Startup Owner’s Guide 01: How to Start Digital Transformation with Outsource

Posted 31/03/23

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This year the world is being terrorized by recession and massive layoffs. However, our findings are different. According to Statista, companies are quick to conduct budgeting related to external IT services. By 2021, a company could spend more than $413.72 billion to outsource.

Increased demand for digital transformation is driving outsourcing. Based on this, many companies have challenges in finding the best talent according to their needs in digitizing their business. But How to start outsourcing? What should I look for when partnering with outsourcing? Take a look at our findings.

Why Outsource Is Important?

Why must outsource

Outsourcing development has become a popular choice for businesses looking to develop digital products like web, apps, and enterprise software. But, why must outsource for accelerating your digital transformation? Here is what we find and hopefully can make you clear why it is important.

Read Also :  How Startups Can Leverage External Teams for Development

1. Outsource Development Can Save You From Overhead Cost

Outsourcing development can be a cost-effective option for businesses. Based on the data from Deloitte, 70% of companies who choose to outsource their software development projects, do so to save money. The same studies have shown that cost reduction has been viewed as an important but not the main reason why tech companies would choose to outsource.  

Outsourcing companies in countries like Indonesia, India, China, and Eastern Europe offer lower hourly rates compared to their Western counterparts. This means you can save a significant amount of money on app development costs. Take a look at our discussion about how much a software developer costs hopefully, can help you to find the best rates with your budget.

2. Outsource Development Offered Time-efficient 

Developing a digital product can take a lot of time and effort. An outsourcing company can help businesses save time as they can focus on their core competencies while the dedicated team takes care of the development process. 

3. Outsource Development Give Access to Premium Grade Talent

In addition, the outsourcing company will give businesses access to a pool of Grade A developers with specialized skills and expertise. Surely this will be the right solution. Basically, according to data from Deloitte, finding, developing, and keeping the right talent with the right skills at the right price is more elusive than ever. Even up to 50% of executives identify talent acquisition as a top internal challenge in meeting their organization’s strategic priorities.

Top Executive challenges in meeting

4. Outsource Development Can Reduce risk 

Developing a mobile app comes with its own set of risks. Outsourcing can help businesses reduce the risk associated with app development. Outsourcing companies have experience in developing mobile apps and can help businesses navigate potential risks and challenges.

Key Takeaway: Outsource is a Good Step

When your business situation has just started or is in the process of expanding into other markets that have significant opportunities for you, choosing to outsource is the right choice. You get many advantages such as:

  • Saving your operational costs
  • Get a Grade A talent of the developer
  • On schedule
  • Reduce a Risk and issue
Read Also :  Why Outsourcing Is Better Than In-House for Startup

Factors to Consider Before Outsourcing  

7 Factors you must considered before outsourcing

Before deciding to outsource app development, businesses should carefully consider several factors to ensure that the process goes smoothly. Here are some of the factors that businesses should consider before outsourcing development:

1. Look at the size of your Wallet

One of the most critical factors to consider before outsourcing is the budget. Outsourcing can be a cost-effective option, but businesses should ensure that they have a clear idea of their budget and what they can afford to spend. Businesses should also consider the hourly rates of outsourcing companies in different countries, as rates can vary significantly.

2. Project management skills 

Make sure the vendor has experience managing projects. They should have a structured process for managing projects and be able to deliver on time and within budget.

3. Communication

Clear communication is crucial when outsourcing. Businesses should ensure that they have a clear communication plan in place and that they can communicate effectively with the outsourcing company. Businesses should also consider the language barriers that can arise when outsourcing to a foreign country.

4. Technical expertise

Ensure that your vendor has the technical expertise and experience to deliver your software project. Check their portfolio and ask for references to see if they have worked on similar projects before. 

5. Security 

Security is another critical factor to consider before outsourcing. Businesses should ensure that the outsourcing company has proper security measures in place to protect their intellectual property rights. They should also consider the location of the outsourcing company, as some countries have stricter data protection laws than others.

6. Quality assurance

Quality assurance should be a major focus of your vendor search. To ensure that the software meets your requirements and is of high quality, they should have a testing and validation process in place. 

7. Timeframe

Finally, businesses should consider the timeframe for app development before outsourcing. They should ensure that they have a clear idea of how long the development process will take and whether the outsourcing company can meet their deadlines. Businesses should also consider the time zone differences that can arise when outsourcing to a foreign country.

Read Also :  7 Hacks to Manage Time Zone Differences on Offshore Team

Key Takeaway: Selecting from the best

There are several factors that you need to consider when choosing to hire an outsource development company. You will use this as your benchmark for selecting a quality vendor.

How To Choose the Best Partner For Outsourcing Development

Step by step to choose best provider for outsourcing

That’s a simple question. All you need to do is know the step when choosing the best software development company. In this section, all of these things will be discussed thoroughly. Let’s get started!

1. Set up your requirements

In this first step, all you have to do is form the expectations of the cooperation built with the vendor and determine the tasks given. You can start by prioritizing, defining taboos, and adequately looking for a partner. It would help if you also chose the criteria.

There are a few questions you can ask yourself at this requirements stage:

  • What is your top priority that cannot be compromised? For example, Domain Expertise.
  • What potential should be in the vendor you will choose? For instance: Certifications.
  • What is something you can’t accept when working together? For example, Low English proficiency.
  • What criteria will you use in vendor evaluation? For instance: Company maturity.

2. Study the market

Once you have decided on the goals you want to achieve with outsourcing and understand how to measure your success in this endeavor, the next step you should take is to study the market. Quickly, you identify the most potential vendor candidates by googling or browsing various ranking services.

At this step, you will also be assisted with several questions that you can ask yourself, including:

  • What are the publicly available resources you are going to use for evaluation? For example, Clutch and GoodFirms.
  • What rating do you want your vendor to have, and what is not acceptable for you from them? For example, More than 4 is desirable. More than 3.9 is needed.

3. Request for Proposal (RFP) and Analysis Stages

Forming an RFP means that you describe what your business is like and define the requirements and objectives of your market. Here you must be able to think clearly and choose the right words to understand the information conveyed to the vendor.

Likewise, you must carefully assess the vendor you will be cooperating with at the analysis stage. Assess vendors from existing and previous clients, inquire about their experience with vendor companies, and explore testimonials.

You need to find a way to objectively assess the vendor’s expertise at both of these steps. Then, you can list doubts and questions you want to ask the vendor to start an open dialogue.

4. Evaluation and Decision

Before you get to the research, analysis, and RFP steps, you may already know how each vendor on your candidate list works. Now, you are required to seek more in-depth information regarding your potential vendor during the evaluation and decision steps.

Conducting a Q&A session can be done as a general method of evaluation. For example, you can find out how exactly the vendor will meet your needs, ask about the details of the software development process, and value ease of communication.

During this step, it’s time to answer all the questions you’ve created for potential outsourcing vendors. After that, you can ask another question, but the difference is that the question is aimed at you. So first, ask how you feel about each candidate vendor, and from there, you can choose one of them.

Here are some questions you can ask during the evaluation and decision steps :

  • What does a vendor offer in response to your specific requirement? For example, Data privacy in patient-doctor communications will be ensured with end-to-end message encryption.
  • Are you satisfied with the terms for staffing and onboarding? For example: On average, it takes this vendor four weeks to staff a project team.


After knowing the steps to begin finding your best outsourcing development company, you are expected to no longer be anxious or worried. Your steps are proper. Now, all you need is the courage to start. 

Furthermore, if you need the best provider to support your development now, take a look at our profile what service can help you to boost the growth of your business.

If you find a need that is relevant to you there, don’t hesitate to drop a line or message to our expert and we’ll respond to you quickly.

About us: We’ve helped startups for building custom software, mobile apps, prototypes, and MVPs. Having large capacities, startup experience, and proven development processes make us stand out.

We are experienced in addressing the business needs of both corporations and startups. Also, we’d be happy to assist you!


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