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It can be a brutal process for anyone who wants to hire software development company. The main aim of hiring a software development company is to find the perfect team for the right project and that also at a right time.

However, people often chose the wrong person in order to save a little money. It is very important to keep in mind that you must never compromise quality with money.

The software development company landscape

The type of software development companies are a perfect fit for certain projects but that depends on a number of factors and this is also having a great impact on the quality and delivery of the project. The different buckets where the software development company can fill into are given below-

1. onshore software development company

If you are hiring any onshore software development company then that means the development of your project will be completed in the country where you are living in.

They are basically known because they are able to deliver projects with high quality along with more hands-on customer service. Clients are responsible for assigning a dedicated account manager, project manager and they are having the ability to meet face to face with the team.

There are different sizes of these onshore software development companies. The rates of these onshore software development companies vary from one region to another. Price expectations are between $115 to $200 for a single hour.  The benefits of using this service are given below-

  • Communication- this is the major benefit as it affects the quality of the software that you are going to receive. This is very much important if the client is involved in building any technology that is related to the core of the business functions. In order to improve the development workflow communication is known to be a key factor.
  • In-person meeting- a local software development company is known to be the best person when you wish to meet in person.

If you are deciding to choose onshore software development for your project then also there are two options available and they are local and non-local.

Local companies are basically those companies that are available within commutable driving distance whereas non-locals are those companies that require flights to have a face-to-face conversation.

2. Offshore Software Development Company

Offshore software Development Company means that the development will be completed by the resources outside your residing country. The cost of these services is very much less when compared to that of the onshore one.

However, these services require detailed requirements of the project along with project management. Low code quality is offered by many companies but this is not true for all companies.

There are many good resources but the numbers of bad resources are more and so it is difficult to find the best one for your project. The rates of these services vary from region to region. However, the estimated price is somewhat around $15 to $30 per hour. The benefits of using these services are given below-

  • Cost- cost is known to be one of the major factors for any business owner. So hiring these services is the best way of saving cost. They are 10 to 20 percent cheaper when compared to the price of the onshore development companies. There is some technology strength in certain regions and so a great talent can be found in developing countries.
  • Project starting timeline- small projects can be turned around because of the presence of a larger available workforce. More people can be kept on the bench. The main reason behind this is the cheaper labor cost with a greater volume of work. So they can start projects much faster when compared to that of the local company.

3. Nearshore Software Development Company

Nearshore Software Development Company is considered to be one of the best compromises for offshore services. This means the development is located in any of the neighboring countries with the same timezone.

It is a bit costlier when compared to that of the offshore but is cheaper when all the other costs are involved. In the case of the staff augmentation model, this considered being one of the best options in order to meet a larger project timeline. The estimated cost is around $30 to #75 per hour. The major benefits of these services are-

  • Recently developed talent- there has been the emergence of many tech centers all around the world which is responsible for giving birth to many new talents. If the right partner is chosen then this can be a better option for you to complete your project.
  • Cost- the cost is much less when compared to that of hiring locals. The price range is between offshore and onshore services.
  • Integrate into the process- the timezone is the same and so they can integrate into your process without any disturbance in communication.

4. Hybrid software Development Company

There are many firms that have taken the approach of hybrid that is responsible for offering onshore project management in combination with the reduced cost of offshore/nearshore development. T

he product or project manager with the hybrid model is present in the states and the team of developers is offshore or nearshore. The main reason for seeking the help of this service are given below-

  • Efficiency in cost- This model is the most common one which is used by many start-ups for bootstrapping MVP. The rate is less than $100 per hour. This rate is cheaper and here there is no need of assigning the role of the project manager.
  • Project communication- local project management is there in hybrid services and so there is a decrease in the communication gap between the teams. The style of communication is something to look for in case of the hybrid services.


5. Hiring software developers

The major alternative is not to hire any software Development Company and instead you can hire W-9 contractors or W-2 employees. There are also benefits for hiring this service and they are-

  • Iteration speed- the in-house team of development is basically hired to create a development cycle that is pretty much faster than iterates the overtime. The team is able to change things on the fly and can move in a quick manner when compared to agencies.
  • Subject matter expertise- significant time can be saved when a person has involved in hiring an in-house team in case of making any future changes. But to do this in a good manner a good development team is very essential.

However, the cost of this service is very high and is estimated to be around $ 100,000 to $125,000.

Framing and scoping the project

There are many software development companies in the USA but choosing the best one can be a difficult task.  It is paramount to scope a project when you are involved with the task of selecting a software development company for your project.

This section will be very much helpful to define the development life cycle that will help you in giving you the starting point present in the process.

Modern software development lifecycle

The development of modern mobile apps and websites are done in a shorter time when compared to toe the traditional enterprise and desktop software.

  1. Traditional SDLC – this is basically having more strong principles and processes when compared to that of the modern development process of software. The traditional way is to define a product in a complete manner at the first and then design and develop the product in a direct manner from the specifications.
  2. The modern SDLC – a similar process is followed in this modern SDLC but a room is left in a quick manner to the pivot based on the priorities that are changing. Many people are there who might call this agile but it tends to be a more truncated waterfall especially when people are involved in working with a software development company. Customized application software is hard to build but if proper steps are followed it can be built by using the modern SDLC. All you need to do is hire best developer that suits your budget. If you hire an unknown and poor quality developer then the project can be a disaster and you will also waste your money.


Budget backward vs feature forward

The three important variables in the case of any software project are the budget, scope, and timeline. From this, it can be said that there are two primary types of project that is responsible for defining the lifecycle of a project.

Most projects normally meet between two approaches but the most important of all is the knowledge of knowing the identity of the variable and also the highest priority of order so that the rest of the equation can be filled.

  • Budget/ timeline backward- these projects are having maximum budgets or hard delivery time. The project team basically works backward to see what part of the project can be finished within the allotted budget and time. These projects basically make sacrifices for features and quality in order to fit the budget and timeline.
  • Feature forward- these projects are focused on work forwards and scope to determine a budget and timeline based on the features and scope desired. It’s acceptable to spend more amount for launching the desired scope and the team is also willing to receive or pay more. Software companies in the USA pay attention to this step.

Going from feature list to final product

It is very important to know your position when you are involved in contacting any software development company. This is very important to choose the right partner for your project.

There are many custom software development companies that promise to deliver the perfect product but failed to do so. Some of the important steps are given below-

  1. Software strategy- discovery phase is known to be one of the best phases to start. There are many factors on which the time of completing the discovery phase depends.
  2. Prioritized feature list- it is very important to create a prioritized list after completing the software strategy step. It is very important to write-out the features that you wish to have on the software according to the order of importance. It is also important to pay attention to the details that pertain to the users. After listing all the desired features it is important to list down the feature priorities.
  3. Designs with technical requirements- the software design must travel from low to high fidelity after determining the feature list. The prioritized features are changed to general architecture by the user experience designer.
  4. Technical requirements- the high fidelity or low fidelity are normally built by outlining the product’s details from a technical specification.
  5. Launch- after doing all the hard work it is important to launch one of the releases.
  6. Feature improvements- after the release is completed the team must pay attention to the next set of features. This may start in step 2 or can also start in step 1.

Researching and contacting a software development company

Top software development companies in the USA or any other country always follow the software development lifecycle so as to get the perfect output in order to satisfy the needs of their client.

It is very important for a person to understand what they must be looking for when they are hiring a software development company. If they are involved in signing a contract then that clearly means that they are buying something from the company and the person believes what they are selling. It is very essential to do research work if you are hiring a firm for the first time.

Creating an initial list of companies for software development

People can be a better researcher when compared to Google. So it is very important to take feedback from the people who have already hired any company for their software development project.

It is possible that from those people you can easily get a perfect review about the company which you are thinking to hire for your project. You can also send an email or even write a post on Linkedin.

Many IT development companies will respond to the post of LinkedIn. It is very essential to have ideas about competitive companies that are having great products and are able to reach out to their people.

There is a list of vendors for many people and they can share happily. This is basically an act of goodwill and a good intro can make them look good.

Now the next thing which you can do is to Google. The main aim will be to complete a list of 15 to 20 companies for your project. Then it is very essential to do a quick scan of the websites of the 20 companies. The factor that you must look at when you are browsing the website of the company is given below-

  • Work- it is important to look for the depth, quality, and size of the project and not just the name of the brands.
  • Quality- it is very essential to notice whether the companies are paying attention to their own website.
  • Experience- it is very essential to see the experience as this can help in getting your job done soon. This is because the developers will have problem-solving skills and can overcome any problems because of previous experience. The best software development company will always hire the best developers with proper experience in the field of software development.
  • Social- it is essential to see a strong company culture of perfect work.
  • Blog- it is very essential to see whether the company is able to provide you with quality content.

After doing all the research work it is very important to shortlist the company and this can be done depending on the following factors-

  • Looking at the leading indicator of success
  • Did the company actually completed the work or they just did the case study
  • Looking for red flags that is to look for the complaints and lawsuits
  • Contacting each software development company

Selecting negotiating and contracting with a software development company

It is very much essential that you prepare a tough schedule so that you can easily complete your process of decision-making within a month. It is very important for you to sign a contract with a custom software development firm. It is very important to know about some of the details-

1. NDA (confidential agreements)

The main aim with NDA is to make sure that the contract is mutual and there is no involvement of any third person. In simple words, privacy is maintained. This is very much straightforward.

2. MSA (Mater service agreement)

MSA means master governing contract. These are basically clauses related to relationships. The places of negotiations with a software firm are-

  • Payment terms- this is known to be one of the most powerful items for negotiation. There are many firms that operate with Net-30 terms. Discounts can be negotiated. Cash in the door can be a good bargaining chip as the software development firm is known to be a cash-flow business.
  • Non-compete- in order to protect your software you must put a non-compete in place.
  • Non-solicitation- this clause is a standard one. This is the best way that gives you the ability to hire a product team in the coming days.
  • Intellectual property- it is very essential to make sure that you are owning all of the IP. Everything that has been created should be under the consideration of the work product and you must be the owner of everything t the end. It is very essential to be careful with plugins and modules that partners are including in the product. Moreover, it is also essential to know who is owning what part of the software.
  • Portfolio use- if your company is large in size and you are hiring any small software development firm then this can be one of the best ways of negotiating the price by offering the company to let them use the software of yours as their portfolio. There is nothing proprietary if you are not using it for negotiations.

3. SOW (Statement of Work)

Few different types of SOW are there. There are two main types and they are given below-

  • Fixed Bid- it is basically a certain set of deliverables that is available for a certain price. The price is basically fixed and there is no chance for fluctuation with the project without any kind f change order. It is very much difficult for a software product development company to generate a fixed bid for the project over $50,000 or a length of 3 months. When a fixed bid is used in the case of a larger approach, then there is a requirement of division into smaller halves, defined increment over the project’s course.
  • Time materials- this is generally the less defined set of deliverables that are being developed depending on the time spent on developing the project. This is considered to be one of the most standard ways of contracting with software development companies. In simple words, it can be said that you are responsible for buying a team in order to receive the targeted set of deliverables. This can be very scary and so you must make a wise decision to hire dedicated developers.


Enterprise product development is never an easy task. But the hardest of all is to choose the best partner that will help you in developing your project and will also guide you through the whole process.

A good company will always know the best possible solution for your business. If a proper company is not hired then it is possible that you will stay behind your competitors.

The above points are the ultimate guide for hiring a software development company that will help you to stay ahead in this competitive world.