A proper guide on how to choose a software development company that best matches your requirements, business model and budget. We also cover a few tips to avoid making the wrong decision and negotiate with your partner. Let’s Synodus walk you through!
Key Takeaways: Checklist To Choose A Good Partner
With so many software development vendors on the market, finding one is simple but tricky at the same time. For busy readers, we have this simplified checklist that you can use on the go. However, I recommend exploring each step, as it contains more tips and tricks to help you select a software vendor:
- Search through Google, listing site, social media and from your friends to make a list of potential partners
- Looking through their portfolio to make sure they have the services you need, having worked with your industry or wanted tech stack and is qualified to do the job.
- Compare them and build a shortlist of 3 to 5 vendors for the first meeting.
- Have a direct discussion with them to learn more about their approach, expertise and potential offer. At the same time, disclose your requirement with them in transparency.
- Ask for POC in which you evaluate their proposed solution.
- When making the decision, remember to balance cost and quality.
- Pay close attention to every term and condition before signing the contract.
What To Prepare Before Choosing A Development Partner
When you go shopping, there’s usually a basic idea about what you might want to purchase, even if you’re just browsing. This idea could be based on your personal style, whether the store caters to men or women, your preferred price range, or what’s missing in your wardrobe. If the store meets these criteria, you tend to spend more time there. If it doesn’t, you’re likely to leave.
The takeaway is that we don’t wander into clothing stores without understanding what we seek.
This concept also applies when selecting a development partner: “What is the scope, budget, and schedule of your project?” You should have a big picture before jumping on any train.
First and foremost, determine your project objectives and how you want to achieve them. Consider what problems your future app will answer.
Second, establish a defined project timeframe with completion date and crucial milestones along the way. Consider potential elements that can impact your timetable, such as project complexity or regulatory constraints. This way, you can monitor progress and make changes as needed.
Finally, assessing your budget with a clear financial plan will help you identify software development companies that are willing to operate within your budget. If funds are limited, for example, you can create an MVP with the most basic functionalities. As the budget expands, an MVP can be fine-tuned. You can order an app with enhanced capabilities if you are confident in the idea and its viability.
Since this crucial step will clarify the requirements factors more clearly, you can choose the suitable software development partners.
Step To Choose & Evaluate Your Partner
1. Research & Make a List of your Potential Partners
After having all the foundation requirements, you start to compile a list of potential software development companies. You know precisely what you want from your software company and have written detailed requirements documentation. As a result, finding the companies best suited for your relationship will be much easier.
How can we find a software development company?
- Search Engines: With a simple click, you can uncover the best software development businesses on Google or Bing.
- Listing Sites: Clutch, The Manifest, Good Firms, and others. Companies worldwide list their name here, and you can sort them by ratings, reviews, and other criteria to find the best match.
- Top List Blogs: Clutch and Google usually give thousands of results at once, which can be confusing and hard to classify. Meanwhile, top-listing blogs can provide quick and informative access based on geography, industry, and other criteria. For examples: Top 10 Emerging Regional Custom Software Development Companies (Updated 2024)
- LinkedIn is one of the fastest-growing venues for finding business partners for software development. You can directly check their social preference, their working culture, learn about their people, and talk with their team.
- Remote Work Portals: Businesses can use remote work portals to hire remote developers. However, some sites, like Upwork, also include a lot of businesses. These sites are best for short-term jobs. For example, you only want to hire one front-end or a React Native developer.
2. Make the First Scan by Looking through their References
Suppose you found from 10 to 20 companies after the first step. Now, let’s look at who they’ve previously worked with and the types of jobs they’ve done:
- It helps you to check if they’ve done anything similar to what you’re looking for.
- It assesses the company’s level of experience.
- It lets you determine the scope of the company’s previous work and whether they can handle your task.
Where to find this information? Through their website, social media or Clutch profile. We actually do not recommend contacting their team during the scanning, as sales can be annoying sometimes. Plus, who has the time to talk with 15 to 20 companies at once? After this step, you should expect to narrow down your list to 10 or even 5, if possible.
Requesting references from current or previous clients with whom you can share their experience working with the organization may be equally instructive. But many companies signed NDA and couldn’t reveal their client’s name, which might be challenging to check credentials.
| Tips: Organizations with diverse customer bases and portfolios are not necessarily the best fit for your use case. The crucial point is that the outsourcing partner has experience in your industry and technology. Clutch is a great place to find a partner. It has anything you need (without talking to a sale reps), from location, language, working time, tech stack, client reviews to price range. |
3. Compare Between Selected Ones to build a Shortlist
A shortlist should only consist of the 3 to 5 best names you can find. This way, you can quickly dive deep into them and make comparisons.
One tip is to create a comparison matrix to classify your list and select ones that meet your requirements. Here’s are a few metrics you should include:
This information, however, won’t easily be found on the Internet. At this point, it’s best to contact them for a portfolio and detailed description. But again, keep the circle small and only talk with a few agencies at a time.
| Tips: This information, however, won’t easily be found on the Internet. At this point, it’s best to contact them for a portfolio and detailed description. But again, keep the circle small and only talk with a few agencies at a time. |
4. Schedule Meeting for Deeper Analyst
Almost every software development company will push you to have a meeting (face-to-face or online) after a few chats. It’s much easier to discuss that way, I agree. But is it worth your time?
| Tips: Gently deny those that don’t make it into your shortlist (we can always circle back if needed) and only focus on the shortlist for deeper discussion |
What will Happen during the First Meeting?
The vendor will likely want to clarify your requirements and project scope. They will ask many questions about it. Make sure you come up with a straightforward approach and speak up any ideas.
You will also want to identify other information about their work process, engagement models, pre-proposed cost (it’s hard for a specific number, but a range is good enough), technology stack, communication, and team culture.
- If the vendor doesn’t match your needs, gently deny them and end the discussion.
- If the vendor does, let’s move on to the next step by asking them to provide a proposal with a suggested solution and estimated price.
Questions to ask during the first meeting
- What is your approach to my requirement?
- Will my preferred tech stack work with the requirement? Do you have any other suggestions?
- My primary goal is (scalability/ flexibility/ friendly interface/automation/ etc), what will you do/ what technology will you suggest ensuring that?
- How long does it take to build an application like this?
- What is your suggested payment method (Fixed Price or T&M) and cooperation model (dedicated team, staffing or project-based) for my project?
- What are your working methodologies used for project delivery?
- How will I get updates on the progress?
- What is the best working time for your team (for the offshore outsourcing team)
- How many people will work on my project?
A few things to keep in mind during the first meeting
Don’t just focus on technical expertise. Through direct interaction, try to find the dynamic between you and the vendor as well. This includes business culture, business & technology mindset, and work & management methodology. These shared interests will strengthen the partnership and avoid potential conflicts in the future.
Write down the questions you want to ask before the meeting. We can easily get carried away during the talk, so make sure you have everything you need firsthand.
Discuss the next step at the end of the discussion and clear any confusion about the potential partnership. If they are not qualified, it’s best to tell them immediately. And don’t forget to set a deadline for their proposal.
Transparency is the key. During direct discussion, there’s no time to think of a good response. Utilize this precious time to investigate as much as you can. If you feel any fog and cloudiness, the vendor definitely doesn’t have an answer.
5. Evaluate their Suggested Solution
What to check after receiving a proposal?
- The chosen technologies and frameworks: Learn what and why they suggest these programming languages, technologies, and frameworks for your project. What part of your requirements will these solve? Software development companies usually tell what their team works best with (unless you specifically ask for something).
- The working methodologies: There are many software development methodologies to use. Each can affect the progress, price, result quality, time adherence, your involvement in the project, and communication with the partner. For example, the agile method will break the project into phases, which can be reassessed after every sprint. Meanwhile, the waterfall works task after task in linear progressions.
- Team composition: How many people will work on your project? The team composition will define the pricing and work progress. Check what task they will be responsible for, and make sure you have anyone you need on board.
- The cooperation model: This will identify the management method and involvement of each party. It would help if you chose what is best to control and co-manage the project from afar.
- Pricing: Of course, the part we all want to know. I recommend not to rush over it without considering the above. Why? Price hardly says anything. It might be higher than your budget, but maybe the suggested solution is simply better than the rest. Yet being cheaper doesn’t mean it’s low quality. The key is to balance quality and cost to avoid overbudget. Learn a few tips to control & reduce software development costs!
You can have a second meeting if needed to understand the vendor’s approach and solution at a deeper level.
Also read: The difference between POC vs MVP vs Prototype – Which one to ask your vendor?
6. The Final Decision: Balance Between Cost & Quality
As I said before, cost doesn’t say anything about the quality. Cheaper rates do not always imply a better bargain. And there are thousands of cost overruns and failed projects with the most prominent brand name. Project delays, higher-than-anticipated costs, a lack of transparency, and other software outsourcing risks can always come up, regardless of brand name and price.
How can you strike a balance and uncover the best business opportunities? What exactly is “value for money” in software development? Here are some tips:
- Estimates should be taken with a grain of salt. The longer a project proceeds, the more likely future predictions will be incorrect. Cost overrun happens a lot, but under budget rarely happens. My tip is to spend 10-25% of contingency so you can always prepare. For example, if the project is estimated to be finished in 10 months, adding another 2 months as backup in your planning is best.
- Seasoned coding skills will minimize time spent on fixing bugs and iterations. Meanwhile, good practice of project management ensures a smooth process. When all of these criteria are combined, you get a project that functions well with the least time and effort.
- Look for a seller of the appropriate size. Choose a software development partner whose (1) has the same or close to your company size or (2) whose project will contribute between 10 and 25% to their revenue. This is why you will be valuable to them, and you will be able to attract the best talent for your project.
Making the final call is hard, but you have to. And remember that setting all the technical expertise and pricing aside, go for someone that also matches your team energy.
7. Sign the Contract
Before beginning the cooperation, the most significant stage is to draft and sign a contract. The outsourcing contract would include a lot of important information, such as the partnership type and the team members guaranteed to the SLA, among other things. Here is a contract reading checklist:
- Project scope in detail
- SLA stands for service level agreement.
- Assets that must be transferred
- Product warranty and ownership
- Duration of completion
- Strategy for Exit
- Cost and payment plan
- Clauses of indemnification and subcontracting
- Contracts for intellectual property protection and non-disclosure, boilerplate testimonials, and hazy portfolios.
Make certain that you have completed all conversations with the final vendor before signing the contract. To avoid misunderstandings or miscommunications later in the development process, you should both be on the same page and leave nothing unsaid.
4 Tips To Avoid the Pitfalls During Selection Process
1. Be Cautious of These Partners
Your chances of hiring a good software development partner will rise by keeping the following factors in mind while evaluating possible ones:
- Avoid collaborating with considerably larger companies than your own.
- Be wary of partners who provide services at rock bottom and one-in-a-lifetime pricing. Affordable is different from cheap. Cheap services may be compromised in terms of quality, and they may not give the degree of knowledge required for your job.
- Avoid partners that profess to be specialists in every technology. A partner who promises to be a jack of all trades but a master of none is likely to be a jack of all trades but a master of none.
- Be cautious of partners who have low-quality websites, generic testimonials, and ambiguous portfolios. These could be indicators that the company is not as experienced as they claim.
2. Consider How Long Have They Been Around
If a development company has been in business for several years and has not yet gone out of business, there must be a demand for their services. This provides some assurance.
However, just because an agency has recently opened does not imply it is bad. Determining the quality of their software development outsourcing is more complicated. If you’re interested in a new agency, search for its founder’s name on Google. This is a good sign if the person is well-known in the professional world and has been in the business for a long time.
3. Make a RFPs (Request for proposal)
Rushing through this can result in miscommunication and choosing the wrong partner. Spend time creating this document with clarity and precision, so your partner can understand your requirements and propose a suitable solution.
4. Don’t Be Attracted By Low Prices, Negotiate Instead
Price is important when selecting a development partner, but you should let it be the decisive factor.
Instead of going straight to someone with a high price thinking it will bring high quality or someone with a low price to save some money, you should negotiate first to find a reasonable price that brings your wanted results.
Bonus from our team – after working in 100+ projects, here’s a few pocket trick to Reduce your software development cost!
Synodus – We Build Your Software. You Scale Your Business
Located in Vietnam, we are a fast-growing custom software development partner in the region, recognized by Clutch!
Aiming to become your strategic partner, let us take care of your product development and digital transformation, while you focus on scaling your business.
We are not just execution-only developers but your ally, utilizing the emerging technology of Blockchain, Data, AI, IoT, low-code and an extensive tech stack to tailor the best-suited software for you.
Our team of 250+ mavericks has successfully delivered more than 100 projects in the last 4 years with an 88% satisfaction rate. We proudly work with clients across industries and of all sizes, act as a supercharge for your business accelerator.
Choosing the right software development company can be tiring and challenging. But Synodus is always here to help!
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