are enlisted below.

  • Having a limited budget, you need to cut costs for a project. Partnership with an offshore IT vendor is less expensive, but benefits are the same as if you collaborate with an in-house staff (or even better).
  • Strict deadlines to accomplish the project disturb you? Offshore software programming is the very thing able to help you receive the final results more rapidly and duly meet the deadline.
  • Need in consultation and tech support is your case? The offshore experts will give you comprehensive answers to the most disturbing questions and help you solve the business problems.
  • Complex projects requiring rare expertise. Outsourcing partners get acquainted with different technical know-how, which allows them to bring even the complex and challenging IT concepts to life.

What to Keep in Mind When Choosing Offshore Software Company

Various offshore IT providers offer their services for companies, along with their unique views for the project’s further development. How not to confuse such a broad choice and select a trustworthy offshore software development services company for cooperation? What to check before signing a contract and agreeing to work together?

We’ve compiled a short advice list for you to consider.

Check the communication

Pay attention to communication evaluating it due to criteria of transparency and seamlessness. For that, you should check whether your future team will know English (or any other language) fluently for better understanding between each other. Care about tools for easy conversation; moreover, check their working hours, if they coincide with yours.

For example, here, at Savvycom, we use different communication tools to stay in touch with our customers (e.g., Jira, Slack, Facebook Messenger, Google Meet etc.) and choose the most comfortable time to do that negotiating beforehand.

Furthermore, all Savvycom experts know English high enough to talk to you without obstacles.

Pay attention to business feedback

Positive working experience is highly appreciated for building tight relationships with one of the best offshore software development companies. How to check it? First off, find your upcoming provider’s page on such hiring platforms as Clutch, Glassdoor, or ITFirms, and get acquainted with reviews left by previous firm’s clients.

Don’t limit checking by hiring platforms. Learn more about the company’s accomplished projects and business domains they work in from the portfolio. Carefully read the business information presented on their official site.

Care about solving security problems in advance

While contacting a company representative, ask them how they solve security issues. Determine if it’s possible to sign a Non-Disclosure Agreement (NDA) with them for your concept’s safety and secrecy. Ask them if they use encryption algorithms to protect the collected data, privacy policies, private information storage. Don’t forget to discuss whether the vendor’s solutions are compliant with international regulations (e.g., GDPR, CUI, CCPA, etc.).

Savvycom will always allow you to sign NDA per your request. Our experts will also care about your data security and offer you the best decisions on how to duly protect your future offshore software development solutions from cyberattacks, as well as other Internet dangers connected to security.

Check your hour zone difference

We talk again about this issue, as it’s too crucial while choosing an offshore partner able to contact you seamlessly. Nevertheless, you shouldn’t make decisions based only on this aspect. Many offshore companies undertake measures to synchronize with their customers for continuously staying in touch.

For instance, at Savvycom, teams always have meeting calendars with the most appropriate time for video calls with our customers agreed beforehand. It helps the professionals continuously be on the line with clients when they need it.

The Process of Cooperation With Offshore Outsourcing Vendor

For your better consideration, let’s find out what happens after you start collaboration — directly, a software development flow. We’ll talk about it in the example of Savvycom software development lifecycle (SDLC).

First Contact

After you’ve finished a choice of a vendor rendering the offshore application development services and turned to us, you can start cooperation by leaving a message request that shortly describes your project goals and requirements.

Delivery experts contact you within 24 hours and agree on a further meeting for a complete discussion as to your project. After analyzing the project needs and business goals, the rough estimate is generated, and then, you can sign an NDA to maintain secrecy (per desire) and go on to the next level.

Discovery Phase

The vital purpose of a discovery stage is to collect your requirements (e.g., platforms to cover, feature list, third-party services to integrate, etc.). You may also have consultations with different tech professionals who assist you in risk assessment functionality list creation/correction.

At Savvycom, we have an initial in-depth discussion about the project, which is essential for further project specification, team composition, and other organizational moments. At the same time, our designers start making wireframes — the basis for your future product design, which will have to be approved or changed by you.

Our offshore development company team also creates a detailed estimate of product building expenses by platforms. We will sign a contract if you agree with the figures and terms.

Product Design

UI/UX designers produce a prototype before coders work. It’s based on the wireframes drawn up throughout the Discovery phase. The design team starts with a design concept and then builds the user interface for a product screen by screen.

Our UI/UX designers prepare all screens and display possible user actions. In addition, a style guide containing your corporate colors, gradients, fonts, and other parameters, is also created at this stage.

After you’ve approved this work, the UI/UX designer hands over the project to the developers for rendering further custom offshore software development services.

Software Development and QA

At Savvycom, we use the Scrum framework as part of the Agile development approach. We build software in sprints, which are two-week intervals when a team must finish a specific amount of work.

The development team implements the needed functionalities. You may work with various tech professionals, such as iOS, Android, or web developers, depending on the project (front-end and back-end experts).

After that, QA engineers examine the functionality generated during each sprint and work on a project until release. They test the back-end and the front-end and then provide bug reports for software engineers to troubleshoot. QA also starts conducting regression testing after all the sprints are completed. Moreover, they conduct stress testing if necessary, examining how the program performs under tremendous pressure to identify its stumbling blocks.

Release stage

When the team is ready to deploy the product after regression testing and resolving all QA concerns, the QA team also checks the solution stability by smoke testing. Developers must create hotfixes if they discover any severe flaws.

We assist with launching your software on the AppStore or Google Play, or, if it’s a web solution, we move it to the live server. Once you’re satisfied with the results, the team will hand over the project materials (project plans, change requests, test plans, additional project files, etc.) to you.

Maintenance and support

Our collaboration does not end after solution deployment. We may keep improving it for the better UX or maintain your solution by adding new features and upgrades. It means performance and stability enhancements, code optimization, further bug fixes, etc.

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Outsourcing IT: Pros and Cons, Pitfalls, and All You Need to Know in 2022

The process of choosing software development vendors has utterly changed in recent years. Companies received an opportunity to bring to life the more complex IT solutions choosing specialists from a vast talent pool worldwide. Thus, software development outsourcing became a key trend for businesses.

In this article, we’ll cover IT outsourcing cons and pros, the pitfalls to avoid, and everything you need to know to use this collaboration model successfully.

What is IT Outsourcing in 2022?

Simply put, IT outsourcing is a business approach to creating software, consisting in transferring separate responsibilities, tasks, or even a whole development workflow to specialists from other software development companies (located abroad, as a rule). This practice is essential for quicker results, with fewer expenditures, using all the benefits of outsourcing software development to third-party vendors.

The Types of Outsourcing Software Development Services

Outsourcing can be divided into two general types: location-based and relationship-based. Their basics will be clarified below.

Location-based outsourcing is defined by the distance between the client and the service provider. In its turn, it has the following classification.

  • Onshore/domestic outsourcing means the customer applies to a partner company from the same country.
  • Nearshore outsourcing means transferring software building to a region near the customer’s one.
  • Offshore outsourcing implies moving a development workflow to a vendor far away from the client’s location. It should be mentioned that such a kind became very popular due to its significant profitability.

Relationship-based outsourcing is divided into types according to management and project realization peculiarities. You can use the below outsourcing models considering the advantages and disadvantages of outsourcing relevant to your situation:

  • Project-based approach means the team working on the solution development from the beginning and to the end.
  • The team-based approach entails the outsourcing staff being occupied by several simultaneous projects (for instance, web and mobile app).

IT Outsourcing Statistical Survey

The recent statistics prove that the choice between IT collaboration models is made in favor of outsourcing.

The Statista report proves the outstanding popularity of outsourcing IT services. According to its data, the global market share of software development outsourcing amounted to $92.5 billion.

Clutch statistics state that 8 of 10 small companies (80% approximately) had in mind to outsource their businesses at the beginning of 2021 due to different benefits of IT outsourcing. Among them, 27% of businesses plan to outsource software development services.

The NASDAQ stock market, the world-known stock exchange from the US, forecasts that more than 90% of purchases will be online by 2040, which will increase the income growth of various industries, and information technology is one of them.

Moreover, according to the Deloitte investigation 2019-2023, 71% of worldwide clients using outsourcing and shared services (also known as OSS) think technological inventions would overshadow the location issue arising during the decision-making process concerning software development outsourcing.

When to Turn to the IT Outsourcing

Companies rely on the advantages of outsourcing IT services to effectively gain their purposes and stay competitive, especially in today’s ever-changing technical environment.

This collaboration model will fit you the best if:

  • You are a startup/SMB owner with a limited budget. Moreover, your company lacks an appropriate recovery plan or funds to solve the data safety and security issues
  • You understood you’ve got a lack of competent personnel to solve the appearing issues
  • The company’s client support isn’t skilled enough to overcome the arising difficulties
  • New personnel recruitment and adaptation is too labor-intensive, requiring much money and time.

All these obstacles can be resolved if you apply to experts for help. What benefits of outsourcing IT cooperation will you obtain? Let’s consider.

Benefits of IT Outsourcing and Reasons for Its Popularity

Due to outsourcing’s popularity and relevance, its market size will grow in the future. For example, Techavio predicts that the global outsourcing market share will reach $97.51 billion by 2024. According to the report of Grand View Research, the total business processes outsourcing (BPO) market size was estimated at $232.32 billion in 2020, and this mark is predicted to grow with the registered compound annual market growth (CAGR) of 8.5% to 2028.

This growth is due to the most common pros of outsourcing that are the following:

  • Cost reduction
  • The vast pool of talented specialists
  • The broad set of technologies to choose
  • Scalability and flexibility

We’ll discuss them in detail below.

Costs Reduction

You can easily hire an in-house team for software development — at first sight, this option would be pretty cost-effective and comfortable. However, if you consider the additional charges (like sick leaves, office rent, etc.), outsourcing software development will seem a more appealing collaboration alternative to you.

Deloitte mentions that 70% of companies outsource their app development for cost reduction. Many outsourcing software development businesses are offering cost-effective services worldwide.

Vast Pool of Talented Specialists

Access to a wide pool of qualified tech experts is one of the biggest outsourcing pros. It allows you to choose a specialist even for complex projects.

The hiring process may be completed in a matter of days rather than months, so you can hire as many people as needed. Start with choosing one specialist by considering different technical talents from all around the world.

Let us give an example. Google, well-known for its numerous products and services for many people, is one of the largest American technological companies using outsourcing services. For instance, they had more than 1 000 outsourced specialists from different countries in 2011. Such outsourcing experts were occupied with projects like Virtual Assistant or AdWord, while Google’s in-house teams focused on their essential tasks.

Wide Set of Technologies to Choose

Advantages of IT outsourcing also include open access to hiring IT specialists skilled in various technologies, even the rare ones.

To keep up-to-date with the newest IT technologies, most organizations demand their personnel to attend frequent tech training. This permits them to maintain their sharp ability to provide greater customer service.

Considering Estonia’s outsourcing, we can see that the state cares about frequent training programs and IT-related education. This way, about 15,000 IT specialists graduate from Estonian universities annually, and this number is expected to grow to 20,000 by 2024, according to recent statistical predictions. Most students find their first job in IT organizations in 20 years and then gather more and more experience.

Business Scalability

Growing companies meet the challenge of finding goods and services that can scale with them. Managing an internal IT department becomes more expensive and time-consuming when your company grows. To meet your company’s expanding demands, you’ll need to hire more employees.

Outsourcing enables a variety of cooperation models, ranging from specialized teams to staff augmentation, in order to provide organizations with the most efficient and cost-effective solutions. So, you can scale up or down quickly adapting to the current business situation: reduce the number of specialists if you don’t have any jobs for them to work on, or expand your team if you need to speed up the development process.

IT Outsourcing Cons, Risks, and Ways to Avoid Them

Regarding outsourcing cooperation to fulfill your potential, you should also be aware of possible risks and methods to avoid or mitigate them. For you to consider, the most typical negative effects of outsourcing are described below, along with their possible solutions.

Selecting the Reliable Vendor

It can be tricky to find a service provider trustworthy enough and meeting your expectations. A bunch of outsourcing software development companies represent their services on the Internet and promise to build software as soon as possible. How not to be hooked on a one-day company or an unreliable partner with a horrible service quality?

This is one of the serious outsourcing negatives which can be solved with the help of a thorough investigation.

First off, check an outsourcing vendor’s website and pay attention to every detail you’ve noticed. The high positions in Search Engine Result Pages (SEPR) mean the company’s willingness to cooperate; the intuitive UI/UX and clear navigation may prove the focus on customer convenience.

You can also look through the company’s portfolio to learn more about the expertise and domains they worked in. Moreover, take into consideration the number of employees and years of experience: it’s better to trust the firm with at least one year of hands-on experience and enough employees to implement your IT concepts.

Furthermore, you can check the platforms like GoodFirms or Clutch to get acknowledged with the reviews of the vendor’s previous customers and draw your own conclusion. Follow your vendor’s page on social networking sites, monitoring how active they are in the IT community. And finally, set up a face-to-face meeting in order to get to know each other better.

At Savvycom, for example, we’re always ready for such communication, considering honesty with our customers, employees, and partners as a basis for excellent software building. A wide range of our services and attention even to small details help us gain more extraordinary results during cooperation with our clients.

Communication Issues

Outsourcing your software development to another company, you make it from a distance — especially the long one if you use offshore development services. That’s why contacts between you and the rest of the team can be limited (which is one of the severe drawbacks of outsourcing), giving you no way to get the current data at the appropriate time.

To avoid this problem, you can plan your meeting time beforehand. For example, Savvycom staff arrange a meeting calendar and stick to it for staying in touch with the customers and having video calls in time suitable for our clients.

Another widespread communication problem to solve is your future team’s level of English which may also cause communication barriers. If you are unsure about it, you can discuss this question with a company representative or check it during the video call or face-to-face contact. We can reassure you that all our specialists at Savvycom won’t have any obstacles in communication because they are highly proficient in English speaking and writing.

Security Problems

Working with an outsourcing vendor means presenting them with private and/or commercial data. Here is one of the core negatives of outsourcing, as the data breach can cost a fortune for companies. Let’s view how you can secure yourself.

Start with Non-Disclosure Agreement (NDA) signing — it may help you protect your potentially profitable idea and save your ownership rights untouched. At Savvycom, we always offer this option per the request of our customers.

You can also discuss whether their built solutions comply with personal data protection legislation (e.g., GDPR, CCPA, etc.); otherwise, you’ll have to pay a hefty fine. Finally, ask them if they use data encryption algorithms, user privacy policies, private information storage, and other methods to protect the entrusted IT concepts.

Product’s Quality Control

While the distance separates you from the outsourced team, it’s hard to control the quality of the developed product. To avoid such an issue, you should monitor the development process of the outsourcing team and establish frequent checks of the accomplished work scope.

You should keep in mind that outsourcing software development companies can help you build perfect software concerning your business needs, but you should also be interested in this process. Only this way you can obtain the best results in developing a profitable solution suitable for your company.

How to Get All From the Benefits of IT Outsourcing?

We’ve analyzed the most widespread outsourcing pros and cons; however, the above picture would be incomplete without understanding how to handle all this information and benefit from it. So, let’s go from theory to practice.

The Tips on Cooperation Enhancement

Before starting the outsourcing cooperation, you should think out every step of yours and its possible consequences:

  • What do you require for that?
  • How to use the pros and cons of IT outsourcing beneficially?
  • How to gain effective cooperation with your outsourcing partner?

Analyze the market situation and business needs

Even if your impressions concerning the project are overwhelming, try to control them as much as possible. At the very beginning, your task is to evaluate the viability of your idea, looking at it from your future clients’ point of view. This way, you’ll be able to correctly answer what are the advantages and disadvantages of outsourcing and benefit from them.

How to do such a check? First of all, you need to find out the working mechanisms of the market you’re planning to enter. Then, analyze your future competitors and leaders of the market, think about your target audience, and find their pain points that can later be turned into your product’s functionality.

Look thoroughly for an outsourcing partner and interview them

After understanding business needs and purposes, as well as the market situation, you need to find an outsourcer you’ll collaborate with. This issue needs a thoughtful approach. You can find outsourcing service providers on different hiring platforms, thoroughly analyzing the feedback left by previous customers, and getting acknowledged with their company sites or related resources (such as GlassdoorITFirms, etc.).

Then, make a list of companies you’re interested in the most, and start contacting them. You should plan in advance what you’ll ask them to clarify. It can be questions about:

  • Company workflow details (e.g., methodologies and instruments, QA techniques)
  • Communication organization (e.g., the most essential tools for staying in contact, the team’s English level)
  • Meeting schedule, management peculiarities, etc.

Sign an NDA to maintain your concept security

You’ve found a software development vendor you can trust and come to them with your thoroughly analyzed app concept, ready-made prototypes, or design alternatives. At this spot, you need to manage the number of people having access to your concept and protect it from unexpected shares monitoring the data flows. A Non-Disclosure Agreement (NDA) would help you in this case.

What is it? NDA is an authoritative document that sets up all the possible conditions of data exchange, describes how the entrusted data can be used, etc. Signing such a document would be great for a product of a startup or a small staff.

Plan your cooperation and aim for a continuous one

Once you’ve decided to cooperate with a particular software development vendor, you need to establish collaboration through communication channels (like Skype, Telegram, or Facebook Messenger) to stay in touch with your team and effectively track their flows. For example, the Savvycom team uses Jira, Confluence, Slack, Google Meet, or Zoom for these purposes.

You can also contact the project managers (as a rule, the outsourcers have such specialists) and ask them all you need to know, clarifying the pros and cons of outsourcing IT services you plan to use. However, remember: your cooperation isn’t finished after the product is built.

Tight connections with your software development provider guarantee quick improvements realization or bug fixing in case something goes wrong. Moreover, the team previously worked on your solution knows it from A to Z and can offer the best fitting solutions to the problems arising. That’s why we always recommend long-term cooperation to our partners.

What’s Next?

After all preparatory stages are finished and all the negatives of outsourcing are avoided, you can build your software with the outsourcing vendor’s assistance. What steps would the concept pass through, turning into a full-fledged solution? Let’s find it out on the example of the Savvycom software development lifecycle (SDLC).

1. First Contact

After weighing all pros and cons of outsourcing IT services, you can leave a request on our website to initiate the dialogue with the company. This request should contain a short summary of a solution you need along with your contact data. The managers will get in touch with you within 24 hours to make an appointment to gather more information about the project you’d like to outsource. Then the initial estimates are made up, and you can sign an NDA if needed.

2. Discovery stage

It’s represented as a series of meetings with specialists who delve deeper into your provided information making approximate timeframe and detailed price estimations of the upcoming app. Moreover, you may get advice from our Solution Architect concerning the functionality list (if it needs correction). The Business Analysts prepare the product specification, and the designers work on wireframes.

3. Product design

At this stage, the future app interface starts being built. Designers make prototypes based on the wireframes built earlier during the discovery stage. Then, they come over to the following outsourced IT services as interface development, making it screen-by-screen in several possible conditions. The style guide with your corporate colors and fonts is also being prepared. After the ready-made design gets your approval, the UI/UX designers hand it over to a development team.

4. Development and QA

The software is built in sprints, which are two-week intervals for the team to finish a particular work. Each sprint begins with a planning meeting and concludes with delivering a stable, functional product or feature.

After all the code lines are written, the QA testing process is started: engineers examine the functionality generated during each sprint and work on a project until release. They test the backend and the frontend and then provide bug reports for software engineers.

5. Release stage

When the product is ready to be deployed, the QA team conducts complex tests (e.g., smoke ones to check the product’s stability). Developers must create hotfixes if they discover any severe flaws.

Then, we assist with launching your software on AppStore or Google Play. If it is a web project, we move it to the live server on the day of release. Once you’re satisfied with the outcome, the team will hand over the project materials to you.

6. Maintenance and support

When the software is released, our collaboration does not terminate. We may keep working on the program to make numerous modifications based on user input and maintain your solution with new features and upgrades. This way, effective collaboration helps you use outsourcing advantages, and disadvantages won’t affect you.

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The Savvy Guide To Software Development Consultancy

Digitalization has already gained significant momentum in recent years as many companies now choose to follow the motto “Go digital or go home.” And as a result, the demand for IT services, more specifically IT consulting services have grown exponentially. Companies that lack in required skills, IT infastructure, talents, are all looking for help from software development consulting services more often due to convenience and cost-effectiveness of this model. Its popularity peaked in 2020 which was the beginning year of Covid-19 when the software consulting market size value reached $218.60 billion. This article will cover all you need to know about software development and consulting.

You’ll learn the main pros and cons of this approach, its benefits for business, and the steps you should take before hiring a company to deliver those much needed software consultancy services.

1. What is Software Development Consultancy?

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Before we dive deeper into this topic, let’s take a closer look at what software consulting or consultancy is. Software development consulting provides companies with expert IT knowledge to suggest a solution to their problems.

Software development consulting/consultancy services are mainly used by companies that need outside, external forces that specialize in the required field and could provide businesses with an unbiased opinion on a particular decision related to technologies. This opinion is often offered by software consultants that include PM, BA, and CTO.

Besides expert advice, a consulting company can often provide the necessary IT services like “Project-Based – End to End Development” or “Team-Based – IT Outsourcing, Dedicated Team or Staff Augmentation” to implement the recommended solution into the business.

Learn More On: The Essential Guide To Software Development Services

2. What Does Software Development Consultant Do?

The leading role of a software consultant is to recommend an optimal technical solution to help businesses solve their problems and achieve the targeted goals. However, the responsibilities of a software consultant aren’t limited or restricted to recommendations alone. At Savvycom, we also:

    1. Gathering Business Information And Requirements: As a consultant, it is essential for us to know everything about the business we assist. This includes business scope, industry, workflow, and other aspects.
    2. Recommending a Suitable Implementation: Based on the gathered data beforehand, we shortlist a number of solutions that will best suit the company in terms of available resources.
    3. Collaborating With Developers & Handling Development Process: If the solution we propose requires development from scratch, our software development consultant will team up with the development team to oversee the entire development process and transfer the proper requirement as well as the idea of the final product to the developers.
    4. Testing Solutions: The developed solution should first and foremost work as intended and must be smoothly integrated into the company’s business processes. The consultant also tests the final product with QA engineers to ensure we deliver a bug-free solution that will satisfy our clients.

Learn More On: Full Guide Of IT Outsourcing Models

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3. The Benefits of Software Development Consulting Services for Business

Now that you fully understand and know what software development consulting is, it’s time to list the benefits businesses get from hiring software development consultants.

3.1. In-Depth Technical Planning

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After discussing requirements and business goals with our consultants, they can develop a strategy with goal achievements and milestones in mind. We set priorities to create a clear technology implementation plan that doesn’t interrupt existing business operations and aim to introduce and deliver new technologies, and solutions to your hands as soon as possible.

3.2. Up-to-date Modern Technologies

Like “Dust in the wind,” technology doesn’t stand still. If your business doesn’t implement modern technologies in the workflows, competing with rivals will become much more challenging. Our software development consultants assist businesses in technology selection and implementation to help them save money and stand out among others in the long run.

Besides, suppose your staff isn’t tech-savvy. In that case, Savvycom’s software development consultants take on the responsibility of training personnel to work with a newly implemented solution.

3.3. Even More Time for Business Operations

Business owners often have many things to worry about and must focus on many business-related operations. An urgent and vital technology update may require a lot of time that can be spent on other aspects related to the core business. So another reason why companies hire software development consultants is to keep the focus on their business instead of having to worry about IT operations.

Looking For a Trusted Tech Partner?

We’ll help you decide on next steps, explain how the development process is organized, and provide you with a free project estimate.

4. Pros and Cons of Hiring Software Development Consultant

Like any other cooperation model similar to IT Outsourcing Services, software development consulting services have pros and cons that you should definitely know about before making a decision.

4.1. The Pros

Cost-Effectiveness

Achieving business goals while reducing costs is any company’s final goal. However, hiring or training a permanent consultant for a team can sometimes be very time-consuming and cost-ineffective.

Instead of looking for an individual employee for your in-house team, you can contact a company that provides such services. There’s a wide range of companies on the market with different rates and a pool of tech specialists that can consult you. And at Savvycom, you’ll always find the most suitable and cost-effective solution for your business.

Getting Expert Opinion

Companies that provide software development consulting services are always on cutting-edge technologies and ready to provide expert advice to other businesses. As a result, you’ll get the latest information about technological trends and an unbiased opinion about what technologies can help your company with a particular problem.

Lower Risks & High Rewards

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Turning to a professional software consulting company can help you significantly reduce risks and other unexpected turbulence connected with introducing new solutions into the core business. Experienced software development consultants know the ins and outs of this process, and they can foresee as well as plan a smooth update process to migrate all business data.

Specialized Industry Experts

By working with software consulting firms, you may collaborate with seasoned IT industry professionals who can develop a strategy for your company. Furthermore, all consulting firms focus on contemporary technologies. Give them your business aims and needs, and they’ll create a cutting-edge solution that complies with them.

Learn More On: Why Do Companies Outsource Software Development?

4.2. Cons of Consulting Services

You should consider some drawbacks of consulting services when deciding to turn to software development consulting.

Communication difficulties

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Being able to choose any company and work with professionals from any country worldwide sounds exciting. However, don’t forget that you may speak a different language and have a separate business culture. So communication difficulties can arise, leading to misunderstandings and missed deadlines. However, it’s not typically the case with experienced companies with a good market reputation.

Time zone difference

This is another reasonably common pitfall of working with foreign consulting companies. While a consultant on the other side of the world is already working and wants to discuss some aspects of the project with you, you can still be asleep. This problem can be partially solved by drawing up a meeting schedule that’ll be convenient for both parties.

Learn More On: Software Project Estimation: The First & Foremost Step To Success

5. The Processes of Software Development and Consulting

Software development consulting services are multistep processes. First of all, our consultants get acquainted with your – the client’s business requirements, then offer a solution to achieve business goals, a detailed execution plan to develop such solution, and provide post-release support. Each point of this cycle should be considered in more detail to clarify the overall service process.

5.1. The Discovery Phase

It’s almost impossible to come up with a tech strategy/solution and proceed to development without a thorough study of the client’s business. The Discovery phase helps consultants get acquainted with the company they’re going to work with:

  • During this phase, our consultants at Savvycom will hold meetings with the client to collect information about the business, gather much-needed requirements, and analyze its strength and pain points. All this data will help consultants determine the perfect solution that suits business goals and needs.
  • All information and requirements are packed into a specification containing all the project’s features and technologies and greatly simplifying communication between business and developers. Without customer approval of the specification, further stages can’t start.
  • The last stage of this phase is the choice of how a recommended solution will be implemented. A consultant can rely on their management skills and team up with the client’s development team to manage the development process from start to finish. Another option is to select a consulting company as the primary IT service provider to build the solution from scratch.

Whatever the choice, the client will face a pretty standard development cycle with the stages discussed below.

5.2. Product Design

After collecting all the required information, our designers begin sketching out the product’s appearance and making wireframes, which represent what you would see with your own eyes and the transitions on different screens.

After that, wireframes are approved by quality assurance engineers. They exclude logical issues to provide the business owner with polished wireframes. Once the client that means you agree, our designers will create full-fledged mockups, which are the final version of each screen. Upon completion of the design phase, all mockups are transferred to developers for future development.

5.3. Product Development

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This very important stage marks the beginning of active development. Developers implement features, testers check their performance, and this continues until all the agreed functionality is implemented. At Savvycom, our customer is always aware of the development process, thanks to scheduled meetings and reports provided by the development team.

5.4. Delivery Phase

After project development, the vendor transfers the final product to the customer, and the project goes into the release stage. Customers can ask for additional assistance in mastering and training staff to work with a new product if there’s a need. In that case, we will provide a team of consultants who conduct the onboarding process.

Another aspect of this stage is post-release support for the project aimed at making minor tweaks and edits based on the client’s feedback.

Have a Project Idea in Mind?

Get in touch with Savvycom’s experts for a free consultation. We’ll help you decide on next steps, explain how the development process is organized, and provide you with a free project estimate.

6. How to Hire a Software Development Consultant?

Before looking for a company that provides software development consulting services, you need to choose where to look for it. It’s crucial not to neglect this since the price of services, the convenience of communication, and management often depend on the vendor’s location.

You can choose between three types of companies: onshore, nearshore, and offshore.

6.1. Onshore

The distinguishing feature of onshore companies is that they’re located in the same country as you. The vendor may be found in another city, state, or region, but most importantly, it’s within your country’s borders. This is a convenient option since there are no language or cultural differences.

6.2. Nearshore companies

Companies of this category are located in your country’s neighborhood, and often the time interval between your and the vendor’s country is no more than 1-3 hours.

6.3. Offshore companies

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Offshore development companies aren’t only located in other countries and other regions, and there can be a considerable time difference. For example, your company is located in Washington, USA, and you hired offshore developers from Vietnam and Singapore to work on the project.

The significant advantage of this outsourcing type is the vast selection of companies from all over the world. As a result, finding a company that suits your project best is effortless.

Savvycom – Your Trusted Tech Partner

From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

Savvycom is right where you need. Contact us now for further consultation:

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  1. Gathering Business Information And Requirements: As a consultant, it is essential for us to know everything about the business we assist. This includes business scope, industry, workflow, and other aspects.
  2. Recommending a Suitable Implementation: Based on the gathered data beforehand, we shortlist a number of solutions that will best suit the company in terms of available resources.
  3. Collaborating With Developers & Handling Development Process: If the solution we propose requires development from scratch, our software development consultant will team up with the development team to oversee the entire development process and transfer the proper requirement as well as the idea of the final product to the developers.
  4. Testing Solutions: The developed solution should first and foremost work as intended and must be smoothly integrated into the company's business processes. The consultant also tests the final product with QA engineers to ensure we deliver a bug-free solution that will satisfy our clients.

Software consulting services have several strengths that you should be aware of:

  • Cost-effectiveness
  • You receive expert opinion
  • Lower risks
  • You work with industry experts

Software consulting services has few minor drawbacks due to opportunity to hire company from any part of the world:

  • Communication difficulties
  • Time zone difference

  • Onshore: The distinguishing feature of onshore companies is that they're located in the same country as you. The vendor may be found in another city, state, or region, but most importantly, it's within your country's borders. This is a convenient option since there are no language or cultural differences.
  • Nearshore companies: Companies of this category are located in your country's neighborhood, and often the time interval between your and the vendor's country is no more than 1-3 hours.
  • Offshore companies: The significant advantage of this outsourcing type is the vast selection of companies from all over the world. As a result, finding a company that suits your project best is effortless.

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