As management of a medium-sized company, you know firsthand how tough it is to scale your team as your business grows.
Recruiting top in-house tech talent and development teams is increasingly difficult in a competitive market, and finding the right people to fit your company’s needs can be frustrating.
Hiring, onboarding, and training new team members is time-consuming, and it often feels like it slows down your growth rather than driving it forward. Partnering with an external software development team could be the efficient solution you’re looking for, offering flexibility and expertise without the added overhead.
In this article, we’ll help guide you through key aspects of choosing an external software partner, such as:
- selecting the right company
- ensuring effective communication
- avoiding common outsourcing mistakes
What defines a medium-sized company?
As you manage the complexities of a medium-sized business, also known as midsize companies, you’re likely juggling between 50 and 500 employees and generating annual revenues up to €50 million.
At this stage, your company is too large to be considered a startup but not big enough to operate like a large corporation. This middle ground comes with unique challenges—especially when it comes to managing and scaling your software development efforts.
What is an external software development partner?
You’ve probably realised that finding and retaining top tech talent in-house is not easy. That’s where the right software development partner comes in. Working with an experienced partner allows you to access specialised skills and expertise without expanding your internal team. Not only does this reduce recruitment headaches, but it also helps you stay agile and scale as needed. A reliable partner will help manage your software projects, giving you access to global talent and controlling costs.
However, managing an external team comes with its own challenges, like ensuring smooth communication and alignment with your business goals. But when done right, outsourcing can help you avoid the long-term commitment of building out your internal team while still providing the expertise and scalability you need.
Challenges faced by medium-sized companies
Midsize companies often encounter unique challenges when it comes to software development. One primary hurdle is finding the right external software development partner.
With many software development companies available, it can take time to identify a partner that aligns with your specific needs and requirements. It’s crucial to conduct thorough research and vet potential partners based on their expertise, technology stack, and client reviews.
Another common challenge is the temptation to prioritise price over all else.
Whilst cost is undoubtedly an important factor, it should not be the sole criterion for selecting a software development partner. Midsize companies must also consider the partner’s expertise, technological capabilities, and reputation.
Choosing a partner based solely on the lowest price can lead to subpar results, including delays, cost overruns, and a final product that fails to meet expectations.
To overcome these challenges, midsize companies should adopt a balanced approach, weighing cost and quality. It’s essential to look beyond the price tag and evaluate the overall value a software development partner can bring to your projects.
Why use an external software development company
Partnering with an external software development company can benefit medium-sized companies. One of the primary advantages is access to specialised expertise and cutting-edge technology.
By collaborating with a software development partner, medium-sized businesses can enhance their development process and significantly improve the quality of their products. These partners bring experience and knowledge, which can be particularly valuable for complex projects requiring specific technical skills.
Increased efficiency and scalability
By outsourcing software development to a specialised company, you can free up your internal resources and focus on core business activities. This increases efficiency, as your team can concentrate on high-priority tasks while the external partner handles software development.
Additionally, external software development partners often have established processes and methodologies that enable them to deliver high-quality software quickly and efficiently. Another significant benefit is scalability and flexibility.
A reliable software development partner can help your company adapt quickly to changing market conditions and customer needs. Whether you need to scale up your development team for a significant project or pivot to a new technology, an external partner can provide the necessary resources without the long-term commitment of hiring full-time staff.
Cost savings
Cost reduction is another compelling reason to consider a software development partnership. By outsourcing software development, medium-sized companies can avoid the expenses associated with recruiting, training, and maintaining in-house development teams, as well as the expenses associated with software development infrastructure and tools.
Additionally, outsourcing can help reduce the costs of maintaining and updating software infrastructure, allowing your company to allocate resources more efficiently. Moreover, external partners often offer flexible pricing models, such as project-based or hourly rates, to help you budget and control costs.
Better resource allocation
Moreover, partnering with a software development company allows medium-sized businesses to focus on their core competencies. By outsourcing the technical aspects of your projects, you can free up internal resources to concentrate on marketing, sales, customer service, and other critical business activities. This strategic focus can lead to your company’s better performance and growth.
Enhanced innovation
External software development partners can bring fresh perspectives and innovative ideas to your project. They often have experience working with various technologies and industries, enabling them to identify improvement opportunities and suggest creative solutions. By leveraging their expertise, you can stay ahead of the competition and deliver cutting-edge software solutions that meet the evolving needs of your customers.
Choosing your external software development partner
That seems simple, right?
You’d just Google “software development partners for mid-sized companies” read some reviews, browse case studies, and there we go—the choice is made, and the award goes to… Hold on a second; it’s not that simple.
Finding the right software development company can be a daunting task, but with a structured approach, you can increase your chances of success.
Here’s a step-by-step guide to help you find a reliable software development partner:
Research and Evaluation
Start by researching potential software development companies. Look for companies that have experience in your industry or with similar projects. Check their websites, social media, and review platforms like Clutch or GoodFirms to get an idea of their expertise, portfolio, and reputation.
Make a list of potential partners and evaluate them based on factors such as:
- Technical expertise and certifications
- Industry experience and knowledge
- Portfolio and case studies
- Client reviews and testimonials
- Pricing models and cost structure
- Communication style and language proficiency
- Company culture and values
Once you have shortlisted a few potential partners, reach out to them to discuss your project requirements and expectations.
Ask questions about their development process, team structure, and communication channels. This will help you gauge their expertise and responsiveness and determine whether they fit your business needs.
Check the cultural alignment
Once you’ve checked the tech stack and portfolio and maybe even gone through some client reviews, there’s still one very important thing to do: check the cultural alignment.
This step is often overlooked, but it makes a difference in practice.
Unfortunately, the fact that a company has had 100 clients or has a pretty good score on Clutch does not translate into the instant success of your cooperation. Software projects can last months or years, depending on your needs, and it’s important that “new people” on your team are a good fit for your company.
It’s not 100% like a recruitment process, but it’s still a bit similar: you want to ensure that the people you hire do their jobs well but are also collaborative, communicate well, and are fun to work with.
Ensuring cultural alignment is crucial for small companies to overcome scaling challenges and manage growth effectively.
Understand the importance of good communication
You’ve likely experienced the consequences of poor communication in projects before.
Effective communication is the backbone of any successful partnership, especially when working with an external team. Establishing clear guidelines from the beginning is essential—frequency of updates, preferred communication channels, and project management practices.
A team that understands your business needs and can clearly convey technical details will be invaluable to your project’s success, making them effective technology partners.
The external team should be able to provide all the technical details, understand the business, and be decent conversationalists.
When thinking about how well your team-to-be handles communication, including channels, regularity, guidelines, and soft skills, you should also check how well they speak the language you will all be speaking.
Teams and clients usually speak English, but speaking skills vary worldwide, and you must understand each other without asking, “What was that again?” a hundred times.
Spot the red flags
You’ve probably seen the warning signs before: vague answers, inconsistent communication, or misalignment on key issues during early discussions.
Trust your instincts.
If you feel uncomfortable when speaking with potential partners, it’s better to pause and reassess before proceeding. Ask critical questions about their approach to project management, quality assurance, and security. These conversations will help you determine whether this is the right long-term partner for your business and ensure successful software development partnerships.
You should never ignore red flags during the talks with your potential partner.
If you disagree on matters that are very important to you, chances are you won’t build a long-lasting partnership with such a company.
Spending time together will help you see whether they’re the people you want to be around. And don’t forget to ask all sorts of questions!
How do they approach project management?
How will they update you on progress?
Can you scale your team up fast if necessary?
These questions include matters related to:
- software quality
- data security
- intellectual property
- time estimates,
- and many others.
Common mistakes of outsourcing
You’re not the first to face the pitfalls of outsourcing, and medium-sized companies certainly won’t be the last.
Many midsized companies fall into the trap of underestimating the importance of communication, cultural alignment, or setting clear expectations. You’ve learned by now that prioritising cost over quality rarely ends well.
If you aim to build a successful software product and sustain scalable growth, finding a reliable partner who values quality over price is essential.
Look out for these traps:
Underestimating communication
Communication plays a huge role during interviews; cooperation is vital in every software development project. It would help if you established guidelines for the regularity of communication, channels, and your expectations. It’s best to be honest and straightforward; you should expect the same from your partner. Communication can make or break a business relationship, so it should not be underestimated.
Ignoring the location
Cultural differences can influence several elements crucial in the development process, like reporting, decision-making, assigning tasks, and the definition of completing a task.
People in different parts of the world (and different time zones) have contrasting work habits and management practices. So, whilst talking with your potential partner, discuss work organization and choose the best project management methodology to suit your needs.
Additionally, no matter the methodology, ensure that you maintain regular and clear communication and that some things are established from the get-go, including goals, milestones, and success criteria.
Imprecise expectations
You may hire an external team at different stages of product development when it’s still just an idea, a work in progress, or a full-blown product waiting for new features. And at every phase, you can fail to express your expectations.
If you want your partner to deliver quality work (and yes, you do), you must provide the team with clear objectives, requirements, detailed descriptions. If you’re not feeling confident about getting your message across to the team, don’t jump into the development phase right away; start with workshops that will help you get to know each other better, find common ground, exchange ideas, and kick off the project with all essential elements checked off the list.
Prioritising price over all else
Price is a crucial factor that should always be considered, but it’s not the most critical. Going for the cheapest option available can easily backfire, even if the company promises wonders at this very low price.
Luckily, our instincts protect us or are at least trying to do so.
If something is “too cheap”, it feels like there’s something wrong with the service. And that’s often the case.
However, hiring a cheap but inexperienced team with no actual client reviews is risky as the costs of delays and mistakes can be higher than what you would pay for the more expensive outsourced team. It’s important to remember that your time is money, too, so balancing price and quality is essential.
Naturally, the right thing to do is look at the price range, but other factors (as described in the points above) should also be considered when selecting the vendor.
Building a thriving software development partnership
By now, you’ve likely realised that finding the right software partner isn’t quick, especially for a medium-sized business. It requires thoughtful consideration, asking the right questions, and taking the time to understand the company’s track record.
Don’t rush into decisions—invest time in verifying credentials, reviewing client reviews, and assessing cultural fit.
Use this opportunity to ask critical questions about their processes, from how they ensure software quality to how they handle communication and project management.
Midsize companies should prepare a list of questions covering the partner’s expertise, technology, reputation, and ability to deliver high-quality software solutions.
- What is your experience with software development projects similar to ours?
- What technology and tools do you use to develop software solutions?
- Can you provide references or case studies of previous projects?
- How do you ensure clear communication and project management?
- What is your approach to testing and quality assurance?
- How do you assure software quality?
- What tools do you use in your development process?
- How do you estimate time?
- Do you actively contribute to IT communities?
These questions and small pieces of advice, such as “check their reviews”, may be obvious, but they’re also easily forgotten in the process. So when you’re about to make an important decision like that, get your checklist ready and have a full picture of the company before you commit.
Why your business needs an external software development partner to thrive
According to Deloitte, cost reduction is the top reason medium-sized businesses choose an external software development partner.
But that’s just the beginning—other major advantages include increased flexibility, faster time to market, enhanced agility, and specialised technical expertise that helps create today’s most successful products.
While cost is an important consideration, it should not be the only factor in decision-making. Mid-sized businesses should also consider the partner’s expertise, technology, reputation, and ability to deliver high-quality software solutions.
By prioritising value over price, midsize companies can ensure they get the best possible software solution for their needs and requirements. This may involve paying a higher upfront cost but can also lead to long-term cost savings and a higher return on investment. Investing in a reliable and experienced software development partner can result in a more robust and scalable product, ultimately benefiting your company’s growth and success.
Even if you’ve had a bad experience with outsourcing, the benefits of development outsourcing far outweigh the risks. Companies have different collaboration methods, so just because one partnership failed doesn’t mean future ones will.
At Helmes, we’ve helped clients recover from failed projects and achieve success. We focus on long-term partnerships that drive growth for both sides.
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