Originally published in March 2010, last updated in May 2020.
Let’s take a step back from talking about RFPs. Alongside writing this document, organisations are being faced with the difficult task of choosing which suppliers and developers to approach. In most cases, these businesses have already decided they want to outsource a piece of software development.
They have a good idea of what they will include in their software RFP, but are unsure how to decide which development team to send this RFP to and what sort of project pre-qualification is required in order to come up with a supplier shortlist.
Offshore software development is the process of looking for a software development company in order to take advantage of untapped talent and cost savings. Increasingly popular, as there are now numerous options when it comes to finding a development company.
Not to mention, offshore development is an incredibly effective way of getting your project done but, as yet, there are few guidelines in place for businesses going offshore. This can lead to a lot of confusion and wasted time if you’re not sure what kind of qualifications or expertise that you should be looking out for.
Keep in mind that the development of your software may just be the most important project that your business will undertake and so you need to invest the appropriate amount of time in choosing a supplier.
This article aims to give you an idea of what you should be looking out for and how you can go about choosing your offshore development team.
Getting started with offshore software outsourcing
When it comes to searching for a suitable offshore development partner or company to hire, perhaps the single most useful thing to do is to talk to peers about their experiences in offshoring project management – in particular, what they liked and didn’t like about their outsourcers and what, out of this list, can be attributed to specific cultures.
Finding an offshore software development company to hire
The IT Director of one of our customers’, Steamship Mutual, realised after talking to other CIOs and IT Directors and project management executives, that the effects of the time difference with Asia might make it a difficult destination for them. He says that feedback from peers made him understand that nearshoring would be the best route for his organisation. Having arrived at this decision, his team looked at several organisations within western Europe including the UK and Ireland and, various Eastern European countries. From this, they made a short-list of five companies and visited them all. After taking the time to follow a strict tender process to make sure that all bases were covered, we were delighted that they chose us as their offshore team!
As you can see, location was very important to him, so let’s take a closer look at this criterion then.
Probably the most important decision that you’ll make is the location of your offshore development partner. Although distant locations were once popular due to the cost savings, these days it’s generally considered that the issues outweigh the benefits. Although there’s no doubt that outsourcing to developing countries is cost-effective, there can be a huge headache in the form of language barriers and time zone differences.
In 2020, nearshoring is a clear favourite when it comes to outsourcing software development offshore and, in the last couple of years, there have been a few stand-out Eastern European countries emerging:
Poland has become a force to be reckoned with for nearshore software development outsourcing in recent years. This is largely due to the fact that Poland has a wealth of talent as more and more students choose technical subjects in direct correlation to demand. Information Technology is the most popular field of study, with 71,000 students and 11,000 graduates a year, allowing the country to develop into a fully-fledged outsourcing location, with many developers speak fluent English.
The World Bank Group’s flagship Doing Business report which compares Business Regulation in 190 Economies, gave Poland the 40th place out of 190 countries listed in the ease of doing business ranking.
Next door to Poland, Ukraine has begun to show itself as a powerhouse when it comes to software development outsourcing. As reported in 2018, this is largely down to a boost of investment in Ukrainian IT companies to the tune of $630 million over the last five years.
Not usually known as a centre of commerce, Romania has begun to show its face in the offshore software development market due to favourable tax conditions created by its government for software development activities. This has seen the industry grow exponentially and has attracted some of the big guns including Microsoft and Huawei.
Creating a shortlist for your offshore developers
Once you’ve chosen the location of your IT partner, it’s time to narrow down the companies.
There are many ways to do that. You may think that ‘word of mouth’ approach to offshore development is an insignificant part of the process but it’s more than that. I think that asking partners, business associates and even people you meet at conferences who they use for offshoring and whether the delivered software met their expectations or not is a great source of knowledge.
From what our customers say, it seems that another good place to start is the internet. You can usually tell from a company’s website whether or not the company can meet your criteria.
Of course, you then need to see for yourself if the development team really can deliver but, examining websites and, in particular, the case studies and customer testimonials featured, can be an effective way of creating a long list, if not yet a shortlist. Other useful places for advice and supplier details are associations like the Global Sourcing Association. These groups can provide free, expert advice and also details of reputable suppliers.
Supplier directories too contain useful information that allows you to compare suppliers in terms of their skills, size, location etc. These avenues of supplier discovery are, I think, the main ones. Once you have been able to compile a ‘long-list’ of potential offshore development partners, the next step, based on what you’ve learned about these companies, is to apply some of the criteria you have in mind to them when looking to make a hire.
How to choose your offshore software development company?
After you’ve done quick research, it’s time to drill down the options by creating a shortlist of suppliers. As we’ve mentioned, word of mouth can be really helpful here, as can forums and social media. Most specifically, using these methods will help you to weed out the suppliers that you are definitely not interested in.
From your list of suppliers, your next step is to dig deeper to see if each company has the skills and experience that you require for your project. You can often find this information on a company’s website but, if not, feel free to contact them to ask for specific samples of previous work as well as proof of credentials.
Now that you’ve whittled down your list of offshore suppliers, it’s time to put together a Request For Proposal. This is a document which lays out the parameters of your project for a supplier and is a request for them to send you a proposal for your project. Your Request For Proposal should include, among others:
- An overview of the project
- A background of your company
- The goals and objective of your project
- The scope of your project
- Target deliverable schedule
- What you’re looking for in an offshore supplier
Receipt of this information will put you in a position to narrow that shortlist down even further and, you’ll now be ready to meet with potential suppliers. At this stage, it’s a good idea to arrange a meeting at the workplace of the supplier so that you can get a feel for the company and its employees. If you wish, you can also task each company on the shortlist with a small test project to see how they perform. You’ll also want to know just what your offshore development team will be made up of. This will, in general, include (at least) a Project Manager, a Project Owner, one or more Technical Leads, a number of developers and several members of testing and quality control personnel. The team will, of course, depend on your project but, this is a good indication of what you should be looking for in an effective and proactive offshore development team.
What can you expect from your offshore supplier?
If this is the first time that you’ve hired an offshore software development company, you may be somewhat in the dark as to the process. Although most offshore development companies are, of course, honest, some will try to take advantage of your lack of knowledge/experience in the area.
To help avoid this, the following is what you can expect from your supplier after signing on the dotted line:
Software Development Cycle
This is something that your supplier should already have in place – and should, in fact, have shared with you during the recruitment process. This initial stage is the process of gathering information and planning the system design, methods of analysis, coding factors and the process of quality control and testing. Before beginning the project, you’ll need to ask your software development company to explain this software development cycle to you in detail so that you know exactly what to expect.
Once your project is underway, you should have been made familiar with the process and the people carrying out the project. Your project manager will keep you up to date with regular reports on progress and any issues.
It goes without saying that this is one of the most important stages of your offshore software development project. Your team should be testing the product at every stage to make sure that it adheres to the brief and is functioning as required. This testing should, of course, be shared with you. This constant testing should ensure that the final product will pass any standards needed and required.
Monitoring and communication
Although the offshore development team will be responsible for the implementation of the project, it is still your project and so you will need to monitor progress from start to finish. Things to look out for include time management (are you getting the hours that you’re paying for), honesty, productivity and reporting.
By its very nature, an offshore team means that it may be difficult to ‘pop round’ for a meeting in order to troubleshoot any issues or monitor progress first hand. For you, as the client, this means that finding other ways to monitor your project is imperative. Although you should, of course, trust your supplier to do what it promised to do, blind faith is never a great idea.
For this reason, developing a solid communication strategy is essential. When first meeting a supplier, it’s a good idea to ask about their usual reporting and communication process but, this doesn’t necessarily mean you have to accept that if it doesn’t work for you. Depending on the project, you may require daily or weekly updates and reports and, you may even want to see physical progress of your product. For these reasons, it’s a good idea to implement regular catch-ups via telephone and video meetings as well as insisting on evidence of progress throughout the project.
Communication throughout your software development project is absolutely essential – particularly if you’re not especially ‘techy minded’. Partnering with a software development company is all about co-ownership and, so, if there’s anything you don’t understand – ask!
If you’ve found the company that meets all of these criteria then its nothing left to do but to sign the contract.
To help you go through this process and to make sure you won’t miss anything, we’ve browsed through lots of Requests for Proposal (RFPs) we’ve received over the years from our clients and, following a thorough analysis of them, we’ve compiled an RFP template with a list of areas you should cover.