How to choose an offshore software development company: a buyer's checklist

Hiring an offshore software development company can give you senior engineers at a fraction of onshore rates. It can also leave you with a late, half-finished product and code you can't get back. Which one you get is decided almost entirely before you sign: in how you compare companies, read their proposals and set up the contract. This is the checklist we'd use if we were the buyer, written by a company that is one.

Decide what you're actually buying

"IT outsourcing" covers very different arrangements. Get clear on which one you need before you compare anyone, because the right partner for one is often wrong for another.

• A fixed-scope project. You know what the first release has to do. You want a price, a date and a working product at the end.
• Extra capacity for your team. You already have engineers and a roadmap. You want more senior people working inside your repositories and rituals.
• A product team you don't have. There's no one technical in-house. You need people who will run the product, not just write code to a ticket.

The third is the hardest to buy well, because you're trusting the partner to make decisions you can't easily check. That's where seniority and an accountable lead matter most.

Compare the delivery models, not just the rates

Hourly rates are the easiest thing to compare and the least useful. What matters is who carries the risk when something goes wrong.

A low rate with all the risk on your side is often the most expensive option once you count your own management time and the rework. We've written about how our hybrid model works if you want to see one in detail.

How to read a proposal

A good proposal shows the company understood your problem. A weak one is a template with your name in it. Look for these.

Questions before the price

A company that quotes a fixed price after one call, without asking about users, integrations, data or what "done" means, is guessing. Expect the guess to come back later as change requests.

Named people

The proposal should say who will work on your product and how senior they are. "A team of five experts" tells you nothing. Ask to meet the lead before you sign.

A first release, not everything at once

Strong partners cut the scope down to the smallest release that proves the product works, then plan the rest. A proposal that promises your whole wish list in one go is optimistic about scope, budget or both.

What happens weekly

You should be able to read exactly what you'll see each week: a written update, a demo and access to the repository. If it isn't written down, it usually doesn't happen.

Assumptions in plain sight

Every estimate rests on assumptions. Good proposals list them, so you can see what would move the price. If there are none, they're hidden.

Red flags

• No access to the code until the final payment. The repository should be in your account from the first commit.
• A price far below everyone else's. Someone has misread the scope, or plans to staff it with junior engineers.
• No overlap with your working hours. Questions wait a day, and a one-day delay turns into a one-week delay quickly.
• Vague answers about review and testing. Every change should be tested and reviewed by someone other than its author before it merges.
• The salesperson can't answer technical questions and won't bring someone who can. You'll be managing through that same gap for the whole project.
• A long minimum contract before you've seen any work.

Start small before you commit

Don't start with a six-month contract. Start with a short, paid piece of work that produces something you can judge: a scoping exercise, a technical plan, or a small feature in your own codebase. Two or three weeks is enough to see how a team asks questions, communicates, estimates and writes code.

That's why our own engagements start with a fixed-price Sprint of two to three weeks, A$5k–15k. You leave with an agreed scope, a prototype or technical plan, and a fixed quote for the next step, and you're under no obligation to take it.

Put these in the contract

1. IP assignment. The custom code and deliverables are yours, and third-party licences are listed.
2. Code in your accounts. Repositories, cloud accounts and domains are owned by you, with the partner given access.
3. Governing law. Know which country's courts settle a dispute. A contract under your own law is far easier to enforce.
4. Confidentiality. An NDA signed before you share anything sensitive.
5. Data and access. Who can reach production data, from where, and how credentials are stored and removed.
6. Exit terms. How you pause, reduce the team or move the work in-house, and what handover documentation you get.

What it costs

Rates vary widely by country, seniority and model, so compare total cost to a working release, not hourly rates. We've published real budget ranges in our custom software development cost guide. If you're looking at Bangladesh specifically, we've also covered what to check before outsourcing there.

FAQ

Is offshore software development worth it?

For work that can be specified, reviewed and demoed each week, usually yes. It's a weaker fit when the work needs someone on site, or constant live conversation through your whole day.

How do I protect my IP when outsourcing?

Sign an NDA first, make sure the contract assigns the IP in custom work to you, and keep the repositories in your own accounts from day one. Those three together leave very little to argue about.

Fixed price or a dedicated team?

Fixed price when the scope can be written down and agreed, which is usually true for a first release. A dedicated team when the product is live and priorities change week to week.

How do I manage a team in another time zone?

Agree a shared window every working day, a weekly priority list, a written update and a demo. One accountable lead on the partner's side makes this far simpler.

How quickly can an offshore team start?

A scoping Sprint can usually start within a couple of weeks of a first call. Building a full team takes longer, which is another reason to start small.

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Comparing offshore development companies? Book a scoping call and ask us every question on this page. You'll leave with a view on scope, team and cost, whether or not you work with us. You can also see our work and how we work.