How to choose the right custom software development company

11 min read
July 14, 2023

Developing custom software is a challenging undertaking.

From choosing the right tech stack to ensuring the project stays within budget, any mistakes you make along the way can steer you toward failure.

But one of the biggest mistakes you can make is hiring the wrong software team.

It won’t matter how great your app idea is if the team you hire doesn’t know how to turn it into a reality.

Even the most innovative tools will not be able to make up for a team’s lack of skills and experience.

That’s why you must take the time and effort to optimize your hiring process. And this article will help you do that.

How to choose a custom software development company

Because the software company you hire can make or break your project, we’ve laid out the steps you should take on the path to choose the right one.

Define your requirements first

Before you begin hiring, you first need to be clear with your requirements.

In other words – why do you need to hire a team in the first place?

The first consideration is whether you should get an extended or dedicated team.

In the extended team model, you hire developers to boost your in-house team.

This is a viable option if you already have an existing team and want to scale it or require specific skills your current developers don’t have.

in house vs. extended team

Source: DECODE

On the other hand, in the dedicated team model, you outsource development to an external development team.

They work as if they’re in-house, except they’re technically considered a third-party provider.

This is the right choice for you if you’re starting from scratch and don’t have any developers on hand.

Even if you have an in-house team, you may want to consider this option if you want to work on a new project but your developers already have their hands full working on a different project.

Define your selection criteria

Once you’ve determined your requirements, the next step is to define your selection criteria. This will set the standard for evaluating if a team is the perfect fit for your needs.

Here are the factors you should keep in mind:

factors when choosing custom software development company

Source: DECODE

The most important are arguably expertise and domain knowledge, which tell you if the company has the right skillset your project needs.

After all, the best fintech developer in the world won’t be of much help to you if you want to create a health app.

Experience is also crucial. A company might say they’re skilled in app development. However, if they’ve only been doing it for a year, they could potentially struggle.

So, to achieve the best results, it’s best to look for an experienced company.

Review the company’s portfolio

After you have your selection criteria, it’s time to evaluate potential companies.

And we believe the best way to do that is to check out their portfolio and case studies.

Their previous work reveals more objective insights about the company you’re taking into consideration.

You can evaluate their skills, experience, problem-solving, work ethic, and professionalism. Best of all, you can get a good idea of how they’ll handle your project if you pick them.

Decode screenshot

Source: DECODE

To summarize, reviewing an company’s portfolio lets you see if its capabilities match your project. This helps you hire the right team.

But when looking at an company’s portfolio, a question might pop up – how do you know this is all true?

After all, the company might embellish details just to make themselves look good to potential clients.

That’s where their reviews come in.

Check the company’s reviews

Going over the company’s reviews is a key step.

It allows you to get an idea of what an company is truly like from the perspective of its past clients. Their feedback paints a more accurate picture of the company.

You can usually read reviews on the company’s own website. These can be useful, but chances are, the company only includes the most favorable reviews.

Reading negative reviews, however, is just as insightful, if not more so. For that, you should head over to third-party sites like Clutch.

Decode reviews

Source: Clutch

Companies generally have no control over what their past clients will say on these sites. Thus, reviews there are unbiased and much more reliable.

Look into the company’s pricing

The last step you need to take is looking into the company’s pricing. You should determine if how they price projects fits your requirements and budget.

Companies usually price their services in two ways – fixed price or time and materials.

Comparison of Fixed Price to Time and Material 1

Source: iTech India

Fixed pricing is as it sounds – the company determines a set cost at the beginning of the project.

This is great for simpler projects with well-defined requirements that are unlikely to change.

On the other hand, the time and materials model only charges for work that the company puts in.

This is a fairer and more flexible option, which fits complex projects that could change midway.

The bottom line is that one pricing scheme is no better than the other. It all depends on your project, preference, and the company’s flexibility.

Questions to ask a custom software development company

Asking the right questions is invaluable for hiring the right software team. If you want to get critical insights, we strongly advise asking these five questions.

Did you work on similar projects in the past?

If the company has worked on and successfully completed projects similar to yours in the past, then your project will likely be in good hands.

But it’s not enough for you to ask them about their past projects.

As discussed above, it’s best if they walk you through the details of at least one project – what it was about, what problem it was solving, and how the team worked on it.

Also, it is a good sign if the company can give you references from the clients that hired them for those projects.

Getting references allows you to contact those past clients yourself to ask them about their experiences directly. This can help you confirm if what the company claims is indeed true.

What services do you provide?

Not all software development companies deliver the same services. That’s why asking this question is crucial to ensure their offerings match your particular needs.

Custom Applications

Source: Software Testing Help

For example, not all companies build mobile apps. If you require one, you first need to establish whether the company can develop one for you.

Also, realize that you might need services beyond coding. Product discovery, UI design, quality assurance, and maintenance are offerings that you should consider.

Some niches like fintech, for example, may need specialized elements like blockchain, cybersecurity, and financial analysis.

That’s why it’s best to work with a dedicated custom software development company like DECODE, where we tailor-fit our services to your project.

What development methodology do you use?

Methodology is how the development team will create your custom software.

This has a significant impact on the development process and the quality of the end product, which makes this a very important question.

Generally, different methodologies cater to specific use cases.

For example, the traditional Waterfall method (where development progresses linearly) is best for simpler projects with well-defined requirements.

But for many projects, Agile is the better methodology.

Sprints 2

Source: Consilia

Agile splits development into individual sprints that can be repeated as necessary.

This iterative process enables the team to optimize and adapt the software in short development cycles, producing a more refined result.

Whatever methodology the company prefers, the important thing is that it matches your own workflow and preference.

What technologies do you use?

Different software requires different tech stacks, which is especially true for custom software solutions.

An obvious example is that the programming language of a web app (like HTML) can’t be used or is inefficient for mobile apps.

Thus, asking about the tools and technologies the company is proficient with is important.

Tech Stack vs Software Stack 2

Source: GetApp

It’s a good sign if the company has expertise in various tools and technologies. This shows that they’re flexible and that can adapt to the requirements of the custom software solution.

If you’re not tech-savvy and aren’t overly familiar with technology, an alternate question to ask is if the tech stack they use is ideal for your project requirements.

Who will own the intellectual property rights?

Intellectual property (IP) is always a sensitive subject among clients and their outsourced teams. But despite that, this is a question you should ask as early as possible.

Chances are, most companies will say that you (the client) will own the rights to the custom software. This industry norm is backed by copyright law in most countries.

However, it’s easy for a rogue developer to steal your code to create their own app based on yours or sell it to your competitor.

That’s why it’s a green flag if the company insists on including an IP ownership clause in your contract.

Doing this shows the company respects you and is serious about ensuring your IP rights.

Plus, it puts everything into writing, giving you the legal option to sue if the company or one of its developers decides to break the IP agreement.

What characteristics should you look for?

You shouldn’t evaluate your potential software development team on their technical skills alone.

Soft skills like communication are just as crucial. Because without them, even the most skilled developers will be a nightmare to work with.

The top 10 soft skills

Source: Enterra Solutions

Open communication is arguably the most critical characteristic.

It’s the fundamental skill required for teamwork. And without collaboration, you and your team can’t coordinate your efforts to develop successful custom software.

Another is confidentiality. Chances are that the company encounter sensitive data and confidential trade secrets during development.

They should be trustworthy enough not to leak that information to third parties.

To be safe, though, it’s still best to cover your working relationship with a non-disclosure agreement. More details about it can be found here.

The final one is full transparency. The development team should be open about what they’re doing, especially if they encounter problems.

Covering up a problem will prevent you and the team from solving it effectively, so transparency is crucial.

What red flags should you watch out for?

Let’s look at a few red flags you should be wary of during the hiring process.

First is a vague portfolio. Good companies usually like to showcase their achievements in their portfolio and case studies because it presents them in an ideal light.

So if a potential company has very few details in its portfolio, it could indicate that it wasn’t a good experience for the client.

The next red flag are generic and negative reviews. Generic reviews with few details are a red flag because there’s a chance they might be fabricated.

Negative reviews reflect poorly on the company, especially they reveal the company’s incompetence or poor work ethic.

Finally, be wary of companies that give you estimates too good to be true. Some companies like to bid low to win a project, even if it’s unrealistic with the time and effort required.

They could end up underhandedly charging you for more work or deliver a subpar product. Either way, it’s not good.

Need a custom software development company?

The fact is that hiring the right company takes a lot of planning, time, and effort. And there’s still no guarantee that you’ll land the perfect candidate.

But keep at it! Because once you find the right partner, you can create even the most challenging custom software projects together.

If you’re looking for an experienced custom software development company and are interested in what DECODE can do for you, schedule a free consultation with us, and let’s talk!

Written by

Marko Strizic

Co-founder and CEO

Marko started DECODE with co-founders Peter and Mario, and a decade later, leads the company as CEO. His role is now almost entirely centred around business strategy, though his extensive background in software engineering makes sure he sees the future of the company from every angle. A graduate of the University of Zagreb’s Faculty of Electrical Engineering and Computing, he’s fascinated by the architecture of mobile apps and reactive programming, and a strong believer in life-long learning. Always ready for action. Or an impromptu skiing trip.

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