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Buyer's guide

How to choose a software outsourcing partner: a due diligence checklist

A good partner is found by testing it, not by reading its website. What to ask, what proof to see, how to meet the people who will build your system, and a short paid pilot before you commit.

For companies shortlisting outsourcing partners8 min read

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What you are choosing

You are choosing people, a way of working and commercial terms. A logo, a country or a long list of clients tells you little about your own project. The same checks apply whether the partner is onshore, nearshore or offshore.

People
The lead and the engineers who will build your system, and how long they stay.
A way of working
How a task moves from request to release, how problems are raised and how you see progress.
Terms
The price, who owns the code, how changes are handled and how either side can leave.

What to check

Use the table as the outline of every conversation with a partner on your shortlist, and as your vendor selection criteria: the same list for every partner, so that the comparison is fair.

What to check in an outsourcing partner
Area What to look for Ask to see
Relevant work Systems like yours in size, kind and difficulty. A demonstration of working software, and what the partner did on it.
The team Named people with the skills you need, and some stability. Who will build yours, their experience and how long they have worked together.
Engineering practice Code review, automated tests, version control and a repeatable way to release. How a task moves from request to release, with a recent example.
Communication Plain answers, written follow-up and bad news told early. How they answered your questions while they were selling to you.
Security Controls on who can see your code and your data. Their rules on devices, access, secrets and incidents.
Stability A company that will be there next year. How long it has existed, how many people it has and how it is registered.
Fit A partner for whom your project matters. Whether yours would be a large or a small client for them.

Ask for proof, not claims

Anyone can say they are good. The question is what they can show.

  • Try software they built, and not a slide deck about it.
  • Call two references of a similar size, and ask what went wrong and how it was handled.
  • Read reviews on directories and on the clients' own channels, knowing that reviews can be selected.
  • Check that the company is registered, and that the people you meet are employees and not names borrowed for the sale.
  • Ask for a sample plan, report or estimate from a past project, with the client's details removed.

A directory is a place to start

Directories and rankings help you find names. They are not a test: a profile is written by the company, and a ranking can follow who pays or who asks for reviews. Check what you find.

Meet the people who will build it

The sales team is not the team.

  • Ask to meet the lead and, if you can, the engineers.
  • Ask how long each has been with the company and what happens if one leaves.
  • Ask how many projects each works on at the same time.
  • Ask who answers when the lead is away.
  • Ask who writes the documents and the tickets, and read an example of each.

Security, data and access

You are letting people into your code and, often, into your customers' data.

  • Where will your code and data be kept, and who can reach them from where?
  • Do staff work on company devices, and how are those secured?
  • What does each person sign: confidentiality, and an assignment of rights?
  • Which subcontractors may touch your work, and will you be told?
  • How are incidents handled, and how fast are you told?
  • Will you hold the repository and the cloud accounts yourself?

Run a paid pilot

A small, real piece of work tells you more than any proposal.

  1. Choose a small piece with a clear end

    One screen, one integration or one report: something that can be finished and checked.

  2. Agree what good looks like beforehand

    Write down how it will be judged: it works, it is tested, it is documented and it was delivered when promised.

  3. Pay for it

    A paid pilot is taken seriously by both sides, and you own what it produces.

  4. Judge the process as well as the code

    Notice how questions were asked, how problems were reported and how you were told about delays.

  5. Decide whether to go on

    If you do, agree the larger scope and the terms. If you do not, you have lost a small amount and learned a lot.

Compare the terms

Do this last, once the work and the people have convinced you.

  • The pricing model, and what the price assumes. The guide to the cost of outsourcing shows how to compare.
  • Who owns what, and when the rights pass. The contract checklist lists the points.
  • How changes are priced and agreed.
  • How payment follows delivery.
  • How either side ends the relationship, and what you are handed.

Red flags

Any one of these is a reason to ask more questions.

  • A proposal that arrives at once, before anyone has asked you a question.
  • You may not meet the team before you sign.
  • The partner will not show working software.
  • Every answer is yes.
  • References that cannot be reached, or that are all from one source.
  • A price far below the rest.
  • The partner will hold your code or your accounts.

Beware the best-looking proposal

A polished proposal shows that the partner can write proposals. Compare what each partner showed you working, and how it behaved when you asked something difficult.

Keep reading

Common questions

How do I choose a software outsourcing company?

Write a brief, send it to three to five companies, and judge them on working software they can show, the people who will build yours, how they communicate, their security and their terms. Then run a small paid pilot before you commit to a larger contract.

What questions should I ask a software outsourcing company?

Ask for similar work you can try, who will build yours and how long they have worked together, how a task moves from request to release, how your code and data are protected, who owns what, how changes are priced and how either side can leave.

How do I check an outsourcing company's reputation?

Try its software, call two references of a similar size, read reviews on directories and on the clients' own channels, and check that the company is registered. Remember that reviews and rankings can be selected, so give them less weight than what you see working.

What are the red flags when choosing an outsourcing partner?

A proposal before any questions, no chance to meet the team, no working software to show, an answer of yes to everything, references you cannot reach, a price far below the rest, and a partner that wants to hold your code or accounts.

Should I choose the cheapest software outsourcing company?

Not on price alone. A low price can mean thinner teams, missing tests, rework or surprises later. Compare like with like: the same scope, the same assumptions, the same seniority, and what each quote leaves out.

What is a paid pilot?

A paid pilot is a small, real piece of work with a clear end, such as one screen or one integration, done before a larger commitment. You judge the code, the communication and the way problems are handled, and you own what it produces.

How many outsourcing companies should I shortlist?

Three to five is enough to compare without drowning in calls. With fewer than three you have little to compare, and with more than five you spend your time and theirs on conversations that will not change the decision.

Looking for a partner?

Ask us the questions in this guide. We will answer them in writing, and you can judge us by the answers.

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