How to Choose the Best Software Development Company

The most important thing to start with is getting an idea of what you actually need for your project and who could help you with it. Think of your needs, expectations, limitations, and end goal. Outline everything - this will help you decide on which type of software development company will fit you.

Choose a software development partner carefully, doing thorough research and comparisons needed. I suggest you to check my other article on how to choose the best development company if you want to learn what to look for.

Country of origin and location

It is important to look at custom software development companies from the perspective of distance from their client and the country they are based in. It's also essential to factor in not just cost and quality but also political stability, regulatory compliance (e.g., GDPR, CCPA), and ease of business interactions. For instance, regions with stable governments and robust data protection laws can offer peace of mind for long-term projects.

Among the best-rated regions when it comes to the collation of service quality, pricing and communication are Central/Eastern Europe and Western Europe.

Visit our article on Top Software Outsourcing Destinations to find out more about these and other areas of the outsourcing world.

Types of software development companies (location-wise):

Choosing a software development company, you are not limited to local outsourcing companies. You can pick a software house from different countries and continents even! For that reason, it's important to decide wisely after considering the pros and cons of every solution. Only a little research may help you and your project succeed.

Onshore companies

They are located within the same area: country or region. Local companies usually possess the significant advantage of speaking the same language as you. Still, they may come with higher expenses (the average hourly rate can be higher) or worse service quality (but it doesn't have to! It is highly region-specific).

Off-shore companies

Off-shore companies are based in a different country or region than you in a different timezone. This can influence cooperation in many areas for better and worse, from the quality of service, through the language barrier and possible risks, to the actual costs (those may be lower). It all depends on the situation, the country you're outsourcing from, and the company itself.

To find out more about this topic, visit our article about top outsourcing destinations. It tackles how location may affect, among others, the quality of service.

Nearshore companies

Nearshore companies are located 'close enough' - a country or two away. This may also mean significant changes when it comes to costs or specific technologies. However, it doesn't have to.

The fact that nearshore companies are within the same region as you may mean way better communication possibilities and easier cooperation due to the same or similar timezone, but it may also mean that the costs will be just like in your home country.

And isn't outsourcing about finding the best balance between cost and quality?

Software development company size

We recommend looking for well-established, rather smaller vendors than huge ones. This way, you can easily ensure that your project is well-prioritised. Large companies may not pay enough attention to less profitable or smaller projects (especially for small businesses and startups!). Going to an enterprise giant, you may get a low-priority label straight away or even not get their attention in the first place.

Hint: some of the listings mentioned below require listed companies to define the minimal project size, so you know whether they will be interested in developing your app within your budget.

Too small companies that have not been on the market for too long may not have enough experience or won't be able to take upon such a heavy workload to meet your business objectives. Software developers cannot duplicate themselves. Hiring someone special just for your project will take not only time but may end up with additional problems (such as worse communication within the development team).

Will a small software development company manage to assign someone for your software maintenance once the development itself is complete? We can only guess, but the team structure of a smaller offshore team usually does not allow for such bourgeoisie.

As always, it's best to stick with the golden mean. Make sure that the company is big enough to provide you with a project manager if you can't get one yourself. They will make sure that everything is on time, within the budget and simply spot on. Striking a balance seems to be the best option in every case, especially if you care about your business needs.

Years on the market

If you want to choose a startup, make sure they have well-established management and development processes. It's much safer to choose a software development company that has completed at least a few software projects.

Check whether it has been on the market for some time and has enough relevant experience among the team members. Have a look at the company's portfolio, ask about the story behind the software house, etc. You want your potential partner to have enough experience as well as to be real.

Do not simply check Google search results. The Internet can be quite a tricky place when it comes to honest opinions and the reliability of certain information. Do not trust shady-looking sites or fan pages, and watch out for fake profiles.

Visit trustworthy portals that verify outsourcing companies that are on their lists. Among them are, for example, TechReviewer or The Manifest.

You should also be able to find software development companies that are highly credible on websites that verify the "existence" of the company itself and the reliability of the reviews.

One such site is Clutch. They have a dedicated team that collects feedback from current or previous clients of all the software companies within their ranking. They conduct a thorough interview that consists of detailed questions about the development team, industry focus, communication skills, business requirements, quality-to-expenses ratio, overall satisfaction with the outcome of the partnership, and many more.

You can read more about the mentioned platforms (and many more), how they verify listed companies and whether there are any additional costs for using them in the How to find an app development company article.

A careful review of the impressions found online helps you to reduce the risk possibility.

Triple-check all the information before you choose your software development team.

Browse clients' opinions

Every time you consider a company as a contractor, check what their clients say. Pay special attention to the source of those reviews - not all of them as equally trustworthy. Beware of those on Google and Facebook - you never know whether those are real or written by the company's employees.

Check reliable sources - Clutch, for example. Those opinions are trustworthy because of the way they are written. Each one is based on the client's statement, and Clutch conducts each interview.

Avoid companies with poor references. Do not judge by the points or stars that have been assigned on various websites that state to have the best custom software development company. Sometimes five stars for someone will mean three for you.

Read the complete reference to find out what the entire process looked like. Then you will find out more about the development process and the outcome - whether the software was delivered correctly and on time. The client itself will tell you whether the company is trustworthy or not. You may also check testimonials on the company's website. You can trust the most those with a person specified.

Remember, however, that not every company can be mentioned by name.

Rely on your acquaintances' references

Gather also opinions from people you know. Ask them how they evaluate their cooperation with vendors they work with. Check the ones they are referred to.

Check out their certifications and awards

A reliable software development company will have a rich company portfolio and a wall full of certificates and awards. Framed diplomas? We want all of them!

Beware, though, many of such badges, stamps, and other proofs of quality may be doubtful. Did you know that you can buy some of them? Take our advice close to your heart and double-check this field too.

Talk directly with the company

Ask the company itself why you should choose them. Every company has something unique, and no one is more aware of that than employees. Check what they say and compare it with clients' opinions.

See if you have the flow. If you share similar business goals and mindsets and if you get along.

Check the portfolio/case studies. Investigate whether the company has experience in your domain or industry. It may tell you much about their expertise, scale of projects, and similar projects.

However, remember that many companies may not have the right to share their previous projects' details due to the non-disclosure agreements.

Before contacting the potential software development partner, define your needs and the end goal. Before choosing a custom software development company, make sure they understand what you want to do and how to reach the goal. Proper understanding will help you manage the software customisation.

This point evokes directly from the previous one. If a company understands your goal, it will be more willing to help you reach it. Look for people who will guide you, adapt to changing needs and understand your business. Look for someone who cares about your outcome like it was theirs.

Make sure the company will take part in the co-creation process. That helps them to understand your business and needs.

You need a partner who makes sure the software meets all expectations - meets the needs, works flawlessly and on a large scale. Solves the business problem and helps accomplish your business goal.

Look for people as interested in reaching the primary goal as you are, who will share your success or failure. This approach usually results in a better outcome because of a higher engagement of the team.

Meet the people you may be working with - make sure you understand and like each other and are on the same page. It's the people behind software solutions who matter. Make sure you enjoy working together (not only with project managers) - it will be extremely helpful when problems appear (and they will, almost always do; it depends on the whole team how to overcome them).

Take care of smooth & effective communication (and intuitive communication tools). Even if the company is located in a different time zone, it doesn't have to be an issue. Companies that operate globally are able to adjust their working hours to clients' needs.

Make sure that they have good communication skills - they speak English well enough to cooperate on a daily basis easily. The language barrier affects direct communication and may also make it harder to understand your goals.

You know that people matter, but only those you will work with. Building an app, think about end-users first and make sure the contractor's team do the same. Investigate whether they have a people-oriented approach and care about user experience.

Remember that you can potentially build an amazing app with unique and needed value, but it is difficult to use and will fail.

Even if you've done a market analysis, make sure the development company you hire will constantly take care of the user experience and your app interface. Make sure they have a designer you can cooperate with.

If you take care of your customers to be delighted, you will attract new ones.

Ensuring tech stack compatibility is critical. For example, a company primarily using .NET might face challenges if their vendor specialises in Java. Aligning tech stacks minimises onboarding time, reduces development hurdles, and ensures smoother integration with existing systems.

Find out what technologies and programming languages the company uses and establish whether they will be beneficial or limiting for your project.

It's good to start cooperation with a small project and continue with the bigger one after succeeding. Sometimes it's good to start with an MVP and check how the development company copes with the tech stack.

You need to find out whether you can afford this company. You may want to work with them, but you won't when you do not have enough money. To receive a reliable cost estimation, you should provide an appropriate requirements specification.

When you receive an estimation, verify whether it's transparent. You should know how much time it takes to create an app and how much it costs. Beware of too low estimates - a company might underestimate the required work time due to the lack of niche or tech expertise.

I know it's tempting and seems beneficial, but we don't recommend choosing the fixed-price model. In fact, it may cost more because of the risk of not knowing the full scope of the project. It may be even 25% more expensive than a time & material (T&M) project. What is more, if you choose a fixed price, the developer may not be willing to make changes to the project, and you will lose the flexibility of the T&M solution. To learn more about what to prepare for when choosing a fixed-price contract, check the article on fixed-price contract risks and how to manage them.

Investigate whether the company will be able to develop the software on time. Consult whether they have enough available developers and ensure they will meet the deadline on time.

Check how they are working, who is involved, and with whom you will communicate. Agile methodology is something you may especially keep your eye on. It's a set of frameworks and practices that, in short, improves the process of development of digital products (via, for example, a strong focus on communication, meetings, iterative software development and team cooperation). Waterfall, on the other hand, follows a linear process, making it better suited for projects with clearly defined scopes. The methodology should align with your project goals.

Be careful if an outsourcing company cannot clearly explain the stages of the development process. This may mean that something shady is going on - maybe you'd be their first project, or maybe they communicate inefficiently? Either way - you may want to keep away.

If you don't have business analysts on board, check whether the potential development partner can provide you with one. Proper business analysis may help you reach your business goal and decrease risks.

Ask about the testing or quality assurance (QA) stage - when does it start, and what do tests look like - better testing equals better outcome. You can get all the errors fixed in the meantime, without having to wait for this crucial step till the very end.

Ask them about the most impressive failure and how did they fix that. If they say there were none, watch out. Every company faces 'fuckups', and it is a totally normal thing during software development that one should not be scared of. The only important thing is how they fixed them. Was it a brilliant idea or a witty compromise? What did it teach them?

Be always involved in the development process, do not believe companies if they say that you can step away. Together with the software company, you can do way more when it comes to your project development. You are, overall, the product owner, the creator of the grand idea and all objectives. Within this partnership, they are expected to deliver, but you are responsible for it to a great extent too. Make sure that you are always there to manage, support choices and solve all the problems together with your potential partners.

Ask about the company's best practices for writing the code and project tech documentation.

Make sure your data will be safe and sound. You need to sign the NDA - an agreement through which both parties agree upon information that should and will stay confidential.

Consult the app security data processing protection, and be sure the app will comply with all relevant regulations. Clarify the Contract Terms & application ownership.

Look for vendors certified in international security standards like ISO 27001 or SOC 2. These certifications provide assurance that the company adheres to strict security protocols. Additionally, ask about their disaster recovery plans and regular security audits to protect sensitive data.

Don't forget to establish who will own the rights to the source code when the project is done. Choosing a software development company is also about ensuring you own for what you've paid.

For software developers is easier not to give you the rights to the app. When they maintain all rights, they can sell the app (or its parts) many times and make money on what you've initially paid.

Choosing a contractor, look for a company that will give you all rights to the end product so you can adjust the app to your business needs freely. Having the rights, you also gain a brand advantage - you are sure that your app is unique.

By the end of the cooperation, you will have a good working digital product, but you will need maintenance and support anyway - you need a team who will take care of an app when it goes live. You can't afford issues. They can affect end-users choices and even make them abandon the app. Problems may appear even when mobile operating systems change.

Make sure the development company of your choice can handle it. Changing a contractor for support can be a long, expensive and difficult process, and in the meantime, you can lose your customers.

You will most likely need to implement some changes to your project feature-wise. You need a reliable team who will do their best for you to provide further development to add additional functionalities in the future. It's the cheapest solution because you won't lose money to onboard someone else.

If you need a hand on how to choose the best software development company, check our checklist.