How to Choose a Software Development Company in 2023

July 31st 2023

Software development outsourcing continues to grow all the time. Forbes has found that the number of companies outsourcing is expected to rise by 70% in 2023. Areas such as IT support and application development are especially popular among companies that don’t have the in-house capacity or expertise they need. 

Whether it’s businesses in emerging markets like FinTech that have to innovate quickly, or the 24% of small businesses who outsource to increase efficiency, it’s a leading option for companies who want to embrace new opportunities and digital transformation.

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Some software development companies offer expertise in specific areas and identifying which one is best for your needs can be tricky. This is why we’ve put together this guide on how to choose a software development company and get the perfect partner for your next development projects.

Why choosing the right software development company is crucial for you

If you’re undertaking new development projects, whether exploring web development or new innovations like artificial intelligence to improve customer service, getting the right software company in place is one of the most important decisions you’ll make.

That’s because the risks of getting it wrong are considerable. These can include (and are not necessarily limited to): project management that’s poor or unsuitable, and development methodology that’s outdated. The risks of outsourcing software development also extend to a lack of relevant industry or technical expertise, specific technologies, poor quality assurance, inadequate understanding of your needs, or a limited rapport or cultural fit with your organisation. 

When you have the right software development agencies in place, the chances of you getting a quality application to market faster and within budget are much higher. You should also benefit from a stress-free experience, clear communication, and development services that complement your in-house expertise rather than superseding it. This can improve not only your bottom line, but also the satisfaction levels throughout your full-time workforce

Factors to consider when choosing a software development company

Now we’ll explore how to choose a software development company on a practical level. This could include having a list of potential vendors, clear project requirements and a set budget. As with any professional partnership, you’ll naturally want to undertake due diligence on their development services, experience and overall approach. But there are certain areas which you should pay particularly close attention to:

1. Evaluating the company's expertise and experience

What’s important here is to check the details behind the claims. For example, you’ll want to know how long they’ve been offering development services and which industries they’ve been operating in. 

You’ll also want to know about the skill-sets that their developers possess, along with any technology stacks they currently have in place. Evaluating these matters first can help you work out whether to pursue further lines of enquiry with certain software development firms.

2. Assessing the company's portfolio and past projects

Your prospective development agencies will be able to explain the information above very clearly. What’s important now is to get the hard evidence to back it up. They should be able to present an extensive portfolio of successful development projects they’ve carried out, and display a proven track record of innovation, reliability, security and technical know-how. 

Your outsourcing partner should have a clear understanding of your industry, market and business processes. In particular, look for any work that they have done in the past with businesses in your specific industry, or in the type of development projects that you wish to get involved with. This demonstrates that they will have plenty of transferable skills that will be useful for your specific software projects.

Bear in mind that some outsourcing companies may have restrictions to share information on previous projects due to NDAs. However, they should be able to provide general information about their approach and development processes. 

3. Checking for client reviews and testimonials

Having seen and heard the software development company’s initial sales pitch, you can now go and do your own research to verify their credentials. Start by looking for independent reviews and testimonials online that attest to the quality of their work; you may also be able to get in touch with your industry contacts to discover their experiences.

Don’t restrict this research to the practicalities of their software engineering itself. You can check customer feedback and online reviews from past business partnerships on platforms such as Clutch. Platforms like this can be very useful to assess the accuracy of information as every customer review is verified by the platform. 

Websites like Glassdoor can also be extremely helpful in finding out what they are like to work with as a company and whether there is a positive culture within their organisation. This will ultimately provide a clearer understanding of what to expect from the experience.

4. Determining the company's development process and methodologies

If you’re happy with all three points above, then you can start to dig into how your partnership will work in practice. A good starting point here is to discuss their approach to development methodology and how they would normally go about mobile app development or web development (for example). 

They should be able to demonstrate their adherence to Scrum, Agile or any other methodology, and clearly explain their project development process from start to finish. A good development methodology should incorporate robust planning, accelerated delivery, ongoing project updates and modern communication tools. This will guarantee you are up-to-date on every aspect of the project. 

5. Reviewing the company's security practices 

Security is a crucial part of outsourcing, as you will most likely share sensitive information with your software. It is important to understand the measures your software partner has in place to ensure your ideas, product, solutions, and proprietary information remain secure. Here it would be a good opportunity to ask them about their security approach and how they would keep your sensitive data and intellectual property safe. 

Not all outsourcing companies will treat security matters consistently, so make sure you always ask the relevant questions and get as much information as possible.

6. Understanding the company's pricing and payment structure

Some prefer a fixed-price model, where the statement of works and total cost is agreed up-front, and only changed when there are alterations to the scope of the development project. 

Alternatively, some software companies provide a ‘time and materials’ approach, where the use of developer time and resources is logged, and you’re given a total cost to pay at the end of the project. Each approach has its pros and cons, but try to get clarity on which model will work best for you, and what it means for your budget right from the start.

7. Considering the company's communication and support channels

Having excellent communication with your development partner is key to the success of your software project.  Challenges related to communication are one of the most common issues experienced by businesses when outsourcing. 

If you’re looking at an offshore development team or even just one that’s working remotely, it’s essential that one party can easily converse with the others and get help as and when they need it. Staying connected by sharing and discussing ideas throughout the development process will ensure everybody is on the same page.

You’ll need to know the methods and channels of communication that they’ll use and the times of day they’ll be available. This is especially important if offshore and working in a different time zone. Another factor to consider is how they intend to prioritise any issues that require urgent discussion or escalation.

Questions to ask when choosing a software development company

As you can see, when choosing a software development company, there’s plenty of information to take in. So in summary, to ease your due diligence and evaluation process, here’s a checklist of the key questions to ask of your prospective software development firms:

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A partner that takes the time and effort to understand your software development needs is one that will be able to address all your priorities from this checklist. As a Niche Player in the Gartner Magic Quadrant for Custom Software Development Services, Ciklum puts front-and-centre in our approach to outsourced development. Start your journey towards better outsourced developments today by getting in touch with our team.


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