How to Choose the Right IT Outsourcing Partner

Like any startup or small business, you’re always looking for ways to stretch your budget.

But beware.

When it comes to developing an MVP or a mobile application, cheap software IT outsourcing can lead to expensive headaches.

Don’t fall for the all-in-one trap — service providers promise all the bells and whistles in one package at rock-bottom prices without understanding your project’s complexities. What starts as a promising deal can quickly turn into a nightmare if you pick the wrong IT outsourcing company.

Not sure what to watch out for? This post covers everything you need to know about how to choose the right outsourcing partner that won’t let you down.

IT outsourcing: A quick definition

IT development outsourcing means delegating some or all your IT tasks to an external service provider.

For a deeper dive, read our IT Outsourcing Guide, which talks about the benefits of IT outsourcing, types of outsourced IT services, and IT outsourcing costs in different parts of the world.

Nearshore vs. offshore vs. onshore outsourcing

Should you outsource domestically or go international? Different models offer unique benefits and challenges that can influence your project’s cost, timeline, and risk.

Let’s take a look:

Why should you outsource IT services?

Soaring infrastructure costs and the persistent tech skills shortage make software development, and other IT projects much harder to execute.

For many companies, outsourcing is the more flexible and affordable way to tap world-class resources and bring their products to life.

Here are just a few of the great benefits outsourcing offers:

• Expertise on demand: Quickly fill knowledge gaps without hiring new employees.
• Cost savings: No need to pay recruitment or training costs.
• Scalability: Scale your operations on demand, paying only for what you need.
• Focus on what counts: Your internal team gets to focus on driving growth and revenue.

How to choose the right software development outsourcing partner

Deciding to outsource is just the start. The next question is this: How do you choose an outsourcing vendor? 

Here’s a practical guide to follow:

1. Define your project’s scope.

Clarify the essential functionalities you need your software to have and your “desired outcomes.” Having a clear roadmap puts you on the same page as your outsourced team right from the start and sets the stage for success.

 2. Determine your budget. 

Be realistic. Plan for all costs and add a buffer for scope creep and unexpected expenses — everything from new ideas that might arise during development, technical issues that require extra time to fix, adjustments to the requirements based on feedback, and even maintenance support needed after launch.

3. Interview outsourcing providers.

Schedule a meeting with prospective firms to get to know how they work and who they are. Here are some questions to ask:

• How do you find, train, and hire your developers? This lets you assess their talent pool’s quality.
  
• What software methodology do your developers use? Choose a team that is comfortable with both Agile and Waterfall development.
   
• Where are your developers located? Don’t assume that all their developers work on-site in their headquarters. Clarify this because it will affect how you collaborate.
   
• How involved will I need to be throughout the development process? Determine how much input and oversight you’ll need to provide.
  
• How much visibility will I have in the project? Ask them about how you can track milestones and progress. You should always know how your project is progressing.
   
• How do you handle testing and quality assurance? Verify that the firm has a strong QA team that can quickly identify UI, UX, performance, security, compatibility, accessibility, and localization issues.
   
• Do you specialize in certain project types or industries? Look for a contractor that has successfully worked on similar projects to reduce the learning curve.
  
• How do you communicate with your clients? Ask about their preferred communication channels (email, phone, video conferencing, etc.) and project management tools.
  
• Do you have testimonials from previous clients? Check their case studies to gauge their reliability.

4. Consider cultural and language barriers

Don’t underestimate the pressure of managing different work styles and linguistic nuances. Providers who have worked with many international clients will usually navigate these challenges better.

5. Choose a partner that matches your needs

After all this, pick a company that understands your project and is compatible with your work style. The right provider is one that you can trust to deliver quality on time, every time.

Outsourcing firm red flags

Spotting red flags before signing a contract can save you from the stress and expense of a failed partnership. 

Here’s what to watch out for:

1. Limited online presence

If a contractor barely exists online or on social media, think twice. Check them out on reputable review sites like Clutch.co, DesignRush, and others, to verify that they have real customers who value their services.

2. Bad communication

Are they slow to respond? Does the conversation feel off? Your initial interactions will reveal a lot about their professionalism.

3. Rushing the vetting process

Beware of vendors who pressure you to make quick decisions. A reputable partner will give you the time you need to evaluate their compatibility with your project.

4. Unrealistic promises

Don’t fall for over-the-top promises from firms that can’t support their claims with data or realistic strategies. Look for a company that fully grasps your project’s complexities and sets practical, achievable targets. 

Building an MVP? Then, you need a team that can challenge your assumptions and isn’t afraid to say “no” to ideas that are not viable from a technical standpoint.

5. Can’t back up their previous work with examples or data 

Demand transparency. If they hesitate to share their portfolio and performance data, take that as a warning. Choose a partner that openly discusses their successes and limitations.

6. Only offer one solution for all clients

Outsourcing firms that pitch cookie-cutter solutions are probably not taking the time to understand their clients’ specific needs and challenges.

A rigid, one-size-fits-all approach often can’t adapt to changing requirements or scale efficiently. It might even expose you to security risks.

7. Super low prices

While rock-bottom prices can be tempting, those extremely low rates usually come with hidden costs.

From compromised quality and lack of resources to hidden extra fees and limited flexibility, those tiny price tags can hide some serious dangers. Always consider the true value behind the price and make sure the provider can deliver on their promises without cutting corners.

Why do IT companies outsource to India?

India has always been a global business hub — it has traded in spices and textiles long before the digital age. Thanks to supportive government policies and a large talent pool, the country became a customer support and data entry powerhouse in the late 1990s and evolved into a top IT outsourcing destination by the 2010s. 

Pros and Cons of IT Outsourcing to India

India is still a common choice for businesses looking to outsource their software development. Here’s why:

Despite the benefits, choosing an Indian outsourcing provider can potentially come with some serious pitfalls, including:

Low costs IT labor rates can be as low as $30 per hour, far below North America’s $60 to $250 range. Tax incentives and government support further enhance India’s cost-effectiveness. Vast talent pool India offers a large and skilled workforce of developers, engineers, and designers, providing expertise that may be hard to find locally. Diverse services As a global leader in IT and BPO services, India offers a wide range of outsourcing options, enabling businesses to consolidate multiple functions with one provider. High English proficiency With 129 million English speakers, India holds 9% of the global English-speaking population, making communication easier.

Cultural differences Indian and Western approaches to communication, deadlines, and problem-solving can clash. Western clients may expect directness, while Indian partners often prioritize relationship-building and consensus. Time zone differences India’s time zone is 12.5 hours ahead of California and 4.5 hours ahead of London, complicating real-time collaboration. Security concerns Some Indian firms still lag in meeting global security and intellectual property protection standards, posing risks to sensitive data. Management issues Poor management and rigid adherence to CMM can lead to misunderstandings, quality issues, or missed deadlines. Quality concernsWhile many firms meet industry standards, rapid growth in the sector can sometimes lead to subpar work.

Instead, try Latin America for outsourced IT services

Latin America is a nearshoring powerhouse and a prime hub for tech talent, thanks to hefty EdTech investments that crank out at least 605,000 new software engineers each year. And when it comes to world-class IT outsourcing services, Brazil is one of the best options. 

Here’s why this LATAM IT giant is a top choice:

1. Cultural affinity

Brazil and the broader Latin American region share many cultural and professional values with North America and Western Europe.

Brazilian IT teams — known for their straightforward communication and results-driven approach — are well-versed in Western project management methodologies. Their deep understanding of the North American market also helps them create digital products that resonate with your audience.

2. Massive investment in nurturing tech talent

With around 500,000 software developers, Brazil has one of Latin America’s biggest tech talent pools. This is no coincidence. Top Brazilian universities continuously supply the industry with fresh, skilled talent. This tech-savvy country also pumped $49.8 billion in cutting-edge fields such as AI, IoT, and edge computing in 2023.

3. More affordable than on-shoring

Depending on the specific role, hiring in Brazil can cut your software development costs by 30% to 60% compared to US rates.

4. Similar time zones

One of the greatest advantages of nearshoring in Brazil is the minimal time difference. Your nearshore and onshore teams can operate in sync without the inconvenience of odd-hour communications.

Work with Cheesecake Labs, an experienced IT outsourcing company

Choosing the right IT outsourcing partner is a crucial decision that can make or break your project’s success.

Carefully evaluating potential providers and considering their expertise, communication practices, and cultural fit can help you avoid costly delays and ensure your project is in capable hands. 

Remember, the goal is to find a partner who not only understands your vision but also has the skills and dedication to bring it to life.

You need a partner with enough industry knowledge to guide you along the way and deliver top-quality results on time and within budget.

From fintech to e-commerce, we’ve built solutions that drive growth and disrupt industries — and we’re not afraid to show our work.

We’ve helped:

• Reshape financial interactions with Fig Loans and Cresol Pay
• Revamp the investment experience with EQI Investimentos
• Make stock trading more accessible with QuiverQuant
• Build voice search capabilities for MercadoLibre
• Transform mobile shopping for top brands with Tapcart
• Pioneer wearable heated insoles with Thaw
• Launch Europe’s first helicopter booking platform with FindHeli
• Pioneer security camera technology with Camio

Check out our portfolio to see more of our work in action.

And if you’re interested in partnering with our expert team, let’s chat — we’d love to help you bring your project to life.