The decision to develop software in-house or to outsource this development to a qualified third-party company is an important one for any business. But once the decision to partner with a software development company, the questions continue. How to find the best partner for your needs and budget? What should your specifications and requirements look like in order to ensure the most effective use of time and money? 

“Choosing the custom software development company best suited to your project or company needs comes down to a few relatively simple things to consider.” 

Decide what type of company you want to hire

There are basically four types of custom software companies that you can choose from, each with benefits and challenges that need to be considered:

An onshore company is located in the same country or even the same city as you are.

• Benefits: common language means stronger communication and a common time zone allows for clear deliverables, convenient meeting times, and more hands-on customer service approach.
• Challenges: higher cost than offshore options.
• Best fit: if quality is the key driver of the development and if you are focused on building a relationship that will extend to future projects.
• You better have: the budget to make an onshore collaboration viable.

An offshore company is located outside your city and country, often separated by one or more time zones.

• Benefits: cost (often much lower) and speed (often much faster) when compared to onshore options.
• Challenges: time and language differences can be challenging and must always factor into such basic business pieces as agreeing to deadlines and communication processes.
• Best fit: if your project is very well defined (as in crystal clear) and you are on a tight budget this might be the best option to consider.
• You better have: an exceptional in-house project manager to handle the details and deadlines.

A nearshore company is not located in your country but is in a nearby country that usually shares your time zone.

• Benefits: usually have a deep pool of talent available at a lower cost than an onshore option but not as inexpensive as offshore. Being nearby also allows for the convenience of scheduling meetings and updates.
• Challenges: most aspects of project management will end up in-house in order to ensure a smooth integration of the custom software into your company.
• Best fit: for a project that could be handled in-house with just a few additional skill sets added or just cannot be handled due to production schedules and timing.
• You better have: in-house specialists in key areas (project management, technical writers, UX/UI design) to backstop the project. 

A hybrid company blends these approaches, most often having a management team located near you but with a build/development team somewhere else in the world.

• Benefits: in most cases, communication and cost are benefits given that management is local while the development benefits from an offshore costing model.
• Challenges: depending on where the development team is in the world, project management issues are always a possibility with this option.
• Best fit: for startup companies and bootstrap projects.
• You better have: a strong communication culture in place already.

In the end, your goal is to choose the custom development team that suits your project needs, fits your budget, and is able to deliver a high-quality product on time. But being clear on what your options are before opening the search is always the best approach.