The Complete Guide to Outsourcing IT Projects

There is no doubt: outsourcing software development projects makes digital acceleration accessible to all. For the first time in the history of outsourcing (and thanks to a host of new technologies that have made remote work commonplace), any company in the world can gain instant access to the best developers on the market.
This has, of course, put a spotlight on technology adoption, giving rise to what we now call digital differentiation. In other words, the competitive advantage now depends on who has the best technology and the best IT talent at their disposal. This is easy to see when you consider that the leading companies in any industry are those that know a thing or two about the best software solutions.
But you're probably already aware of all this, which is why you landed here at "The Best Guide to Outsourcing IT Projects in 2024." So let's walk through and dive deeper into exactly how you can outsource your IT project, which parts you can outsource, why or why you shouldn't, and much more.

How to Outsource an IT Project?

Because the IT industry emerged relatively recently—just over a decade ago—business leaders have encountered various approaches to outsourcing IT projects. I’ve heard horror stories about projects that delivered completely the wrong products, as well as inspiring stories about companies that saved a ton of money on development while getting a better solution than they expected.
This raises the question: What did the first group do wrong? What makes or breaks IT outsourcing?
The answer is probably simpler than it seems. Contrary to popular belief, outsourcing is not about finding the cheapest solution, but about getting the most value for your money. In other words, if you want to use outsourcing correctly, you need to focus on cost-effectiveness.
The most important step along the way is choosing the right provider. For many, selecting the perfect offshore company can be a challenge, especially given how many there are in the world. Fortunately, there are several aspects you can always look for:

Open Communication and Workflow: Open communication and workflow are the most critical stages of outsourcing. Your software outsourcing partner must be fluent in English or your chosen language. Additionally, their workflow should align with yours throughout the development cycle.
Standardized Security Protocols: In a world increasingly driven by technology, cybersecurity is more important than ever. Ensure your chosen IT company has up-to-date security protocols to keep all data and software products safe.
Highly Skilled Software Engineers: Outsourcing software development gives you access to world-class IT professionals. The outsourcing company’s job is to gather the best software developers in the region and leverage their talent to build the best product for you.
Proven Track Record: Always check the references, past clients, and completed projects of a potential IT partner. This information will give you insight into the IT company’s effectiveness, work style, and quality of software products.
Full Range of Services: What you need today may not be what you need tomorrow. The best outsourcing companies specialize in a wide range of areas, allowing for a comprehensive and experienced approach to your project.

Which Parts of the Project Should Be Outsourced?

This is a very important question (and the answers always vary). The beauty of outsourcing IT solutions is that you can literally outsource any part of a project. Some companies outsource the work of a single engineer who can patch a vulnerability in a couple of weeks; others hire a team of system architects to rebuild and optimize IT infrastructure; and some simply outsource the entire project, taking the weight off their shoulders entirely.
But that doesn’t answer the question, does it? If you’re wondering which parts of your project should be outsourced, I’m afraid I can’t give you an exact answer. I don’t know what your project looks like! But I can tell you how the most common types of outsourcing work, and then you’ll get an idea of what services you’ll need before signing anything.
So, without further ado, let’s look at the three main types of IT outsourcing: Delivery Teams, Staff Augmentation, and Project-Based Outsourcing. Read our article on the 9 types of IT projects to outsource.

Delivery Teams

Delivery Teams are perhaps the most common form of IT outsourcing today. Simply put, a delivery team is an autonomous group of engineers that works alongside the client’s in-house staff. If you decide to work with a leading software development company, you’ll likely have a ready-made team within days.
Delivery teams are the ideal choice for companies that want to develop high-quality software but lack the necessary infrastructure or talent. This allows companies to quickly launch their projects and start freeing up internal resources by shifting the workload to development partners.

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Staff Augmentation

If you already have an established IT or software development department within your company, the staff augmentation service might be exactly what you’re looking for. This service provides an "extended team" that works as part of your local team—and I mean exactly that. The extended team will participate in daily stand-ups, report directly to your company’s managers, and do everything that in-house engineers do to succeed.
Staff augmentation is the ideal choice for companies that need to quickly onboard exceptional software engineers. This allows you to immediately fill hard-to-fill or temporary positions, increasing the scalability and efficiency of project development. And, of course, you bypass all the challenges of sourcing, hiring, and retaining talented software engineers.

Project-Based Outsourcing

Project-Based Outsourcing (PBO) is what most people understand as good old software outsourcing. PBO is a full-cycle process where the software service provider takes care of all software development tasks from start to finish. All that’s required from you, the client, is to present what you want and provide feedback along the way.
This model gives you direct access to the resources needed for complex and time-sensitive projects without needing IT staff on your payroll. However, keep in mind that it’s always better to have a clearly defined project scope (or at least a clear idea of what you want to achieve and how you’ll measure it) so the final product turns out as desired. Your software outsourcing partner will also provide guidance on project management, technology stack selection, and any other areas that require client support.

When Should You Outsource an IT Project?

There are many situations where outsourcing becomes the most viable option. Here are some of the most common ones.

When In-House IT Talent Is Scarce: Talented offshore developers are scarce on a global scale. IT companies work with remote methodologies to solve this problem.
When You Need to Fill Specialized Roles: Many projects require either highly specialized technical roles or temporary positions that aren’t attractive to top developers.
When Working on Complex Projects: Complex projects demand a lot of know-how and technical expertise. Without it, you can easily run into difficulties and accumulate downtime.
When You’re on a Tight Deadline: Getting the right results at the right time can be the difference between success and failure. Offshore developers scale your capabilities when needed.
When You Need Expert Support and Consulting: Software outsourcing companies offer consulting and support solutions for existing or ongoing projects that have gone off track.
When Maximum Cost Efficiency Is Required: IT development companies completely eliminate the costs of hiring in-house staff while delivering the same or better benefits.

What Should You Do for Optimal Outsourcing?

As with most things, the better prepared you are before starting your outsourcing journey, the better results you’ll achieve. In most cases, following these five rules will help you achieve seamless and beneficial outsourcing.

Have Clear Goals: As we all know, outsourcing services make it easier to achieve company goals. However, you are the one who sets the goals your outsourcing partner should meet. That’s why having a clear understanding of what you’re aiming for and the outcomes you expect within a certain timeframe is crucial for developing a customized technology solution that fits your needs.
Set Your Priorities: Although your outsourcing partner will help you create a detailed project roadmap, you will be the one providing input on what’s already done and what still needs to be done. So you need to clearly articulate what matters most to your company and your clients. Keep your priorities in mind and participate in development as often as possible.
Paint a Clear Picture: Today, simply pitching an idea is rarely enough to create a successful software solution. You need to describe the experience and paint a clear picture so your software development partner can bring it to life. The clearer the picture, the faster your project will move out of the wireframing and sketching phase.
List All Your Needs: Your company’s technology stack is likely very specific in its requirements. And your project, like any other, will need a team of engineers well-versed in that very technology stack and your industry. Make a list of what you need from your IT partner, and ask about the various service models and technologies they offer to understand how they can fit into your project.
Put Everything in Writing: Service level agreements are the lifeblood of outsourcing contracts. If you want to include accountability in your project (and you should), always put everything in writing. Having proper documentation speeds up any process and makes it more transparent. The outsourcing team will help you choose the best solution to meet your goals on time and on budget.

A Quick Guide to Outsourcing IT Projects in 2024

Outsourcing brings profit to businesses of all sizes and from anywhere in the world. I hope this article has been helpful to you. And remember, if you have further questions, my colleagues at BairesDev are always happy to help. To wrap up this guide, let’s recap the most important aspects of outsourcing IT projects in 2024.

Define the Goal: If you want your project to succeed, you must clearly articulate exactly what you want to achieve and what you will require from your software outsourcing partner. Describing expected outcomes within contractually agreed timelines is a must.
Choose Your Partner Wisely: Not all software outsourcing companies are the same. It’s always best to work with an experienced partner who has a strong track record of developing software similar to what you want. Always check references!
Understand the Different Service Models: Outsourcing is a fully customizable service, so you’ll always get the best deal for what you need. However, understanding the differences between the three main outsourcing models (dedicated teams, staff augmentation, and project-based outsourcing) will help you move forward in the process.
Prioritize Value Over Cost: Gone are the days when outsourcing meant finding the cheapest solution. Now companies from around the world outsource software development to access a global talent pool of skilled developers who can build high-quality products at minimal cost.
Communicate Constantly: Communication is key in any software development project. Make sure you establish communication channels and protocols with your outsourcing provider. Maintaining ongoing feedback throughout the development process is highly beneficial for both sides.
Ask Questions: As a client, you should ask as many questions as necessary to understand exactly what your software outsourcing partner is offering and how it can help you achieve your goals. All your doubts and concerns should be reflected in the service level agreement.
Demand Cybersecurity Assurance: Cybersecurity is more important now than ever. Regardless of what software you want to outsource, make sure your partner can meet all cybersecurity requirements.
Get Everything in Writing: As you know, the software provider contract defines everything related to the outsourcing project. It includes all necessary documents such as the service level agreement, software requirements and specifications, key performance indicators, and, if needed, a non-disclosure agreement.