How to Choose a Software Vendor: Key Factors to Consider by ProCoders
13 min.

Choosing a software vendor is no small decision. Partnering with the wrong provider can derail your project’s budget, timeline, and quality.

This ProCoders guide will walk you through the key software vendor selection criteria to evaluate when shortlisting and selecting a partner equipped to drive results for your unique needs.

how to choose a software vendor

In brief, here’s a checklist for selecting a software vendor:

  1. Choose a country to hire talent from
  2. Evaluate the packages the companies have in detail, as you need to understand what’s included. It can be just one month of development with a random coder or that same service but with individual matching, weekly reports, daily 5-minute check-ins, visual deliverables, and more!
  3. Shortlist potential partners – client reviews should help you with that
  4. Look into the communication practices of the outsourcing vendors. Do they have representatives in your country? How willing are account managers to travel to your country for an in-person meeting? Is the CEO available for a conversation? There has to be at least one “Yes!” for you to pick a software vendor from the list.
  5. See if the companies are equipped with the right talent in terms of tech stack
  6. Check partnership dynamic – are you just a client or a partner to them?
  7. Talk to the references to find out more about their software vendor selection process and experience working with the development company of interest
  8. Ask for a short free trial to see if the quality of work is as good as described
  9. Study how they handle replacements, scaling teams, and other processes affecting the process and your budget
  10. Assess the range of specialists the companies have to see if they will cover all your needs (manual and automatic QA, designers, product managers, mobile development, etc.)

And you’re done! To help you understand each step better, we’ll get deeper into each of them below to help you identify the best ways to choose a software vendor.

Before you start, we at ProCoders would like to debunk some myths that may jeopardize your search and subsequent success.

Leave your email to get a list of 5 top myths about choosing a tech partner!

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Check 1: Choose a Country to Hire Outsourced Talent From

When considering an outsourcing provider, one of the first decisions is where to hire talent. Certain regions around the world have become hubs for IT outsourcing due to factors like technical education, infrastructure, government policies, time zones, and culture.

Region & Rates (per month)BenefitsDrawbacks
Central & Eastern Europe
Poland: $2,500.Ukraine: $1,833.Czech Republic: $2,500Sources: Qubit Labs, Joberty
Skilled Workforce: Many countries in this region have a well-educated and technically proficient workforce.English Proficiency: English is often taught at schools as a second language, so many developers are fluent.Cultural Proximity: Cultural similarities with Western Europe, the US, Israel, and Canada can facilitate collaboration and understanding.Time Zone Compatibility: The time zone in this region is generally favorable for businesses in Western Europe, reducing communication delays.Infrastructure Variability: Infrastructure quality can vary between countries, affecting the reliability of IT and communication services.Rates: The rates are slightly higher than in Latin America, Africa, and India.
Latin America
Mexico: $3,377Brazil: $1,600-$2,100Chile: $1,600-$2,100Sources: CodersLink, Talently
Time Zone Compatibility: Latin American countries, particularly those in the Eastern Time Zone, are compatible with the United States, facilitating real-time communication.Proximity to the US: Latin America is geographically close to the United States, allowing for easier travel and on-site visits when necessary.Growth in IT Services: The IT services growth results in a larger pool of skilled software developers.Potentially Poor English Proficiency: Not all developers will be proficient in English, which may cause miscommunication.Cultural Differences: There can be significant differences that may affect collaboration and project management.Limited Specialized Skills: Access to highly specialized skills may be limited, necessitating a more effort-intensive talent search.
$800-$2000Sources: Glassdoor
Large Talent Pool: India has a vast pool of skilled professionals in IT and software implementation.English Proficiency: English is widely spoken and used for business communication, reducing language barriers.Cultural Differences: Work practices and holidays may require careful management to ensure effective collaboration.Infrastructure Challenges: Some areas may face issues with power outages and internet connectivity.Data Security: Compliance with data protection regulations may require additional attention.Underskilled Developers: Often, underskilled developers can be a part of seemingly right software vendors.
Asia (excluding India)
Singapore: $5,950Japan: $7,250South Korea: $4,750Sources: Arc, TokyoDev, Glassdoor
Diverse Talent Pool: Asia boasts a diverse talent pool with expertise in various fields.Language Skills: Depending on the country, language skills can be strong, particularly in English, which is often used for business.Cultural and Language Differences: Cultural and language diversity within Asia can pose communication challenges.Infrastructure Variability: Infrastructure quality can vary significantly between countries in Asia.Legal and Regulatory Complexity: Navigating diverse legal and regulatory frameworks can be complex and may require expert guidance.Major Time Zone Mismatches: For businesses in the US & the UK, Israel, Canada, Sweden, etc., Asian time zones make it difficult or even impossible for teams to work together.
South Africa: $2,200.Nigeria: $636.Sources: Glassdoor, ICTworks
Young Workforce: Many African countries have a youthful population, which can bring fresh perspectives and energy to projects.Infrastructure Challenges: In some countries, infrastructure, including reliable internet connectivity, can be a limitation.Limited Specialized Skills: Access to highly specialized skills may be limited.Cultural and Language Diversity: The continent’s diversity in culture and language may require top-notch management and communication skills.
Western Europe
Germany: $5,166Netherlands: $6,583Sources: Glassdoor, HelloAstra
High-Quality Talent Pool: Western Europe boasts a highly skilled and educated new software development workforce.Cultural Alignment: European countries often share similar cultural values, making it easier to establish effective communication.Proximity and Time Zone: Being in close geographic proximity and within similar time zones can facilitate real-time communication and reduce delays in response times.Data Protection and Privacy: European Union (EU) data protection regulations, such as GDPR (General Data Protection Regulation), provide strong data security and privacy standards.Higher Cost: Labor and operational costs in Western Europe are generally higher than in some other outsourcing destinations.Competition for Talent: Due to the high demand for skilled professionals, there may be competition for the best talent, potentially leading to higher recruitment costs and longer hiring processes.Risk of High Taxes: Tax rates in some Western European countries can be relatively high, impacting the overall cost-effectiveness of outsourcing arrangements.
software vendor selection process

Among these options, Central European vendors often strike the best balance of technical prowess, work culture alignment, language skills, geographic proximity, and even cost. 

ProCoders is headquartered in Portugal and has representatives spanning across the United States, Israel, and several other nations. We offer skilled English-speaking staff with high levels of soft and hard skills. They work from a convenient time zone for both European and North American partners.

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Check 2: Evaluate Outsourcing Packages

How to select a software vendor? Look at what they offer! The services included in a provider’s offering vary widely. Make sure you understand exactly what you’re getting for the price quoted.

Ask specific questions about:

  • Communication protocols – How often will you hear from the account manager? What channels can you use to contact your team? Are there response time Service-Level Agreements (SLAs)?
  • Management practices – How are developers managed day-to-day? Who handles task assignments and talent coordination?
  • Reporting – What types of reports, dashboards, and visibility will you receive into team activity and progress? How often are they provided?
  • Pricing structures – Is pricing fully transparent? What exactly is included? How are rates adjusted for different seniority levels?
  • Value adds – Are there any additional services like recruiting, compliance, workshops, training, etc. bundled into the offering?

A provider who proactively shares specifics has nothing to hide. Transparency upfront avoids frustration down the line.

A crucial factor in outsourcing software development is ensuring that the vendor’s expertise and resources align perfectly with your project’s specific needs and goals. For example, at ProCoders, we have a 30-minute response guarantee during working hours. You can add the developers to your corporate systems and messengers, communicating with them just as you would with your in-house team.

We offer a free workshop before the Discovery Phase to learn more about your product and its tech needs and offer recruitment of additional staff if we don’t have the needed specialists on the bench.

Check 3: Shortlist Potential Providers

Here at ProCoders, we’ve determined a few key factors to analyze in identifying qualified candidates:

Portfolio & Client Lists

Vet the provider’s portfolio of completed work and client lists carefully. Relevant examples similar to your project indicate real-world capabilities you can rely on. 

Ideally, their case studies and clients should include

  • Companies in your industry and vertical
  • Businesses comparable in size and complexity
  • Projects matching your technical specification and requirements
  • Experience with your preferred project methodology

Beware of vendors with sparse portfolios or mismatched references. Limited relevant examples are a red flag when shortlisting.

select a software vendor

Third-Party Reviews

Best practices include looking for objective third-party validation. Review sites like Clutch provide unfiltered client reviews across factors like quality, transparency, value, and results. High ratings affirm the provider delivers on promises.

Check 4: Vet Communication Practices

During the vetting process, assess communication practices thoroughly by asking:

  • Will you have an onsite account manager or centralized point of contact?
  • Can they travel to your office location for in-person meetings?
  • What is the availability and response time for leadership?
  • Are various contact channels like email, chat, phone, and video supported?
  • Do they offer defined SLAs for responsiveness?

Ideally, the tech partner should provide multiple channels for communicating with your team and leadership. Response times should be clearly defined and guaranteed in a service-level agreement.

Set clear communication expectations upfront. And privilege the good vendors who proactively facilitate collaboration through an onsite account manager. The right partner communicates like part of your core team. This is ProCoders philosophy.

Our account managers can fly to your location for a meet-up. Our CEO is always open to communication with potential and existing partners. Our specialists become a part of your in-house team for the duration of the contract and communicate accordingly.

Check 5: Validate Technical Capabilities

Next on our list of software application vendor selection criteria is tech stuff. Even with strong communication, missing technical capabilities will sink your project. Key areas to validate:

  • Breadth/Depth of Talent – Do they maintain full teams covering your technology stack and project needs? Can they provide specialized experts when required?
  • Hiring Process – What is their technical screening and vetting process? How selective are they?
  • Employee Retention – What is their attrition rate? Are developers motivated and committed long-term?
  • Scalability – How quickly can they add resources to your team as needs grow?

Avoid vendors who outsource recruitment themselves or lack experts in your required disciplines. High attrition and contract churn will kill productivity.

Let’s take a look at ProCoders, for example. We have a proprietary 4-stage recruiting process in which only 35% of candidates pass the tests and 8% of them – the interviews to join our team. We test their hard and soft skills, they talk to our tech team leads, managers, and other senior staff.

Many of our employees have worked with ProCoders for 5+ years, with some being a part of the team since the founding of the company in 2015.

We always aim to offer flexible software solutions where your business and its products can grow without limits – we’re ready to accommodate the changes with new staff or reduce your augmented team when some experts are no longer needed. It takes us about 3-14 days to add a new member to your project.

Technical Capabilities

Check 6: Look for the Right Partnership Dynamic

Assess potential partners’:

  • Mindset – Do they employ a vendor or partner attitude? The latter focuses on mutual benefit and your success, which isn’t always the case in the traditional customer-service relationship..
  • Expectations – Do they validate your goals, processes, and working preferences? Mismatched assumptions waste time.
  • Customization – Can they tailor their model to your business needs versus forcing rigid packages?
  • Positioning – Do they focus on problem-solving versus maximizing billable resources?
  • Culture – Does their team culture and values mesh well with yours?

A true partner aims to operate as an integrated extension of your team. Work styles, incentives, and processes all sync up to prioritize shared results. Addressing interpersonal fit makes it far easier to resolve inevitable challenges down the line. 

That is why at ProCoders, we build partnerships. We’re interested in the products we work on and the businesses behind them. 

We fly to other countries to meet you. We also offer a free 1.5-hour workshop to get to know you and your expectations before proceeding with the Discovery Phase, where we study every little aspect of your idea.

ProCoders is a safe place for creativity, growth, and innovation.

Check 7: Speak with References

An important point on our list of software development vendor selection criteria is reaching out to multiple clients of the services provider:

  • More candid perspectives beyond carefully chosen referrals
  • Insight into the provider’s weak spots and drawbacks
  • Details on specifics like project process, culture fit, results, etc.
  • Confirmation skills and strengths are consistent across clients

Questions to ask references:

  • How did the outsourcing relationship get started?
  • Walk me through what the partnership and project process looked like.
  • What value did the provider deliver for your business?
  • Were there any challenges or hiccups along the way? How were they resolved?
  • How satisfied are you with the results achieved overall?
  • Would you recommend the provider for other companies like ours? Why?

Multiple positive reference calls indicate satisfied customers. But watch out for providers reluctant to provide access to clients or who have limited references in your industry.

ProCoders always provide referrals on demand. We have nothing to shy away from, so you can speak directly with the people who have already chosen our services after all the steps we describe here.

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Check 8: Test Quality and Fit

Consider having shortlisted providers complete a mini-project or trial run. This offers a low-risk opportunity to:

  • Assess tech expertise directly through work product
  • Gauge communication and management skills
  • Get developers acquainted with your codebase and systems
  • Confirm culture alignment between teams
  • Clarify any confusion around expectations
  • Identify process improvements to implement later

A well-structured trial run gives both sides a chance to experience the partnership firsthand before signing a long-term contract. You can also request a probationary initial period once the full engagement begins. This provides time to confirm your team works well together before ramping up the engagement.

Including a QA outsourcing guide as part of the trial run can further enhance the understanding of quality standards and testing procedures, ensuring alignment with project goals and quality benchmarks.

At ProCoders, we’re ready to offer a trial and prove you’ve made the right choice of staff augmentation partner by showcasing our skills and process optimization.

Quality and Fit test

Check 9: Protect Your Interests

Once a partnership gets underway, you’ll rely heavily on your provider’s developers. Be sure proper protections are in place for the relationship’s long-term success.

During the vetting process, assess policies for:

  • Replacement – How easily can team members be swapped out if issues emerge down the line? Avoid getting stuck with poor fits.
  • Flexibility – Can the provider accommodate changing tech and business requirements, a sudden increase in new customers, emerging technologies, or shifts in strategy over time?
  • Post-Project Support – Is ongoing assistance available if bugs arise or new requests come up after launch?
  • Contract termination – What conditions are there for unusual situations where you may need to terminate the contract?

You also need visibility into the financial and process stability of the companies. Communicate your concerns and see if the vendor provides transparent information about their state. 

Last but not least, check for ISO certifications to validate operations and security standards. This is especially important if you have a product or business idea in the healthcare and finance industries, where users provide their most sensitive information.

Taking these steps ensures you can exit an engagement smoothly if needed. It also guarantees ongoing enhancements and support after launch. Don’t get locked into contracts lacking protections.

Check 10: Assess In-House Experts Range

Beyond sheer developer headcount, evaluating an outsourcing provider’s in-house experts is telling. Ask specifically about their access to roles like:

  • QA Manual Testers – Do they maintain dedicated testing staff? How rigorously is work vetted before delivery? Ensure that due diligence is conducted to scrutinize their testing practices.
  • QA Automation Engineers – Do they build automated testing into development workflows?
  • Designers – Can they handle design needs like UX, visual design, and branding in-house?
  • Product Managers – Do they embed strategic guidance directly within teams?  Inquire about their knowledge transfer practices to ensure seamless strategic guidance integration within development teams.
  • Mobile Developers – Is talent available for building mobile apps along with web projects?
  • DevOps Engineers – Can they provide technical expertise related to infrastructure, tooling, and cloud environments?

Including offshore developer rates comparison in your evaluation criteria can provide insights into the cost-effectiveness of different providers, especially when considering the balance between quality and budget.

Having niche but critical skills like these handled by internal team members (versus subcontractors) demonstrates a commitment to end-to-end delivery. Some vendors will claim abilities that aren’t staffed in-house once projects begin. Be skeptical of teams dependent on third-party freelancers to fill gaps.

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