Things You Should Know Before Hiring a Software Company

by Dave Erickson
21 mins read
  1. Business
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In today's rapidly evolving digital landscape, businesses across the spectrum—from startups and SMBs to large enterprises—are increasingly reliant on sophisticated software solutions to stay competitive. Whether the software is developed internally, or outsourced to a software development company, the software development need is ever present in today’s business environment.

Once you understand the Pros and Cons of Hiring a Software Development Company and have decided that trying to build and manage an in-house team is not what you want to do to develop your software; then it is time to plan out your choosing and hiring a Software Development Company.

Two Types Of Development Companies

There are many Software Development companies and agencies that once can choose from, but they essentially fall into 2 categories: Consulting Development and Technical Development

Consulting Development companies:

They have a broad and deep experience in dealing with many of the business challenges facing companies, and are able to work with companies who have decided to outsource development, but don’t quite understand or have the ability to define exactly what the software product will exactly look like. These clients may have a high-level understanding of what they need, but don’t know how to address all the various business and development challenges and need help in developing the software concept, roadmap and Statement of Work (SOW).

Technical Development companies:

These companies are focused on technical development, and expect their clients to come to them with a fully developed understanding of what they want from the software, and have a flushed out SOW, detailed feature set list, testing criteria and UX wireframes. Usually, if you have a technical CTO, maybe even some in-house IT staff or developers, then a Technical Development company will be cost effective and a good option.

Understanding whether your company aligns more closely with the needs addressed by Consulting Development companies or Technical Development firms is a crucial step in ensuring the success of your software project. This alignment not only affects the initial stages of your project but also its execution, delivery, and the overall outcome. Here’s why discerning your company type is fundamental and how it impacts your choice of development partner:

1. Efficient Utilization of Resources

If your company lacks a clear and detailed vision of the software product, including its technical specifications, target market, and integration with existing systems, partnering with a Consulting Development company can save you from potential resource wastage. These firms can guide you through defining your project, ensuring that your time, budget, and efforts are directed efficiently from the outset. They are also able to put together product development documentation and roadmap that will best fit their developers and ensure an efficient and successful product development.

Conversely, if you have a well-defined project scope, detailed technical requirements, and perhaps even preliminary designs, a technical development company can hit the ground running. Their expertise in turning detailed requirements into software products means your resources are spent on development and not on consultancy fees to define your project.

2. Alignment with Project Goals and Expectations

Choosing a development partner that aligns with your company's current state and needs ensures that your project goals and expectations are met.

Consulting Development Firms help you articulate your vision into a tangible product roadmap, often bringing valuable insights into market needs and potential challenges. This alignment can lead to the discovery of new opportunities or pivots in your project direction that better serve your end goals.

Technical Development Companies excel in environments where the project scope is clear and detailed. Their focus on execution means they are better suited for projects where time-to-market or adherence to specified technologies is critical.

3. Risk Mitigation

Selecting a mismatched development partner can lead to several risks, including:

Project Delays:

Without the right guidance (in the case of insufficient project definition) or technical skills (in the case of detailed and complex projects), your project may face significant delays.

Cost Overruns:

Misalignment between your needs and the chosen development company’s strengths can lead to unexpected consultancy fees, revisions, and extended timelines.

Product-Market Misfit:

Without the strategic insight provided by consulting development firms, companies might end up with a product that doesn’t fully meet market needs or user expectations.

Technical Shortfalls:

On the other hand, a technical development firm might execute your specified requirements flawlessly but might not offer the strategic insight needed to pivot or adapt the project based on evolving market or business insights.

A Little Blurry

Identifying the nature of your company's requirements is not just about ensuring that you choose the right development partner; it’s about guaranteeing that your project is set up for success from day one. By understanding whether you need the strategic guidance and project definition offered by consulting development companies or the focused technical execution provided by technical development firms, you can align your project’s needs with the strengths of your development partner.

This alignment is crucial for meeting your project timelines, budget, and ultimate business objectives, ensuring that the final product not only meets but exceeds expectations. Making an informed choice can thus be the difference between a successful software project and one that struggles to meet its goals.

The line between a Consulting Development company and a Technical Development company can be a little blurry, since a Technical Development company may offer some limited consulting such as SOW development/refinement or testing requirements.

Also, A Consulting Development company can usually work with an SOW or other product documentation that you have, and develop the product from that, and maybe work with you to develop some of the other documentation needed for development.

How To Search For A Development Company

When embarking on the journey to select a development company for your software project, the strategies you employ should be tailored to the specific type of company you're seeking - Consulting Development or Technical Development. Each requires a unique approach to ensure that you partner with a firm that aligns with your project's needs and goals.

Finding a Consulting Development Company

The search for a Consulting Development Company is nuanced, given their role in shaping the project from its conception. Here are key strategies:

1. Leverage Relationships and Referrals:

Personal and professional networks are invaluable. Reach out to peers or contacts within your industry who have undertaken similar projects. A referral not only provides a sense of trust but also gives you firsthand insight into a consulting company’s approach and effectiveness. These referrals can be from developers who worked for an agency, past clients or management who worked with various agencies. If you know someone who had a good experience with an agency, that is something that can save you a lot of time and effort in finding a consulting development agency you can trust.

2. Assess Business and Product Knowledge:

Look for companies with experience in your sector, surrounding and related sectors or with the types of products similar to the type you're aiming to develop. This prior knowledge can be a significant asset in identifying market needs, potential pitfalls, and opportunities for innovation.

3. Business Mechanics:

It is important if the management of the development agency has a lot of business experience, and a deep understanding of business mechanics and how various businesses transact business. Most software is about solving business problems, and a consulting development agency should be able to ensure the software development will solve the business challenges that a business faces now and in the future.

4. Evaluate Their Strategic Approach:

During discussions, assess their ability to understand your high-level vision and translate it into actionable plans. A good consulting development company should ask probing questions and propose strategic insights, demonstrating their capacity to add value beyond coding.

5. Check for Experience and References:

Beyond their portfolio, ask for references or case studies. These can provide a clearer picture of their process, how they’ve navigated challenges, and their success in delivering projects that meet their clients' strategic objectives.

6. Look and Listen:

Check the development companies blogs and podcasts (if they have one). From their writing and articles, you should be able to get a good sense if they have relevant business and development expertise. If they have a podcast, are their guest interesting, knowledgeable and experienced, and do they show they are familiar with the various subjects?

Finding a Technical Development Company

Selecting a Technical Development Company focuses more on their execution capabilities and technical prowess. Consider these strategies:

1. Browse Development Company Directories:

Websites like Clutch, GoodFirms, and IT Firms feature rankings, reviews, and detailed information on thousands of development companies. Reviews from past clients can give you insights into a company’s technical capabilities, reliability, and project management skills.

2. Prioritize Technical Expertise:

Ensure the company has a broad and deep technical skill set relevant to your project. They should have experience with the technologies you’re intending to use or those that are best suited for your product.

3. Competitive Pricing:

While cost shouldn’t be the only factor, it’s important to compare pricing among companies. Be cautious of pricing that seems too good to be true; it often is. Competitive pricing, combined with a strong track record, is key.

4. Request Detailed Proposals:

A proposal should outline their understanding of your project, the technologies they plan to use, the project timeline, and a detailed pricing breakdown. This will give you a sense of their technical understanding and how they manage projects.

General Tips for Both Consulting and Technical Searches

Choosing the right development partner is a pivotal decision for your project’s success. By tailoring your search strategy to the type of company you need, you’ll be better positioned to find a partner that can bring your vision to life effectively and efficiently. The following tips are important whether you are searching for a Consulting Development or Technical Development company to develop your software project.

Frame Your Project

To hire a software development company, you should frame your project. They’ll have a clear view of your expectations and come up with actionable plans based on your vision. Have someone from your IT department help you with the scoping process. This will make communication between you and the development company easier. If you don’t have any internal technical resources for a software project and will rely on the Consulting Development company to handle all aspects of the development project, at least familiarize yourself with the Systems Development Life Cycle so that you will be able to frame your project with a basic development process.

Find an Expert in a Particular Area

Although you may feel tempted to hire a generalist agency, it’s better to refrain from hiring those that claim to do everything. An all-knowing company is good because it’s versatile, flexible, and a multitasker. However, they’re unable to resolve high-level issues. Most of them have outdated skills and usually focus on the big picture, neglecting small details.

Communication Fit

The importance of communication style in choosing a development company cannot be overstated, as it underpins every aspect of project collaboration, from clarity on technical requirements to timely resolution of issues. The tools a company uses for communication (such as Slack, Microsoft Teams, or email), their proficiency in your preferred language, and their ability to work across time zones are crucial factors to consider. These elements affect the fluidity of information exchange, the speed of decision-making, and ultimately, the success of your project. To assess compatibility, inquire about their standard communication practices, request a trial period of collaboration using their tools, and schedule meetings across different times to gauge responsiveness. Additionally, evaluate their language skills in initial interactions and consider the clarity of their written and spoken communication. This due diligence ensures you partner with a development company that aligns with your communication expectations, facilitating a smoother, more efficient project flow.

Seek Someone Who Understands Your View

Many software development companies are experts in their field but lack empathy for understanding the clients’ perspectives. You need to find an agency that understands the logic behind your business. This way, they’ll know the best path and strategies to execute your project.

Due Diligence

Whether you’re leaning towards a consulting or technical development company, thorough vetting is essential. Check their credentials, review their portfolio, and speak with their previous clients if possible.

Cultural Alignment

The company’s culture should align with yours, especially if you’re looking for a long-term partnership. Their values, work ethic, and approach to problem-solving should complement your own. When working with international remote developers, if the work and life cultures are very different than miss understandings can occur more often than you might think. Example: the cultural difference between an American company and European developers may not be as big as that of an American company and that of say Asian developers. It is not that one is better or worse than the other, but culturally there might be more room for miss-understanding based on cultural norms and roots between the various different cultures.

Don’t Focus on The Cheapest Options.

Cheaper does not always mean better. During your hunt, you’re most likely going to find incredibly cheap agencies that promise to do everything you wish for your project. They may have the skills and talent but lack the tools needed to successfully build your application. That’s why you shouldn’t prioritize cheaper costs over other relevant factors like reputation, talent, tools, and overall quality.

The Agreement Details Matter

The agreements between you and the development agency are critical for a successful collaboration, serving to protect the interests of all parties involved. It's essential that many of the terms, especially those concerning non-disclosure, intellectual property (IP) rights, employee confidentiality, and the scope of work, are mutual to ensure fair protection and obligations. A mutual non-disclosure agreement (NDA) safeguards both parties' sensitive information, while clauses on IP rights should clearly define the ownership of developed software and related materials. Client agreements must comprehensively cover confidentiality, the protection of both parties' IP, and the responsibilities of each side, including any subcontractors or third parties involved. Exhibits detailing the deliverables, Statement of Work (SOW), pricing, and terms should be attached to ensure clarity and prevent misunderstandings. These agreement details lay the groundwork for a transparent, secure, and productive relationship, mitigating risks and setting clear expectations from the outset.


Choosing to partner with a software development agency offers numerous advantages, including access to specialized expertise, cost efficiency, and accelerated development timelines. However, the success of this partnership heavily depends on selecting the right agency, one that not only has the technical capabilities but also aligns with the company’s values and goals. As such, CTOs, CIOs, and project managers must approach the selection process with a strategic mindset, thoroughly evaluating potential partners on various fronts to ensure a fruitful collaboration.

Consulting Development firms provide strategic guidance and assist in defining project requirements, while Technical Development companies focus on executing well-defined projects efficiently. By aligning with the appropriate type of development partner, businesses can optimize resource utilization, ensure alignment with project goals, and mitigate risks. Making an informed choice based on your company's needs and the strengths of potential partners is crucial for project success, ultimately determining whether the final product meets or exceeds expectations.

When selecting a development company for your software project, the approach should be customized based on whether you're looking for a Consulting Development or Technical Development company, each requiring a distinct search strategy. For Consulting Development Companies, emphasis is placed on leveraging referrals, assessing the company's business and sector expertise, understanding their strategic approach, and evaluating their experience and references. Meanwhile, finding a Technical Development Company focuses on their technical expertise and execution capabilities, with methods including browsing company directories, prioritizing technical skill sets, considering pricing, and requesting detailed proposals.

Regardless of the type, general tips such as framing your project, ensuring a communication fit, seeking a partner who understands your vision, performing due diligence, considering cultural alignment, avoiding the cheapest options, and paying attention to agreement details are critical. These strategies aim to align project needs with the strengths of the development partner, ensuring project success.

ScreamingBox is a Consulting Development company with more than a decade of experience in helping companies solve their business challenges cutting edge software development. Please contact us for more information

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