You might actually be losing money on your outsourced software development team – Here’s why

Frustrated with quality to cost ratio in outsourcing software development

When it comes to saving costs in business operations, outsourcing is often one of the welcomed solutions.

The search for the right outsourcing partner usually results in a wide range of offers in terms of rates – from those extremely cheap, to very expensive. They might even seem similar in their offerings/promises but beware of those “best rates”.

On the other hand, it doesn’t necessarily mean that the highest rates promise the best quality.

So how can you recognize which offer is the most cost-efficient for your company?

 

Dont be trapped by the “best offer” for outsourced developers!

When talking about choosing the best offer for the outsourcing software development, here are some recommendations for you…

Do not choose too low rates even in countries where such rates are common. It usually indicates that those developers are underpaid and overloaded.

Have in mind that good developers cost more everywhere. If service providers want to have high-quality developers on their team, they have to pay for them, which then reflects on the price offered to you.

Select a service provider with competitive rates, because you can expect that this company invests in infrastructure, tools, and training.

There is no guarantee, but rates in a decent price range usually mean that a provider can offer highly-qualified developers with appropriate certifications and fluency in English.

Do not trade the quality of the savings, because in the end – such approach often costs more!

What are reasonable rates for outsourced software development?

From $15 to $250 per hour, everything is possible, depending, of course, on a service provider’s country of origin.

If you are not sure what the fair or regular rates for a certain region or country are, check our previous blog post “How much should you pay for an outsourced developer?”

The general rule for avoiding bad experience is not to go for offers lower than $20 per hour, or for those that indicate lower rates than a common price range in a certain country.

Best practices show that a good ratio between price and quality for software development rates ranges from $25 to $65 per hour. This range can vary somewhat depending on a country, technology niche or experience level.

Anyway, in this price range, it is reasonable to expect that the job will be done by high-qualified professionals, with English fluency, updated tools, and in a good working environment, and that the results will be on the expected level.

In conclusion…

The price is relevant in making the decision, but it shouldn’t be the only or the main decisive point.

CEOs and CFOs always want to reduce costs and increase the profit, which is completely normal. It’s up to CTOs to point to the best option for having a positive ROI with outsourcing software development. This result is not achieved by the lowest, but by the most cost-efficient offer.

 

What are your experiences with cost versus quality for outsourcing developers? Please, leave a comment below.

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