Locastic, Agile, Feb 23, 20236 min read

How to evaluate a software development agency before hiring

When looking to hire a software development agency for your project, it’s crucial to consider several important factors before choosing a business partner. The IT industry has a high project failure rate, making it even more important to select the right agency to avoid risks and ensure a successful long-term partnership. In this blog post, we’ll cover several vital things you can check before making a final decision to lower risks and increase the chances of a successful partnership.

Portfolio Overview & Prior Experience

An agency’s portfolio will give you an idea of the kind of projects they have worked on, their size, and their overall level of expertise. When searching for a software development agency, prioritize those with experience in projects similar to yours and a proven track record of delivering top-notch software. This will give you an idea of how well they understand the requirements and complexities of your project. If applicable, try finding reviews for these projects on platforms such as Clutch to look for timeframes, budget ranges, team size, and other factors.

TIP: Ask the agency for previous client contacts that can provide recommendations and feedback about their work. Besides getting an honest assessment of the agency’s work, you can figure out a lot by their choice of contacts.

Team Structure and Experience

Inquire about their usual team size and structure on a project of similar size and requirements to yours. It’s important to know who will be working on your project as well as their level of experience. If you’re not familiar with the usual structure of a software development team, ask for more information – an agency with experience should be able to provide you with a clear description of each role without using technical jargon.

TIP: Ask for the CVs of the team members who will be working on your project. Ensure they have the necessary skills and expertise to deliver your software solution.

Tools and Technologies Overview

Look into the tools and technologies (stack) they use. Even though you might not have enough technical expertise to understand the pros and cons of a particular technology, there are certain points that are universal:

– Is there a large and active community of users for the technology?
– Can it handle increased workload and growth?
– Is it easily customizable and upgradable?
– Is the technology or tool actively maintained by the provider?
– Are there hidden costs in subscriptions and licenses?

TIP: It is wise to choose technology and tools with a strong community and many experts. You might want to form your own team in the future or hire another agency – there’s a danger of getting tied down to a specific niche (or outdated) stack where it’s very difficult to find new talent. 

Services They Offer

Pretty much all agencies offer a variety of services such as development, testing, design, consulting, etc. Make sure they offer all the services you need to complete your project or they have good recommendations and connections with partner companies to help you find the experts you need.

TIP: Software development agencies might not offer digital marketing, photography, SEO, or copywriting services, but considering the aforementioned are quite often needed for software projects, they practically need to have a network of experts already to ensure things are developed properly and on time.

Explanation of Their Development Process

Ask for an explanation of their development process, including the project phases and the methodology they follow. This will give you an idea of how they approach software development and how they manage projects.

TIP: Regardless of the methodology a software development agency claims to prefer (Scrum, Kanban, Scrumban, XP, etc.), ensure that it is iterative and involves your active participation and feedback. Regular meetings, reviews, and consistent delivery of functional software should be expected at a steady pace.

Support and Maintenance

Arrange ongoing support and maintenance for after the project is complete. Don’t just assume warranty periods or team availability, get an offer for a monthly fund of maintenance hours. This will help ensure the software continues functioning properly and any bugs are fixed promptly. 

TIP: Even though no decent agency would turn you down if something needs to be fixed or upgraded, in the case where you don’t have arranged maintenance hours, you will most likely need to wait for resources to become available, and the price will most likely be higher.

Communication Methods

Communication is the key to the success of any software project. Look for an agency that has excellent communication skills, including the ability to listen, ask questions, and keep you informed throughout the development process.

They aren’t hired to just write code, they are hired to solve your business problems, which means they need to be able to quickly learn your specific domain knowledge and deeply understand issues or opportunities in your field of work. All of this requires great communication skills.

TIP: Considering the unpredictability of software development, they should actively look for regular communication. Try to have at least one person on your side that will be available for calls, face-to-face meetings, chats and other types of fast communication almost daily. Emails are slow, and you don’t want a whole team of developers sitting on their hands while waiting for your answer.

Prices and Payment Models

Ask for prices and payment models and make sure you understand the costs involved and how the agency charges for their services. There’s a number of models available:

– Time & Materials – you get an invoice each month based on the number of working hours spent by the team working on your project and their cost rates

– Man-Days (basically an outsourced team) – the whole team is full-time dedicated to your project without precisely tracking their working hours, and the invoice is based on the number of working days and team-size on a monthly basis. This is usually done for long-term projects. Think of it as temporarily hiring a full software development team.

– Fixed estimate – the agency gives an upfront estimate for the cost of the whole project

TIP: Fixed estimates are generally frowned upon in the IT industry, as they basically go against the very basics of agile software development. You can expect extremely high buffers on the final price as software development projects are infamous for their unpredictability.

Ownership Arrangements

Make sure you understand the ownership arrangements of the software. Who will own the code and intellectual property rights of the software after the project is done? As you might expect, software agencies are hired contractors and in most cases shouldn’t keep ownership of the code they’ve developed for you, but don’t leave it to chance. Make sure it’s clearly stated in your contract, as it is in the case of Locastic.

TIP: Over the years, we had a few clients that had to fight in court to get a hold of designs, repositories, and even content developed by a prior contractor. They did win in the end but lost a lot of time and money to do it because it wasn’t legally written down.

Multiple Agencies

Compare multiple software development agencies before making a decision. Look at factors such as prices, team structure, communication, feedback, and more to determine which agency best fits your needs. If you want to develop a custom software solution, getting a proposal back with a fixed price and without questions should be a red flag.

TIP: Ask for multiple offers by different software development companies – you can learn a lot about their way of working based on their approach to your request. They should ask questions, try to arrange discovery workshops, send branded and professional looking proposals, etc. And, of course, cost-wise, if something sounds too good to be true, it most likely is.

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Hiring a software development agency is a crucial decision for your business as it can determine the success of your software project. It’s important to choose an agency that will deliver high-quality software within budget and on time. I hope this post will help you find an experienced agency that will help transform your ideas into great-looking and working software.

FINAL TIP: If you’re completely out of depth with software and technologies, a lot of agencies will offer consulting services, and they can help you prepare & understand the necessary documentation and find an ideal partner for your project.

That’s all, let me know what you think!

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