How to Choose The Right Software Development Partner?
In this blog post we provide an 7-step approach to help you find your perfect software development partner.
A significant blocker stopping ambitious FinTech companies from reaching their goals is an inability to scale resources quickly and effectively. Competition for talent is at an all-time high. The shortage of developers in particular is one of the most common bottlenecks for global market players. In fact, Fortune 500 leaders view ‘talent shortage’ as the number one threat to their business. This is according to a Fortune 500 CEO survey 2022. This figure was further backed up in 2023 when the 2023 ManpowerGroup Talent Shortage Study found that 75% of employers worldwide were struggling to find the talent they need. The desire, ambition and innovation is there. But organizations are being held back because they can’t build the team and software capabilities that are required to drive growth.
Competition is even more intense amongst funded start-ups. According to Robert Half’s Demand for Tech Talent report, more than half (54%) of start-up businesses who have secured private equity or venture capital funding in the past 12 months invested capital in tech recruitment. It’s no surprise then that the number of companies outsourcing software development projects was projected to grow by 70% in 2024.
Software Development as a Service
An engagement model that many scaling companies are turning to in 2024 is software development as a service or SDaaS.
SDaaS (Software Development as a Service) is a service offering where a company hires a third-party provider or software development partner to provide software development services on an ongoing basis.
As opposed to a typical custom software development build, which is usually carried out on a one-off basis, SDaaS is an ongoing, long to medium term partnership. With Software Development as a Service, it wouldn’t be out of the ordinary for a company to work with its software development partner on a semi-permanent basis, scaling up and down as needed. A company may have its own in-house team that works alongside the SDaaS team or it may work exclusively with its SDaaS provider.
With SDaaS, or whatever software development engagement model you choose, the success of the project will depend on the quality of the software development partner and the relationship fit.
There are many different types of software development companies. You need to find one that fits with your company and your needs. An ill-suited partnership can lead to further frustration, breakdowns in communication, loss of revenue, and, ultimately, an organization not meeting its objectives.
To help you make this important decision we’ve compiled a simple, 7-step process for choosing your perfect fit.
7 Steps to Choosing a Software Development Partner
1. Develop Clarity Around What You’re Building And Your Needs
Before you consider how to choose the right software development partner, it is imperative that you understand what you want and assess your motives.
At Keeper Solutions, we have a simple set of questions that you need to ask yourself before deciding if engaging in a software development partnership is right for you.
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- Are you comfortable with the prospect of working with a third-party team? Do you trust the process and believe that it will be suitable for your company? Is your organization compatible? If not, it might be time to reassess your options.
- Does your executive leadership team support software development outsourcing as a high-priority strategy? If you do not have buy-in from key stakeholders, it will be very difficult for an outsourcing partnership to work, whether it be nearshore or otherwise.
- Do you have an operational team that is aligned to an third-party software development partnership? It is important that in-house product owners, project managers, software development managers, and business analysts are fully invested.
- Do you have buy-in from the in-house team? Outsourcing your software development projects is an alternative strategy to building an in-house team but it can also be complementary. However, it’s vital that members of your in-house team feel empowered and not under threat.
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2. Create a Shortlist of Suitable Software Development Partners
Once you have decided if a software development partnership is right for you, it is time to create a list of candidates.
Do your research. Look at sites such as Clutch.co, Angel.co and GoodFirms.co for a curated list of potential partners but also talk to friends, clients and industry colleagues who have engaged with software partners in the past.
Look for social proof, reviews and ratings online before finalizing your shortlist.
3. Do Your Research
After you’ve created your initial list of potential partners, it is time to carry out some more in-depth research.
Below are some of the things to look out for:
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- Check the company’s portfolio/case studies and testimonials. If you have a mutual connection with someone they’ve worked with in the past, it would be a good idea to reach out and have a frank discussion about their values and working habits. While there are dozens of metrics to consider, a company’s track record should be upweighted.
- Check the tools, technologies and working methodologies they use to see if they align with your own. If possible, see what tools they use to communicate with clients.
- Consider the geographic location and services they offer.
- See if the company is embracing AI as a high priority. If your software partner has not fully embraced the power of AI, you may be building software that is destined to become obsolete.
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4. Find Evidence of Relevant Industry/Domain Expertise
When looking through case studies, testimonials and customer base, look for companies whose needs and objectives match your own. Industry experience is incredibly important and can significantly improve the integration process.
A service provider that understands the complexities of your tech stack as well as the regulatory and compliance requirements of your marketplace, holds a significant advantage over other partners. Talk to the company directly and find out about their domain expertise. Get a list of relevant companies they’ve worked with in the past and talk to them.
5. Don’t Overlook the Importance of Cultural Alignment
One success factor that is so often overlooked but is critically important is cultural alignment. No matter the team, whether it be a fully in-house, remote or hybrid, can only succeed when they work together and there is an alignment of values, behaviors, objectives and working practices.
Our advice is to take a long look at the culture of any organization you are considering working with. It can be difficult to fully understand a company’s culture before working with them. However, talking to senior management and finding out more about how they operate can provide some insight. Below are some questions to consider:
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- Do you share the same values?
- How do you each deal with adversity?
- What are your collective work habits and expectations?
- What is the company’s vision? Does it align with your own?
- What kind of working environment do senior management try to create?
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More on the importance of cultural alignment can be found here.
6. Consider Advisory and Consultancy Capacity
When selecting a software development partner, it’s important to consider their ability to provide support and guidance on software development projects.
Higher-value providers can offer expert advice on engagement-models (rightsourcing), product design/UX, technical architecture, test strategy & automation, and industry compliance requirements. Seeking partners that provide high-level advisory support facilitates rapid knowledge transfer in the early stages. This will reduce the risk in the engagement and foster mutual trust early on.
7. Choose the Best Fit and Focus on Building Long-term Relationships
Once you have completed all the steps, it is time to choose a software development partner. How you make your pick is really up to you. Many companies use scoring matrices in their decision-making process, which can be effective. It’s difficult to provide guidance on the best method for choosing a partner. However, our one piece of advice is to think long-term.
Working with an external team is not like engaging with a recruitment company or head-hunter. It shouldn’t be looked at as a one-off transaction but a strategic partnership.
When chosen correctly, your software development partner should feel like an extension of your own team and a part of your future success. With any strategic partnership, it’s vital to find the right fit and think long-term.
