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Category: Offshore Development & IT Outsourcing

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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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Software Outsourcing Services: Your Guide To Success In 2022

Software outsourcing services involve working with a third-party team with specialist skills and expertise. Today, businesses worldwide work with software outsourcing companies to access expert software engineers boasting a range of tech skills.

Simply put, outsourcing software developers allows organizations to develop high-quality software products in a cost-efficient way. From innovative customization of pre-developed platforms to full-cycle custom solutions, software outsourcing companies like Savvycom are experienced development partners ready to deliver reliable and custom software solutions.

1. What is Software Outsourcing Services?

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“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. The concept, which The Economist says has “made its presence felt since the time of the Second World War”, often involves the contracting of a business process (e.g., payroll processing, claims processing), operational, and/or non-core functions, such as manufacturing, facility management, call center/call centre support).

The practice of handing over control of public services to private enterprises, even if on a short-term limited basis, may also be described as “outsourcing”.” – Wikipedia

In short, the practice of a firm giving control of a specific business process or project to a third-party vendor who is considered qualified and capable of completing the required business duties is referred to as software outsourcing.

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2. Type of Outsourcing Services

There are three main/common types of outsourcing services as below:

2.1. Offshore Software 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.

However, working with a team on the other side of the globe in a completely different time zone makes communication a lot more complicated. We all know that communication is vital for high-quality, cost and time-efficient software. Being a few hours apart simply complicates any type of communication.

Also, longer waiting times and miscommunication because of language barriers and cultural differences can quickly raise the costs again, including the stress you had to go through in the business process.

But ultimately, if the lowest hourly rate is your priority, offshore outsourcing is most likely your best option.

2.2. Nearshore Software Outsourcing

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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.

Communication becomes considerably more manageable, and as a result, onsite visits can be made more quickly and frequently. Furthermore, as compared to onshore outsourcing, nearshore outsourcing still provides cost reductions and high-quality software outcomes.

Nearshore delivery in Vietnam is an excellent way of meeting your team’s unique capacity, culture, competencies, skills, and quality criteria.

2.3. Onshore Software Outsourcing

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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.

Still, this option comes with a high price tag because when the price for software outsourcing in your country is already high, for example, USA, UK, etc. You wouldn’t want to choose onshore outsourcing in the first place.

Additionally, onshore companies often don’t have the right talent available right away simply because they can’t afford to maintain any unoccupied workers. So when you hire an onshore company, you need to consider the time the company requires to hire and train the talent you need.

LEARN MORE: Digital Transformation Services | Drive Businesses Forward With Technology

3. Most Effective Software Development Outsourcing Models

After deciding to outsource your software development, the following step is to figure out which model will best meet your needs. The way projects are approached and delivered is determined by outsourcing models.

The model that best suits your project will be determined by the project specifications and the goals you wish to achieve with your product. The three most effective software outsourcing models, on the other hand, are widely regarded as:

3.1. Staff Augmentation

IT Staff Augmentation is a service that allows you to add extra talent to your team as needed. This enables firms to quickly locate the perfect person for hard-to-fill or temporary positions, increasing project scalability and efficiency.

This method of software outsourcing is now used by enterprises worldwide to help them achieve their objectives faster and more cost-effectively. Any business or firm can avoid every speed bump when outsourcing, acquiring and retaining qualified software engineers thanks to IT staffing.

In short, IT Staff Augmentation provides you with the extra resources you need to complete your projects.

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Dedicated Teams

Outsourcing companies assign competent engineers to each client, allowing them to concentrate on only one project at a time.

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Saves Time

Working directly with in-house developers eliminates the need to advertise, interview, and onboard employees full-time.

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Maintain Oversight & Control

Because feedback is easier to acquire, augmented teams make it easy for the client to keep track of a project’s progress. Additionally the outsourced engineers also become part of the team, making it easy to keep track of work processes and reporting.

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More Flexibility In-House

Companies with an augmented IT staff strategy have more control over the work provided to developers. The client chooses who will perform which jobs and on which projects.


3.2. Dedicated Team

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When you employ a dedicated team, you’re hiring a self-managed group of software outsourcing team to handle your project. Because of that, a committed team requires a comprehensive structure capable of tackling the project according to your specifications and in response to your every comments.

To do so, these groups normally contain crucial people who will see the project through to completion. To give you an idea of a perfect outsourced team, we have listed all of the vital roles:

  1. Frontend Engineers: Responsible for developing the “visible” part of the project, these professionals are the ones that code and test user interface elements and functionality.
  2. Backend Engineers: These are the experts that take care of everything that happens backstage. In other words, they focus on developing the inner logic and the background components.
  3. QA Engineers: These professionals are in charge of the quality of the entire development lifecycle. They don’t just ensure that the product is as bug-free as possible but also that the processes used to build it have optimal quality and speed.
  4. UX/UI Designers: They are responsible for ensuring that the user experience is intuitive, simple, and engaging.
  5. DevOps Engineers: Professionals that work with the developers on the team to better coordinate development, operations, and testing efforts.
  6. Business Analysts: They serve as bridges between the IT team and the clients, assisting both sides in evaluating processes, determining requirements, and offering suggestions and reports to the person in charge of the project.
  7. Project Managers: The leaders of the development team, they initiate, plan, design, execute, and monitor the entire development process.
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Adds Value Immediately
The outsourcing teams are promptly established and managed independently by the outsourcing provider to ensure that the project is implemented and executed to a high quality. The client has access to a highly trained and seasoned team of professionals who do not require additional training.

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Streamlined Project & Team Management

Delivery teams increase capacity and reduce the burden on the client by taking responsibility for a project. According to Deloitte’s Global Outsourcing Survey, 47% of companies outsource to solve capacity issues.

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Remain In Control

While outsourcing vendors are responsible for the day-to-day running of a project, overall control and major decisions still remain with the client.

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Instant Access To Top Tech Talent

Companies benefit from having access to worldwide developer talent around the clock. Savvycom has always been on standby to provide immediate access to the best developers in Vietnam.


LEARN MORE: IT Outsourcing Costs: Is Outsourcing Really Cost Effective?

3.3. Project-Based Model

In software development, the project-based method is the most conventional and widely used when you want a one-stop-solution. A client fully delegates software development to an outsourcing company from planning to release.

The customer in this case selects how often they want to hear from the team’s Project Manager and agrees on the project needs, which are then set down in a detailed specification.

The PM that your IT provider assigns to you is in charge of the entire workflow. They are solely responsible for delivering the final product in accordance with the specifications and timetable you established.

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Clear Timelines & Outcomes

Before the work begins, you and your software outsourcing partner agree on schedules and deliverables. That gives you a clear picture of what you’ll get at the conclusion of the scope: screen-by-screen app design, features realized, and so on.

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Minimal Time Commitment

Some approvals are required, but the Project Manager is primarily responsible for ensuring that the work is completed on schedule and at a reasonable standard.
You could concentrate on other important tasks while working with the PM and have him keep you up-to-date at anytime.
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Responsibility Lies On Your Vendor
You’re in charge of documenting project requirements and specifications (Which means you’ll need to work with the vendor’s BA team).
Your vendor, on the other hand, is responsible for execution and delivery.

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4. Outsourcing Software Development Pros and Cons

Gathering an in-house development team makes sense when you have money or can attract the right specialists. For almost everything else, outsourcing works just fine and most of the time even better than in-house team. Especially if you’re on a tight budget or no company in your country fits your requirements. Still there are a few pros and cons of software development outsourcing that every business owners have to go through:

4.1. What are The Advantages of Outsourcing

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Control Over Costs & Predictable Billing

The single most important justification for outsourcing is, of course, cost savings. Cutting capital and operational costs will certainly help the company greatly.

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Attention To Core Competencies

There is no way one company can manage to cover all aspects of everything. Something is going to fall back, while another part will prosper. 

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Access To Relevant Set Of Skills & Experience

Making a mistake in the development of new technology can be very costly. An experienced outsourcing service provider can assist you in making the best technological decisions for your company.

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Flexibility
Making a mistake in the development of new technology can be very costly. An experienced outsourcing service provider can assist you in making the best technological decisions for your company.
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Quality & Reliability
Software Outsourcing Vendors are solely accountable for the quality and performance of the products they create. They draft a contract that specifies both parties’ deadlines, payments, and penalties, as well as intellectual property rights and other aspects of partner cooperation.
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Saving Time
Working with an outsourcing partner allows you to delegate much of the recruitment process, freeing up time and energy for tech leaders to focus on higher-value initiatives.

4.2. What are The Disadvantages of Outsourcing

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Communication Restrictions
It’s crucial to consider time zones and linguistic differences when looking for an outsourcing developer company. These two factors have the potential to be one of the most significant roadblocks on your path to project completion.

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Different Business Philosophy

As a client, you might feel like you’re losing control of the situation and don’t know where it’s going if you’re dealing with a radically different approach to management.

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Risk Of Data Theft
Overall, Outsourcing can sometimes be risky. Third-party vendors can “borrow” or use your ideas, innovations, and data in any way they want. NDA is probably what you should inquire when signing a contact.
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Company Morale
Some staff may view outsourcing as a threat to their role within the organization, which can lead to a decrease in productivity and reluctance to integrate an outsourced partner into the team.

5. Software Outsourcing Vietnam


Learn more from Visual Politik on Why Vietnam is the best place for outsourcing

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 Enginners and over 50.000 graduated IT Students from over 153 IT Institutions per year.

  • Vietnam ranks 29th in terms of Skillvalue Worldwide in 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.

LEARN MORE: Vietnam IT Outsourcing – Ideal Destination For Business Growth

6. Successful Software Outsourcing Case Studies

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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:

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Slack

Slack is one of the tools that owes 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.

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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.

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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.

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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 back-end, 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.


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7. How to Effectively Work with Software Outsourcing Companies?

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Finding A Suitable Methodology

The development model that you need will depend on the size of your project, its level of complexity, the timescale and your budget. The most popular ones are Waterfall, Scrum, DevOps, Kanban and Feature-Driven Development.
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Define A Project Specification

A detailed brief helps the client to better understand their project and it also allows for appropriate planning and implementation of the workflow process.
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Choose An Outsourcing Partner

The first step to choosing between the best software outsourcing companies is to understand what skills your current team is lacking. Additionally, remember to check their reputation and past work.

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Track Progress With Project Management Tools

Project management tools like Jira ensure that projects are executed efficiently. Everyone involved can benefit from documented workflows in calendars and messaging threads.
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Don’t Forget QA Testing

Working with software outsourcing companies to test your product from beginning to end is crucial. Both parties need to be responsible for QA testing in order to mitigate the risk of error.


8. Summary

Every software development project is now distinct. As a result, vendors provide a variety of models to meet the needs of various projects. If you have any doubts, consulting with your vendor is the best way to choose the right outsourcing model.

Describe your project, including its goals, requirements, deadlines, and budget constraints. Don’t forget to mention whether you have an in-house team and what level of flexibility you anticipate.

Looking To Find A Trusted Tech Partner?
Tech Consulting, End-to-End Product Development, Cloud & DevOps Service! Since 2009, Savvycom has been harnessing digital technologies for the benefit of businesses, mid and large enterprises, and startups 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:

  • Phone: +84 24 3202 9222
  • Hotline: +1 408 663 8600 (US); +612 8006 1349 (AUS); +84 32 675 2886 (VN)
  • Email: [email protected]

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What is Staff Augmentation? A Model to Extend Your Team

You can motivate your team to be more productive with salary raises, extra weekends, team buildings, and other activities. However, there are cases when even these instruments won’t work. For example, when you have a mature and functioning business and want to build a side project, your in-house team won’t handle such an extra workload. In such cases, IT staff augmentation can be the right choice for you.  

As a Business Development Manager, I consult many of my clients on which outsource model to choose. What I notice from my practice is that many co-founders do not understand which model suits best for their business situation, and fail to make the right choice. In this article, I want to talk about the option of staff augmentation and tell when it works best. 

What Is IT Staff Augmentation?

IT Staff augmentation is an outsourcing strategy of hiring skilled tech resources on external basis to cover necessary positions in your team temporarily or permanently.

It allows business to choose candidates only that fit your requirements and to cut or extend your augmented team whenever you need to. Plenty of companies offer staff augmentation. IT staff augmentation vendors help you add skilled technical resources to your in-house development team on either a short or long-term basis.

IT staff augmentation is part of staff augmentation in general. Staff augmentation is a type of outsourcing service from an external provider used on a contractual basis to complement the knowledge and skills of the existing in-house team. This strategy consists of determining existing staff capabilities and defining what skills are needed.

These resources are employed directly by the vendor, thus the cost and liability of making new full-time hires are eliminated. That being said, remote developers hired through a staff augmentation company are dedicated to one project at a time.

Staff Augmentation Is Right for You if:

  1. You already have engineers working on your product in the local office, but you want to extend your team to have a team of programmers develop another part of the product. You need to hire a team of 3-8 tech professionals, but it’s impossible due to the shortage on your local talent market. You realize that local recruitment will take too long and together with the risks and strong demand on the market this option is not viable.
  2. You are developing a tech product together with a team of programmers and you need to add new engineers to your team. As the stack of professionals that you intend to hire is rare in your country, you’re looking to extend your search to other locations.
  3. You cooperate with a project outsourcing company to develop your product, but this model doesn’t fit you for several reasons. First, you want to communicate with your team directly on a daily basis and second, you wish to be well-acquainted with your remote programmers to make sure they feel like part of your local team. Both of these are crucial for remote team integration with the local team and the motivation to follow a common goal with you and the in-house team. 

Staff Augmentation vs Other Models

Staff Augmentation

With the staff augmentation model, you have the opportunity to personally choose the candidates and manage them with the methods you prefer. Basically, the vendor takes over all organizational and administrative hassles, while you get the opportunity to deal with your core responsibilities and collaborate with your augmented team the same way you do with your in-house developers.

Managed Services

The project outsourcing company takes care of all aspects throughout the development of your project – from structuring a team with their developers available to managing all processes on their own side. You don’t need to have any in-house tech expertise or have to spend time on your remote development team. With project outsourcing, customers oftentimes don’t know who’s working on their project, what developers are currently doing, and which decisions are made throughout the process. 

Own R&D Center

If you’re looking to add at least 40 professionals to your team, you can establish your own R&D center in a country with a more favorable business environment and wider tech talent pool. Opening your own R&D center means you’ll have to delve into the legal system of the country, learn its cultural specifics, and run all of the risks on your own.

What Are the Benefits of Staff Augmentation?

High Productivity Level

Staff augmentation enables a higher level of productivity because the developers are focused on a single project 100% of their work time, in contrast to a project outsourcing team that can manage several projects simultaneously. Working for one client and following their big vision also means higher levels of motivation and dedication. 

IP Rights Security

From the very beginning of cooperation with your dedicated developers, all IP rights belong to you. 

Flexibility

You become more flexible on 2 sides mainly: 

  1. You gain access to a wide talent pool of IT professionals starting with UI/UX designers and front-end developers to Scrum masters and product owners. 
  2. It’s much easier to replace a developer – the talent pool is bigger and if you cooperate with a staff augmentation partner like Savvycom, you don’t have to spend additional money for the change over.

Cost Efficiency

Staff augmentation has an extremely transparent cost structure. You don’t have to worry about any administrative and organizational expenses such as office space, workstations, and other facilities. You only pay a fee, and the vendor takes care of arranging everything, while you have the opportunity to focus on your main business activities. 

Your Offer Stands Out

Software engineers are eager to influence the development process and have a voice in the decisions made throughout their work at a company. That’s why many Ukrainian developers want to cooperate with product companies, which is possible in 2 different ways – direct cooperation with a product company and working via the staff augmentation model. 

How to Succeed with Team Augmentation?

  1. Choose a vendor that will provide your remote developers with their separate team rooms that have all necessary facilities. 
  2. Make sure remote developers feel the effect of being with your local team. At the request of some of our clients, we install so-called “windows to the client” – there’s a camera in the team’s room and a screen that shows what’s going on in the local office. 
  3. Ask the vendor whether they have professionals who will help you collaborate with your team more efficiently.

How Does Staff Augmentation Work?

Staff augmentation is a fast and flexible process. It takes about 5 steps to outsource an augmented team: 

Gathering Project Requirements

Before forming a team, the outsource partner gathers the project requirements and learns which skills the client needs for their project. At Uptech, we communicate closely with the client during pre-sale calls and the development process. Close partnership with clients ensures that the result will be satisfactory. 

Selecting The Team

Once we know what we need, we can go on to find professionals for your augmented team. Depending on the project requirements, the outsourcing company will select professionals with the necessary experience, skills, and technical knowledge. This process can take 1 – 3 weeks. 

Augmented Team Onboarding

This is a critical stage when you onboard your team to start the work on the project. The onboarding period involves appointing the project managers setting up the communication channels and management tools. 

Conclusion

Staff augmentation is an excellent solution if you want to offload your in-house team or build a side project. Flexibility, the economy of costs, and close communication with the team are just a few advantages that team augmentation can offer. 

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Dedicated Development Team 2022 – The Ultimate Guide

According to Statista, the revenue of the IT outsourcing industry is expected to show an annual growth rate (CAGR 2022-2027) of 8.26%, resulting in a market volume of US$587.30bn by 2027. Nowadays, there are more and more businesses resort to a dedicated team model of engagement.

In this article, we will take a closer look at the definition of a dedicated development team, its pros and cons, and the main differences between the dedicated model and its counterparts – fixed price and time & material models. We will also help you discover the golden times to hire a dedicated development team and provide practical tips to choose the best ones.

1. What is Dedicated Team Model?

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A dedicated development team is a collaboration model in which a client and an outsourced team cooperate on a long-term basis. Working with a dedicated development team means working with a group of professionals who have been hand-picked to meet your corporate objectives. This team is technically your employees as all the members in an in-house team, except the fact that they work from another place.

However, with a dedicated team, you don’t have to worry about administrative, HR, tax, or social benefits issues. Instead, you can pay more attention to higher-level business issues while your development partners take care of the rest.

To summarize, a dedicated team model gives you the chance to collaborate with a team of experts that is chosen to focus on completing a specific project. Furthermore, they are responsible for all administrative costs.

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2. How Does Dedicated Development Team Model Work?

The best way to explain this model is to break it down into several steps:

  • The client specifies their requirements, determining the necessary technical skills required for the project, specific roles, and profiles needed.
  • The Dedicated Team Supplier begins the recruitment process in their country, selects and pre-screens candidates before presenting the shortlist to the client.
  • Final interviews are conducted by the client to verify technical skills and ensure that the candidates are a good fit for the team.
  • The client then works with the Service Provider’s HR team to onboard selected candidates.
  • The dedicated team and the client begin to collaborate, and the team begins to resemble any other in-house team. They do the same tasks, and attend daily meetings, etc

Learn More On: Top 15 Mobile App Development Trends In 2022

3. A Dedicated Project Team Structure

The composition of a dedicated team varies from each company and each project, depending on their specific requirements. As a result, your development team may include:

  • Front-end and back-end, full-stack engineers, mobile developers;
  • UX/UI designers;
  • DevOps engineers;
  • Quality assurance specialists;
  • Business analysts;
  • Product managers;
  • Project managers.

4. The Cost Of Hiring Dedicated Development Team

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According to Deloitte’s 2020 Global Outsourcing Survey, cutting costs is the top reason (70%) for a business to make an outsourcing decision. Hiring a dedicated team can help you save a lot of money, and here’s how.

In a dedicated team, the pricing model is straightforward. Since each member has a specific hourly rate, you pay for the number of hours they worked. There are no additional costs for renting an office, purchasing equipment, paying taxes or electricity bills, etc.

Furthermore, hiring a dedicated development team takes you less time and financial resources than searching for each professional individually with a HR team.

Looking For a Dedicated Team?

A Dedicated Team might be the best solution in your case. Get in touch with us and we’ll help you choose the best IT outsourcing model based on your business needs and requirements.

5. Differences Between Dedicated Development Team, Fixed Price, Time & Material

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It’s important to understand the differences between these three counterparts so that you can choose the most appropriate model of engagement depending on the type of your next projects. 

5.1. Dedicated Development Team Vs Fixed Price Model

The dedicated team model is frequently confused with the fixed-price format. These two forms, however, cater to very different business requirements.

The fixed-price collaboration model is a framework in which a client pays a set fee no matter the number of working hours. You can use this model in short-term projects with inflexible requirements and scope of work.

The main disadvantage of this framework is the possibility of overpaying. It’s not always possible to predict the time and scope of work ahead of time. In any case, even if the job is not done well, you’ll have to pay the agreed-upon amount under the fixed-price contract.

The fixed-price model will best suit with:

  • Projects with clear deadlines; 
  • Specifications that are well-defined;
  • MVP development; 
  • Short-term projects; 
  • When no changes are planned.

Unlike fixed-price models, the dedicated team model allows you to freely change your plan or requirements, as well as make space for as much development as you need without overpayment.

Learn More On: Top 15 Mobile App Development Trends In 2022

5.2. Dedicated Development Team Vs Time & Material Model

Another counterpart of the dedicated development team model is the Time & Material framework.

In the Time & Material model, a client is charged for the team’s actual time and effort spent while developing a specific feature.

As a result, this format is appropriate for:

  • Projects where requirements are not strictly fixed;
  • The market has not been entirely explored; 
  • Product-market fit is in the determining process.

The Time & Material model does not ensure that you will work with the same team to the end of the project. If there aren’t enough tasks on your project for some specialists, they can be assigned to another project.

Meanwhile, the benefit of a dedicated team model lies in the team’s commitment. You can rest assured that your project will be handled by a highly dedicated team that is not obligated to take on other projects. 

6. The Pros And Cons Of A Dedicated Development Team Model

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We’ll go over the benefits and drawbacks of a dedicated team structure, as well as show you key resons why you might need to collaborate with a dedicated team on your next project.

6.1. The Advantages of a Dedicated Development Team

There are many benefits to having a dedicated development team, and we’ll go over the most important ones below.

Cost Efficiency

Hiring a dedicated team for a project is usually cost-effective than hiring in-house specialists, especially if the team is located in a country with low development costs such as India, Vietnam, or China. etc. A team of experts who have accomplished successful projects similar to yours will complete the work required without jeopardizing the product’s quality, besides, helps you reduce HR costs and relevant costs if you hired new employees.

Focused Approach

A focused approach is one of the most significant advantages when you hire a dedicated team. Everyone working on the project will focus solely on it, ignoring any potential distractions. Moreover, the team is flexible. It can be reconfigured at any time to meet the project’s current requirements and needs, as long as the project is completed at a fastẻ rate and with better results.

Transparent Management

On-demand, clients can access time tracking and task management solutions used by the dedicated development team. This gives the client the chance to effectively keep track of the dedicated team’s progress. Some of the communication channels that boost the management’s transparency you can use are messengers like Slack and Telegram, or daily reports and meetings. 

Learn More On: Top 15 Mobile App Development Trends In 2022

Relevant Experience and Expertise

When you hire a dedicated team, you get hand-picked professionals with the necessary skills and experience for a specific project. In most cases, these members have already worked on projects that are similar to yours. Therefore, they can be good advisers who guide you through some difficult parts and pay attention to the tiniest details that you may have overlooked.

Working together for a while, they have standardized their workflows and honed delegating skills. You won’t have to start from scratch or deal with any potential conflicts, which will be extremely beneficial.

Flexibility in Project Requirements

When you don’t have a clear development plan and need to make changes to your project frequently, the dedicated model is an ideal option. In comparison to the fixed-price model that uses Waterfall as a standard operation approach, one of the big advantages of the dedicated team model is agility. 

6.2. The Disadvantages of a Dedicated Development Team

As with any engagement model, the dedicated team model is not an one-size-fits-all approach. The major drawbacks of this model are listed below. 

Different Time Zones

If an offshore company is involved, different time zones may become a serious issue. However, if the team follows the agile development principles, the problem can be easily solved.

Low Efficiency for a Short-Term Project

For large projects that constantly evolve, whose requirements are flexible and change frequently, dedicated team model would be a wise choice. In all other cases, it is preferable to select a different model.

Not a One-Size-Fits-All Solution

Before choosing a model, double-check that the model you’re considering is exactly what you need. Although your project may be long-term, signing a contract with a dedicated team may be not the best choice if you have clearly defined goals and a set of requirements that are strictly fixed.

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.

7. When Is The Right Time To Hire A Dedicated Team?

Dedicated Development Team 1

So now you know the pros and cons of a dedicated team model. Should you go with it or with other engagement models? It’s the time to find out the dedicated team model best fits your projects in which circumstances.

7.1. 03 Signs That You Should Use the Dedicated Team Model

The dedicated team model is ideal for long-term projects that have the potential to expand. This model will help a lot when your idea doesn’t have product-market fit and requires a discovery stage.

Startups in Their Early-Stage

With the fast growth goal of an early-stage startup, working with a dedicated team can be a wise decision. This method will allow you to quickly assemble a team, save money on hiring processes, and speed up product development. The dedicated team handles the extra work while the in-house team concentrates on business-oriented tasks.

Learn More On: Top 15 Mobile App Development Trends In 2022

Projects with Vague Requirements

A dedicated team is a good option when your idea doesn’t have product-market fit and requires a discovery stage. In the discovery stage, it may take months of testing and interviews to finally settle down. Therefore, the dedicated team model provides you with time and resources to fully focus on this stage without worrying about going over budget.

Long-term Projects 

The dedicated team model is best suited to long-term projects with the potential to expand. To discover all your project’s potential, you’ll need a team of experts with high commitment level, who will follow through the end of the project, to support you along the way. 

Throughout the world, there are many big companies using the dedicated team approach. WhatsApp, Apple, Oracle, American Express, IBM, Verizon, Amazon, Doist, Automatic, Buffer, and 10up are some of the names to be mentioned.

7.2. 02 Signs That You Should Not Use the Dedicated Team Model

The dedicated team model, despite its obvious benefits, is not a perfect solution for all types of projects. Here, we’ve compiled a list of situations where you should opt for another model rather than the dedicated model:

Short and Middle-Term Projects

For small projects with clearly defined requirements, you don’t need a dedicated team. A fixed price model is ideal in this case, while the Time & Material approach is appropriate for medium-term businesses.

Limited Time and Budget

When you have a strictly fixed budget for a project, a dedicated team model is not the best option. Sometimes, you don’t need a designer or a project manager to work full-time. In this case, a fixed-price model is more than adequate to achieve the desired outcome.

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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You can begin by identifying the type of project you are currently working on. A dedicated team model is the best option for a long-term and large project with a variety of tasks and a constant need for high-quality deliverables.

  • Inform the provider of the scope of your project and the resources you'll need (the number of specialists and technologies).
  • The contractor assembles a team of experts with the necessary skill sets and experience to meet your needs.

 

Vietnam owns a large pool of developer talents. 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. Moreover, the number of young developers who are always open to new changes and stay updated with tech news accounts for up to 54.76% aged 20 – 29.

  • Vietnam ranks 29th in terms of Skillvalue Worldwide in 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.

Besides, Vietnam has stable government policies and fast economic growth rate, as well as competitive pricing. The costs charged by the Vietnamese outsourcing companies are cheaper than other outsourcing markets in Asia like India, and China. While the hourly cost of Vietnam developers drops at $15-25, it takes more than $40 in Indian counterparts.

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How To Hire An App Developer For Your Business?

How to find an app developer? That is the question entrepreneurs face nowadays. Apps are dominating the digital industry, which means that tapping into this market is essential. Gone is the era of cumbersome software packages shipped in bulky CD-ROMS. In this age of screens and memes, every customer has a smartphone, which means that they can carry your business in their pockets. In this scenario the best thing you can do to boost your business is hiring an app developer. 

Let us speculate a little bit about how to find an app developer who will match your business needs.

So, Why Do You Need To Hire An App Developer?

It’s not necessary to hire an app developer. Some entrepreneurs with programming knowledge can create an app themselves, and this is made more comfortable with a vast array of free or paid development tools.

The problem is that most business owners either don’t have a computer background or they are unclear about what exactly they need to build the right app. Sometimes, the sheer magnitude of the project requires more than one person for the job, which means that even experts have to hire a team eventually. This is when the need to hire an app developer becomes clear.

There are three ways that you can go about when hiring an app developer:

Hiring In-House

The most common option is hiring an app developer as your team member. If there is already an existing team, the gaps in labor can be filled by conducting a job interview, picking the right person for the job, and integrating him into the workplace with his fellow co-workers. Though costly, hiring an app developer in-house is effective when it comes to small and medium businesses.

Hiring A Freelancer

Another option is hiring a freelance app developer. This method is gaining popularity today. With the onset of freelancing websites, any business owner can hire a specialist online. A major advantage of this option is the contractual nature of the agreement, which means that the owner doesn’t have to pay for vacation days, social security, and other benefits. Being cheap, however, is also a downfall, since many freelance app developers for hire out there are simply under-qualified for big jobs.Therefore, only entrepreneurs with pet projects that have a budget of less than $10,000 should go for this route.

Hiring An Outsource Team 

Hiring an outsource app developer pieces together the best of both worlds. The business owner hires app developers who are employed only on a contractual basis. It’s still less expensive than getting an in-house team, and because of the group setting, the product is usually better compared to hiring a single freelancer. Furthermore, hiring an outsourcing company is completely scalable, which means that you can expand or diminish the size of the team in order to fit the exact needs of the project, thereby saving resources in the long run. It’s the most efficient solution for entrepreneurs who have moved beyond the startup phase and are ready for their big breakthrough in the market.

So, Is Hiring An App Developer Team For Outsource The Best Option?

It depends. There are a few reasons why hiring an outsourcing team is the right way to go:

Pressed For Time 

App creation is a multifaceted approach that requires years of study. It’s simply not feasible to learn all of this by yourself, even if you happen to be talented in the field of programming. By hiring an app development team for outsource, you can leverage the expertise of other talents in the industry in order to create your mobile app and save yourself decades of effort in the process.

Budget Constraints

Unless you’re running a Fortune 500 business with deep pockets, you may not be able to afford having your own dedicated teams for app development. Apple reportedly has approximately 12,000 engineers working solely for them. Maintaining a private workforce like this is beyond the reach of 99% of entrepreneurs. Outsourcing an app development team is therefore the most practical solution.

Lack Of Available Talent 

Specialists are difficult to come by. Even if you have your own workforce, there may not be anyone in your team who has the necessary skill to create a particular feature that you want. This is when hiring an app developer can be very rewarding. Most outsourcing companies like Savvycom have a large talent pool for you to choose from, so contracting the job is often easier than having to train a member of your own company.

Launch Deadlines

The problem with hiring a solo freelance app developer as compared to an outsourcing agency is that freelancers often work on multiple projects at a time and can overestimate their capabilities. Missed deadlines is therefore a common occurrence. On the other hand, outsourcing companies have systems in place that prevent slacking off. The larger workforce also allows them to keep things on time and on schedule.

Lack Of Clarity 

Mobile app creation involves so many minutiae that it is simply beyond the capabilities of an entrepreneur to micromanage. Business owners should focus on the big picture rather than having to spend all their time nitpicking the details of an app. By simply hiring an app development team for outsource, your overall goal, you can then let them handle the implementation, freeing up your calendar for you to run the more important aspects of your business.

Overall, outsourcing your work to a remote team can be both cost-effective while still maintaining the necessary quality to make the app stand out for clients. While it may not be as cheap as hiring a solo freelance app developer, the work will progress much faster, and if you pick an agency that knows what it’s doing, then they will often come up with an elegant app that can rival the products of even the most dedicated in-house designers.

What Should I Consider When Hiring An App Developer?

Hiring an app developer can be tricky, if you do not know where to start.. Just because someone’s resume looks good on paper, doesn’t mean that he’s the right person for the job.

Ask A Friend Or Colleague For References

Experience is the best teacher, so asking friends and colleagues for any referrals is the best way to find an excellent app developer quickly. With this method, you can save a significant amount of time from having to go through hundreds if not thousands of substandard worker profiles.

Research The Hiring Platform 

Quickly research through online platforms that allow you to hire app developers:

– Freelance platform Upwork. 

– Design communities Dribbble and Behance. 

No matter what you choose, consider the hiring platform carefully. Be especially wary of scam websites, and never put in a large down payment unless there’s an escrow or refund process involved.  

Step By Step Process Of Finding App Developer

Examine The Apps Developer’s Portfolio

Don’t take chances with app developers who are still fresh from college. Of course, there are some rare instances wherein newbies might prove to be extremely skilled, but they are not the norm. Before actually hiring an app developer, take a look at the past work experience and portfolio to see how well they performed on other projects. You can get a lot from simply browsing through their previous job cases. You can get a lot from simply browsing through their website or Clutch profile.

Check Testimonials

The experience of previous clients is an invaluable factor when hiring an app developer provided that their testimonials are legitimate. It’s very easy to get fake reviews, so while testimonials may be important, they should be considered along with other factors in this list.

Discover Their Development Approach 

Finding an app developer to fit your project, requires the coincidence of your development approaches. The software development life cycle is the way in which app developers divide and organize the work so that the process goes smoothly. Different teams have different methods and approaches.

Discover Technologies What They Use

Like with doctors, you ought to see if the app developer you want to hire is specialized for your project. Is your app web-based or not? What programming language do you need? Do you want a fancy graphical user interface or a basic one? The answers to these questions will narrow down the search of applicants. Remember: you don’t just want to hire a good app developer, but one that knows the particular technologies for your project.

Look Into The Culture Of The Company 

This factor is critical while hiring an app developer, though many co-founders tend to skip it. Different app developers have different working atmospheres. For example, some companies function in a traditional managerial style that uses a top-down approach, with bosses at the top giving orders to their employees at the bottom. Others function on a team-based level where everyone is encouraged to speak up and contribute regardless of their rank. There are also a few that give large amounts of creative leeway to their workers with hardly any supervision. Therefore, even if a particular company has superb talent, their culture might not be a right fit for you. In order to find a good match, you have to figure out your values, ethics, expectations, goals, and personality, then make sure that the developers that you are hiring are on board with them.

Talk With The Team

Even when hiring an app development team remotely, you still have to interview team members. Testimonials and portfolio cases won’t be worth anything if the app developer is hard to deal with on a personal level. Be aware of potential difficulties or character flaws, as this might cause unexpected arguments down the road.

Keep Communications Open 

The problem with hiring freelance or employee app developers is that they work remotely, which means that email and teleconferencing are often the only means of contacting them. This difficulty is further compounded if they live in different time zones. Before hiring an app developer, make sure that communication is not hampered by these logistics. It’s always best to get someone from your side of the world and agree on specific times when they are available for an update. Lastly, always make sure that communication is transparent! Agencies should be upfront with their capabilities and limitations, as well as their payment terms. Never work with anyone who seems to be hiding something.

Summary

Mobile apps form a crucial support for the backbone of your business. The good news is that you don’t have to reinvent the wheel—by hiring an app developer, you can simply tell them what you need and wait until they come up with the finished product. 

Since you’ll be working on a budget, getting it right the first time is necessary, and by using the guidelines above, you should be on your way towards finding an app developer who will take your business up the notch.

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08 Best Software Development Methodologies

Various software development methodologies have been introduced throughout the decades. And they all aim is to provide continuous delivery by shortening the systems development cycle while ensuring high software quality with faster time to market, security, code quality, and improved communication and collaboration among developers. However, there isn’t a one-size-fits-all methodology for every development team.

In this article, we will guide you through the 08 most beloved Software Development Methodologies that might work best for your business.

1. What is Software Development Methodology?

“In software engineering, a software development process is a process of dividing software development work into smaller, parallel, or sequential steps or sub-processes to improve design, product management. It is also known as a software development life cycle (SDLC).

The methodology may include the pre-definition of specific deliverables and artifacts that are created and completed by a project team to develop or maintain an application. Most modern development processes can be vaguely described as agile. Other methodologies include waterfall, prototyping, iterative and incremental development, spiral development, rapid application development, and extreme programming.” – Wikipedia

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

When working on a project, software development methodology refers to the systematic processes that must be followed. It’s an amalgamation of design ideals and pragmatic realities that dates back to the dawn of computing. The purpose is to establish a method for software development that is systematic.

Various software development approaches have been established to utilize available technology and resources. Software development methodologies give a framework for developers to collaborate more effectively as a group. It defines how information is shared within the team and formalizes communication.

Many IT businesses now agree that using a software development process is critical for their team’s success. However, the question of which strategy is the most effective remains unanswered. This is due to the fact that there isn’t one. Each methodology has its own advantages and disadvantages.

Getting the most out of one depends on the team’s structure, needs, and objectives. Various software development approaches can also be used for different projects.

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2. The Importance of Software Development Methodology?

It should be emphasized that picking a software development approach and sticking to it throughout the project is critical. When you take the software development process for granted, you might run into several sequential risks that we have listed down below:

  1. Developers’ performance can be badly affected by customers’ ever-changing requests if they don’t have organized advice, especially when there are miscommunications. As a result, the software is frequently revised without regard for the project’s broader ramifications.
  2. So, what’s the end result? Well, it could be many, including a waste of time, money, and effort with the risk of generating a mediocre product that doesn’t add value.
  3. Both the development team and the client profit from software development approaches. Choosing the right one guarantees that talks take place in the proper channels and that decisions are taken after all issues have been considered and dealt with.
  4. The development team can improve efficiency and provide a more realistic delivery date by using a software development approach. It allows both parties to be more organized and systematic while dealing with spontaneous changes rather than responding to every input.

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.

3. 08 Best Software Development Methodologies

The numerous software development methodologies are available to provide developers with a plethora of options. Most techniques fall into one of three categories: Waterfall, Iterative, or Continuous.

  1. Waterfall:
    When it comes to implementation, a Waterfall technique follows a set of steps. The stages of development are established in a strict, chronological order. Due to the certainty of the project scope, Waterfall was very popular in the early days of programming. The rigidity of its structure, on the other hand, leads to the high failure rate of many initiatives.
  2. Iterative:
    The iterative model is a software development methodology that is less focused on rigid documentation and more open to continual modifications. Multiple sprints are used to swiftly develop and test concepts to guarantee that they are relevant to users. As a result, problems are identified early on, and the team sticks to the project’s objectives. Two of the most prominent iterative software development approaches are Agile and Scrum.
  3. Continuos:
    The Toyota Production System inspired the continuous model. It’s all about reducing disruption and enabling smooth transitions between stages of growth. The purpose of the ongoing software development strategy is to minimize waste and increase efficiency across all phases.

Learn More On: Why Do Companies Outsource Software Development?

3.1. Agile Development Methodology

Software Development Methodology 1

In recent years, the agile methodology has become one of the most popular software development methodologies. It differs from the traditional linear method because it takes a different approach. Instead of emphasizing paperwork and strict procedures, Agile focuses on how to satisfy consumers.

Tasks are broken down into tiny sprints that take 1 to 4 weeks to complete in Agile. It’s an iterative model in which many tests are run as the project proceeds. Customers’ feedback is constantly sought by developers, who then make modifications to the software.

In Agile, communication is a top concern, especially amongst engineers, clients, and users.

Agile Adoption Statistics 2022

  • 71% of companies are adopting Agile.
  • Agile adoption has helped 98% of companies.
  • The US government has lost $32 billion as a result of failed IT projects.
  • 60% of companies experience growth in profits after adopting an Agile approach.
  • 80% of federal IT projects adopt Agile.
  • The Agile failure rate is 8%.
  • The average salary of an Agile project manager is $90K.
  • Microsoft Project is the most sought after project management software.

– Statistics taken from GoRemotely

Pros:

  • The software has minimal defects due to the iterative effort in testing and fine-tuning. 
  • Clarity between team members during development, thanks to systematic and transparent development.
  • Changes in project requirements are quickly addressed and worked on with little impact on the timeline.
  • An overall improvement in the deliverable’s quality.

Cons:

  • The development team can sometimes lose focus due to overwhelming requests for changes.
  • Documentation takes a back seat in Agile, which can be a problem later on in development. 
  • Agile focuses on discussions and feedback, which can be time-consuming for the team without an experienced PM and BA.
  • Due to its non-structured approach, Agile requires experienced developers who can work independently. 

Suitable For:

For projects with rapidly changing needs, the Agile technique is perfect. If you’re developing software for a new market, Agile is the way to go. Adopting the additional ideas is ideal when you gain a better understanding of the market’s needs. Of course, this requires that your development staff is self-sufficient and accustomed to working in a fast-paced, unstructured atmosphere.

Savvycom – Agile Development Company

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

3.2. Waterfall Development Methodology

The waterfall methodology is still applicable in some projects, despite being utilized for decades. It’s a straightforward, linear strategy in which development stages are organized into a series of sequential, cascading steps.

Because the waterfall development process is simple to grasp, it is common among teams with little design knowledge. Before moving on to the next stage, each one must be accomplished. Before design can begin, for example, all requirements must be determined.

There is no going back in this method, just as there is no going back in a waterfall. As a result, the waterfall method is inflexible and should be avoided for projects with quickly changing needs. According to a study performed by Ambysoft in 2013, the waterfall methodology has a success rate of 49% while the agile method has a success rate of 69%.

Pros:

  • The linearity of the waterfall model makes it easy to understand, particularly for new developers.
  • All specifications and deliverables are spelled out before the development commences.
  • There’s no room for miscommunicating information with the waterfall model as it’s clearly defined in each stage.

Cons:

  • It doesn’t include customer feedback in the early phases, which increases the risk of the project veering off target.
  • Testing is only executed at the end of the development. Some problems are harder to fix at a later stage.
  • The rigidity of the waterfall model gives no room for changes, making it unsuitable for complex projects. 
  • The team can spend too much time on documentation instead of delivering solutions to the user’s problems.

Suitable For:

Only use waterfall if your project has a well-defined scope. It is unsuitable for development with a large number of unknowns. Waterfall is the way to go when you have a team of inexperienced developers and a project with predictable outcomes.

Learn More On: The Essential Guide To Software Development Services

3.3. Lean Development

Toyota’s lean manufacturing concepts inspired lean development, and it concentrates on reducing waste and improving output. Developers can avoid non-productive activities while still delivering high-quality work by following the guiding principles.

Continuous learning and decision deferral are also emphasized in the Toyota-inspired methodology. It allows teams to have an open mind during the development process and examine all considerations before making a final decision.

Developers are responsible for identifying bottlenecks that could stymie the process using the lean methodology. The goal is to create a system that is both efficient and reliable. Human respect is also emphasized in the process, which means communication is essential for improving team collaboration.

Pros:

  • Cuts down unnecessary parts in the project, such as redundant codes, unnecessary documentation, and repetitive tasks. 
  • The overall cost of development is reduced with lean principles.
  • Time-to-market for the software is shortened as lean development promotes efficiency. 
  • Increased motivation amongst team members as they are empowered with more decision-making authority.

Cons:

  • For lean development to be successful, you’ll need a team of highly-skilled developers, which isn’t easy to put together.
  • Less-skilled developers can be overwhelmed by the responsibilities and loss focus on the project.
  • Detailed documentation is needed, which places an enormous burden on the business analyst.

Suitable For:

Lean development is appropriate for working on a small project with a limited budget. Its ideas of reducing waste and boosting efficiency imply you’ll be able to get great results with a little workforce. Larger projects make lean development less realistic because they require a more extensive staff to complete the tasks.

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

3.4. Prototype Model

Software Development Methodology 2

The prototype model allows developers to work on a prototype version of the eventual product rather than producing a full-fledged software. Customers can then test, evaluate, and provide comments on the prototype.

The prototype goes through multiple stages of development based on the customer’s feedback until it’s judged satisfactory. The advantage of the prototype technique is that it allows for a thorough examination that exposes potential problems before actual development begins.

The effectiveness of this technique depends not just on the development team but also on how well they communicate with clients during the test. It’s also worth noting that the prototype is frequently built at no expense to the developers.

Pros:

  • Good in ironing out potential issues in the early development stage significantly reduces product failure risk.
  • Ensures the customer is happy with the ‘product’ before the development starts.
  • Build rapport with the customer early on with the discussions, which helps throughout the project.
  • Gather detailed information with the prototype, which is later used in building the final version.

Cons:

  • Excessive to and fro testing the prototype with the customer can delay the development timeline.
  • The customer’s expectations of the product may not align with the prototype.
  • There’s a risk of cost overrun as the works on the prototype are often paid for by the developer.

Suitable For:

When you’re designing software with a lot of unknowns, the prototype model is ideal. Consider an online platform with a high level of user interaction. You may find out what works best with people and lessen the risk of building the actual product using the prototype approach.

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.

3.5. Rapid Application Development

In 1991, the Rapid Application Development (RAD) methodology was created, and it became the basis for modern iterative frameworks. It focuses on producing items in a considerably shorter amount of time without sacrificing quality.

The RAD framework is a four-step process that includes project requirements, prototyping, testing, and implementation. Instead of linear models, RAD focuses on creating prototypes based on the supplied needs and testing them with the customer. This is done through several iterations until the customer is satisfied with the outcome.

Extensive prototype testing yields valuable input, which helps to minimize much of the product risk. When RAD is used, there is a reasonable likelihood that the product will be released on time. RAD frequently uses development tools that automate and streamline the process.

Pros:

  • Risks reduction through regular customer feedback.
  • Increased satisfaction for customers. 
  • Works well for small and medium applications.
  • Reduces time-to-market.

Cons:

  • Highly dependent on a responsive customer.
  • Requires a team of highly-skilled and experienced developers. 
  • Not suitable for projects with budget constraints.
  • Lack of documentation for progress tracking.

Suitable For:

Rapid Application Development will yield the finest results if you have a team of professional developers and customers equally invested in the project. The RAD technique relies heavily on communication to complete tasks. You’ll need to invest in RAD tools like low-code/no-code applications to speed up development.

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

3.6. Dynamic Systems Model

Much of the Dynamic System Model’s principles come from the Rapid Application Development framework. This improved methodology aims for on-time delivery and project goals aligned with company needs. The four iterative processes are feasible and business study, functional model, design and build, and implementation.

End users are heavily involved in providing input throughout the process. This lowers the chances of deviating from the project’s objectives and needs. Most Agile frameworks lack thorough documentation, which the Dynamic Systems Model provides.

Pros:

  • The iterative approach ensures that basic software functionalities are delivered promptly.
  • Developers have better control of the development timeline and budget.
  • Necessary documentation is created throughout the development.
  • Establish communication between end-users and developers, which keeps the team on the right track.

Cons:

  • It can be pretty expensive to execute. Heavy user and developers’ involvement is needed, and it takes a considerable budget to train them.
  • Smaller teams will have a hard time implementing this methodology. 
  • The concept and implementation of the model are pretty complex.

Suitable For:

It’s impossible to use the Dynamic Systems Model in small businesses. Instead, it’s better suited to large companies with a lot of red tape, bottlenecks, and redundant processes. It simplifies team communication by breaking down complex procedures into smaller iterative segments.

Learn More On: Full Guide Of IT Outsourcing Models

3.7. Feature Driven Development

FDD (Feature Driven Development) is an Agile-based software development methodology. Its purpose is straightforward: to avoid misunderstandings that result in costly rework. FDD is frequently misunderstood as focused on each program feature, which isn’t the case.

Breaking down development activities into a feature list on the overall model is what Feature Driven Development achieves. Developers go through an iteration of each feature’s planning, designing, and building. A feature should typically take no more than two weeks to complete.

FDD produces quick, impactful results for each of the actions described as features. This method is intended for large groups, and information is provided via thorough documentation.

Pros:

  • Breaks down complicated tasks into more minor activities, which fuels efficiency.
  • Enable large teams to work on multiple tasks simultaneously.
  • Based on predefined standards and best practices, which leads to predictable success. 

Cons:

  • Not suitable for smaller projects.
  • Highly dependent on the lead developer, as they are in charge of coordinating the tasks between members.
  • It can sometimes deviate from delivering value to the end-users as the model is driven by activities.

Suitable For:

Larger teams working on complicated projects benefit from Feature Driven Development. It combines the advantages of an iterative framework with a more structured methodology. With FDD, you should ideally have a capable lead developer in control.

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

3.8. Scrum Development Methodology

Scrum is, without a doubt, one of the most adaptable software development strategies. It is built on the Agile principle and is well-known for its incremental and iterative methods. The Product Owner, Scrum Master, and Development Team are all in the Scrum approach.

The product owner accepts the client’s feedback and ensures that the team is on track to meet the client’s needs. Meanwhile, the Scrum Master is a facilitator, ensuring that all team members understand the Scrum methodology. The team is responsible for putting the plan into action.

The way tasks are completed in sprints makes Scrum an appropriate methodology for a fast-paced setting. Each sprint can take up to four weeks to complete. Teams can quickly discover issues, present solutions, test them, and receive feedback thanks to the quick execution. It makes tackling time-sensitive assignments a lot easier.

Pros:

  • Short iterations allow quick resolutions to problems.
  • Scrum is very responsive to changes as the process includes regular feedback.
  • Scrum is economical and practical.
  • Regular meetings ensure that team members are on the same page.
  • Contributions of individual members are noticed and appreciated through the Scrum meetings.

Cons:

  • All team members must be equally skilled and committed for Scrum to work.
  • The daily Scrum meetings can be draining for team members.
  • May increase time-to-market if there’s no strict control on the deadline.
  • Not suitable for large projects.

Suitable For:

If you have a project with ambiguous requirements that must adapt to frequent changes, Scum is the methodology to use. For example, you may need to quickly build an MVP and test it with users. Scrum is only effective if you have a team that is totally committed and experienced.

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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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How Do Free Apps Make Money?

The mobile app industry is projected to hit $407.31 billion by 2026. It is lucrative by any standards, and, naturally, you’ll want to tap into the market. However, 9 out of 10 apps are downloadable for free, which brings the question, how do free apps make money?

Freemium Apps Vs. Paid Apps Market

Most ‘free’ apps downloadable on Appstore and Google Play are based on the freemium model. According to Statista, 96.1% of apps downloadable on Google Play and 91.9% on the Apple App Store are free. It is also worth noting that Apple AppStore is the more lucrative market of the two.

The numbers speak volumes of how users tend to go for free apps and are turned off by paying for an app. According to Google, only 1 in 2 people ever paid for an app. The figure explains why developers are ditching the paid apps model in favor of freemium apps.

Freemium Apps Vs. Free Trial Apps Market

The free app market is also split into freemium and free trial apps. While freemium apps allow users access to basic features for free, a free trial app usually allows full access to the features but within a limited period.

Both types of apps do not generate revenue until users start paying to access premium features or continue using the service after the trial. Freemium app has a conversion rate between 1%-30%, although most linger on the lower boundary, while free trial apps enjoy a higher conversion rate of 30% – 50%.

How Much Do Free Apps Earn

Do people spend money when using a free app? According to past statistics, the average user of an iPhone spent $79 for in-app purchases in 2018, a 36% increase compared to the previous year. Most of the money is spent on games compared to other types of mobile apps.

Apps on Apple’s App Store generated $46.6 billion in 2018, while those on Google Play Store brought home $24.4 billion. Considering that more than 90% of the apps on both marketplaces are free to download, it is fair to suggest that the bulk of revenue originates from free apps.

Fortnite, the popular first-person shooter game, generates $1.8 billion in revenue in 2019 from its in-app purchases. How does this compare to a non-game app?

Slack, a popular communication tool, brought home $400.6 million for its financial year-end on Jan 31, 2019.

App Monetization Strategies

The beauty with monetizing an app is that there are many ways to do so. Depending on the type of apps, some strategies are more effective than others. Rewarded video advertising is proven to be the best bet as it’s rated at 75%. It is a form of advertising popular in games where users will need to watch a video ad to receive gameplay items or energies.

At 63%, in-app purchases on the freemium model are the second most effective form of monetization, followed by various forms of advertisements. Paid subscriptions and downloads are far beneath the ranking at only 14% each.

Advertising

Most answers for how do free apps make money will point to advertising, and it isn’t surprising. Ads have dominated various media in our life as they’re proven to be effective. In a mobile app, ads are displayed and monetized in multiple ways.

  • CPM – where the app developers are paid for a number of impressions of the ads.
  • CPC – revenue is generated based on the numbers of click delivered through the ads.
  • CPV – earning is based on the number of views by app users.
  • CPA – user actions like installing the advertised app or purchases through the link lead to the developer’s commission.

Use advertising if you’re not charging any fees from the users. Do note that excessive ads that interrupt the experience could turn users off.

Duolingo and Instagram use advertising as their monetizing strategy.

Freemium Model

The freemium model is increasingly popular and has dominated both Google Play and Apple App Store. Instead of charging users for a fee from the start, freemium apps allow users access to basic features. However, to access premium features, users are required to pay a fee.

There are a few types of monetization strategies within the freemium model. Mobile games allow users to buy game items through in-app purchases. Productivity apps often offer a premium subscription, which removes feature limitations on the app.  

Use the freemium model if you’re hoping to decrease user acquisition cost, yet confident that the users will stick with the app and make purchases now and then.

Skype offers a subscription for its Skype To Go service and sells credits that allow users to use certain features. VCSO, a tool for photo and video creators, offers a premium subscription along with its free app.

Subscription Model

The subscription model is one of the few ways free apps make money. It works by charging users for a recurring amount on a monthly or an annual basis. With this model, developers are assured of a fixed amount of revenue as long as users are subscribing to the app.

Subscription is commonly used by entertainment, media, news, and services. This strategy isn’t popular, as only 5% of successful apps have used subscription in their monetization approach.

If you’re offering VPN, video, or audio streaming services, the subscription model is the best way to monetize. To encourage user signups, you can offer a money-back guarantee period for new users.

Netflix and Spotify operate on the subscription model.

Sponsorship Model

One of the less common strategies, the sponsorship model involves finding a sponsor related to your niche and striking up a compensation structure. In return for the monetary compensation, the app could include the sponsor’s brand, advertise its products, or send users to its website.

For example, if you’ve created an app for diet planning, you can seek out nutrition brands for a sponsorship deal.

It isn’t easy to work out a sponsorship deal, which explains why most apps prefer other more straightforward monetization strategies.

8 Steps To Define The Best App Monetization Model

Despite advertising being a dominant strategy, it may not be a good strategy for your app. Sometimes, a less-popular approach works better, and in some circumstances, you can use more than one monetization model.

The fact is, every app is different, and you’ll need a systematic process to determine the right monetization model for yours.  

Here’s a step-by-step guide.

1. Consider The Apps’ Business Goal

Prior to developing an app, you’ll want to be clear of what you’re trying to achieve in terms of business goals. Is it an attempt to increase brand awareness by getting as many downloads as possible? If so, the paid subscription model may not be the best approach.

If you’re complementing an existing business with an app, and you have a customer base to market to, then the freemium or subscription model is worth considering. For businesses that are only concerned about generating quick income, the advertising model is the easiest approach.

2. Define The Value

Chances are, there are already competing apps that are solving the same problem. You’ll need to determine what values do your app offers, and does it do so differently? It’s pointless to introduce just another app to the marketplace. It will be hard to monetize, even if it’s free.

3. Define Your Target Audience And User Needs

Depending on your target audience, some monetization strategies may work better than others. For example, gamers would patiently click on 30 seconds of rewarded video ads to get freebies in the game. Try doing that with a productivity tool for professionals, and it will be disastrous.

Therefore, it’s important to identify your target audience. Doing so also helps you pinpoint the users’ needs and pain points, which is essential to ensure high signups, engagement, and retention.

4. Check Your Competitors And Evaluate The Risks

As lucrative as it is, you’ll want to weigh your options before plunging into the app industry. This is particularly true if you’re planning to launch an app in the already-crowded gaming marketplace. Check out who you’re competing against and explore their strengths and weaknesses to explore possible opportunities.

Are the competing apps offering good user experience while running ads on it? Or is using a paid subscription model a wise move? Sometimes, it’s easier to be profitable with a less popular monetization strategy in a narrower niche market.

5. Monetization And Metrics For Your Model

Once you’re comfortable with the information gathered, you’ll need to decide the app’s monetization strategy. Sometimes, it’s possible to combine two or more ways of how free apps make money.

Then, you’ll need to define the metrics to gauge the success of the monetization strategy. For example, Spotify has a conversion rate of 26.6%, but most apps convert at 1% for the freemium model. Decide your app’s target and monitor when it hits the market.

6. Calculate The Economy

Ultimately, you’ll want to be profitable regardless of which model you’ve chosen. You’ll need to define the number of users, conversion rate, average spending, and a predictive timeline to breakeven.

You’ll then want to be realistic and compare it with the current market sentiment and how other competitors are faring. These figures help you to navigate the choppy water, mainly when the app is newly-released.

7. Prototyping And User Testing

To have an easy-to-monetize app, you’ll need one that is well-accepted by the users. The only way to ensure that is to build and prototype and test it with the uses. It could be in the form of an app with only the visual layout, or a sketch presented to a group of users for feedback.

What’s important here is for the users to understand what the app offers and how it works to solve their problems.

8. Build MVP

You’ll want to balance cost, profitability, and time-to-market. Building an MVP, which contains the basic features in a skeleton frame, helps to achieve that. Launch with an MVP and gather the user feedback on what’s working and what’s not.

Make the necessary revisions based on the feedback and gradually include other ‘nice-to-have’ features. Take note of the engagement factor and if it leads to higher conversion.

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