Key factors to consider when selecting a software development company: How to identify trustworthy options

The cover represents the purpose of the article, providing guidance on selecting a software development company. It features a map with pinned profiles depicting various company representatives. Three profiles are zoomed in: one shows a woman with curly brown hair, glasses, and a longsleeve; another shows a woman with long fair hair wearing a shirt; and the third shows a man in a shirt and tie. A magnifying glass is examining the man’s profile.

There are numerous companies in the market offering custom software development services to businesses. To assess the scale of the options available in your country, you can utilize resources like Clutch. Below, you can find statistics for several countries:

Number on Clutch5,4071,3371,045444
Number on Goodfirms3,400694477360

For business owners, it is not necessary to understand all the intricacies of development and internal processes. But how do you know that you’re not working with someone incompetent, ill-equipped, or downright unscrupulous? In other words, how to choose a software development company for your project?

The importance of selecting a reliable development company cannot be overstated, as it directly impacts the quality of your product and saves both money and time. For instance, releasing an app when it has already lost its relevance can be detrimental. Unfortunately, there may be instances where you initially believe you made the right decision, but during the development process, you realize that the team does not align with your vision. These situations require careful consideration and attention, and we’ll discuss them further.

Initial steps

Before you reach the stage of analyzing the inner processes of the company you have selected, you must first choose that company from the hundreds and thousands of firms available on the market. Here are three helpful steps to aid you in this process.

Step 1. Check reviews and feedback

One aspect to consider is to ensure that the chosen company has authentic reviews. Platforms like Clutch provide reliable feedback and testimonials from previous clients. These reviews offer valuable insights into the company’s performance, professionalism, and overall satisfaction of their clients. By thoroughly examining these reviews, you can gain valuable information about the company’s competence and reliability.

Step 2. Make sure they have relevant experience

While not mandatory, having relevant experience in your industry or niche can be advantageous when selecting an outsourced development company. By choosing a firm that has prior experience in similar projects, they will be more familiar with the challenges, trends, and specific requirements of your industry.

Step 3. Pay attention to the transparency of the processes

Transparency in the development process is paramount for a successful outsourced project. Ideally, the chosen company should have clear and transparent processes in place. Look for indicators such as regular demos, the ability to access code and design files, and a system for task management. These elements ensure that you have a comprehensive understanding of the progress and can provide timely feedback. Seamless communication and accessibility throughout the development phase are crucial for effective collaboration and meeting project goals.

By considering these three steps — genuine reviews, relevant experience, and transparent processes — you can effectively narrow down your options. Once you have chosen a company, the initial aspect you will encounter is communication.

Communication in the custom development process

To navigate the custom software development terrain, it’s important to have a clear understanding of how the client-developer partnership is typically managed.

One key aspect of this partnership is communication. This should be cultivated meticulously to create a common understanding of the software goals, requirements, and progress. Here’s how quality communication might look:

Regular demos and feedback sessions

The development company should not only provide regular demos but also facilitate scheduled feedback sessions. This is a designated time for you to discuss the software’s features, raise any concerns, or suggest adjustments. Regular constructive dialogue allows for immediate response to any issues, ensuring that the final product aligns with your expectations and specifications.

The picture highlights important warning signs to consider when selecting a software development company. The list includes: 1. Lack of visible results within reasonable timeframe (regular demos every 2-3 weeks, not months). 2. Significant decrease in progress over time (features now taking weeks instead of days). 3. Constant reassurances without tangible evidence or visible progress being shown.
Red flags to be aware of when choosing a software development company

Access to the process

As we said, transparency is pivotal in maintaining trust in the partnership. Greater access could encompass observation of ongoing designs, screenshots of the code, and seeing the design evolution. For example, platforms like Figma, that offer real-time views of in-progress designs, can be instrumental in achieving this level of trust.

Dedicated point of contact

Having a dedicated project manager or liaison ensures that you have a dependable direct line of communication. This streamlines inquiries, feedback, or concerns and accelerates response times.

Regular progress reports

Periodic progress reports provide a detailed breakdown of the work completed, upcoming milestones, and any challenges faced. This keeps you abreast of the software’s development pace and allows you to forecast its completion accurately.

It’s a good sign when an agency willingly shows you their work-in-progress, whether it’s code, design files, or other evidence of ongoing tasks. Adequate access to this information signifies transparency and ensures you’re not kept in the dark about your project’s progress.

Clear change management process

Changes are often inevitable in custom software development. A clear process for handling change requests ensures that any adjustments you want to make are handled efficiently and have minimal impact on the project timeline.

Thus, open and consistent communication is fundamental in a successful partnership with a software development company. This ensures you are fully aware and involved in your project’s development, leading to a software product that meets your expectations and needs.

Communication tools

Why is this point important? The communication tools used by a development company are indicative of their processes and structure, as well as how effectively they communicate with clients and stakeholders. It’s important to confirm that the development company has the appropriate tools so that communication is both frequent and clear.

There are four channels of communication that are likely to be used. See them in the visual below:

MThe picture showcases four commonly used communication channels and related apps in software development companies’ interactions with clients: 1. Instant messaging platforms like Slack and Mattermost. 2. Project management and bug tracking tools like Jira, Trello, Asana, and Clickup. 3. Daily meeting solutions including Skype, Google Meet, and Zoom. 4. File sharing platforms such as Google Drive, Dropbox, and Notion.

Once the communication is established, attention can be turned towards addressing legal matters that protect your intellectual property and maintain confidentiality.

Intellectual property protection

A reputable software development company takes legal matters seriously, particularly when it comes to protecting intellectual property. One important aspect to consider is the presence of a non-disclosure agreement (NDA), a legal contract that ensures the confidentiality of proprietary information and intellectual property related to the software development project.

By having an NDA in place, you can ensure that the development company is legally obligated to keep your intellectual property, trade secrets, and other proprietary information confidential. This agreement establishes a framework that protects your rights and minimizes the risk of unauthorized disclosure or misuse of your valuable assets.

When assessing an NDA, here are some key aspects to consider:

Clear and comprehensive language

The NDA should clearly outline the scope of information covered by the agreement and explicitly state what constitutes confidential and proprietary information.

Duration and termination

The agreement should specify the duration of the NDA’s validity and the conditions under which it may be terminated. This ensures that your intellectual property remains protected even after the project concludes or the partnership ends.

Non-compete clause

An NDA may also include a non-compete clause, which prohibits the development company from engaging in similar projects or collaborating with competitors during or after the project’s duration. This adds another layer of protection for your intellectual property.

Repercussions for breach

The NDA should clearly state the consequences that the development company will face in the event of a breach of confidentiality. This could include legal action or monetary damages.

Access to information

The agreement should outline who within the development company has access to confidential information and define the necessary precautions they must take to safeguard it.

By carefully reviewing these elements of an NDA and ensuring that they align with your needs and expectations, you can entrust your intellectual property to a software development company that prioritizes legal protection and respects your proprietary information. Continuing from the discussion on legal aspects, let’s now delve into the payment details, a major concern for any client.

Why do software development companies offer a time and materials approach?

Software development companies often operate under a time and materials approach due to its multiple advantages. Let’s break down the concept further and explore its implications on the cost and quality of the eventual product.

This approach pertains to billing you based on the actual time spent on development tasks and the cost of resources or materials used. The method provides transparency and showcases the actual efforts that go into the project.


The approach is appreciated for its flexibility. As the project progresses, requirements often change, and new features might be added. The time and materials approach allows developers to efficiently adapt to such changes and optimally allocate resources.


Clients gain a clear understanding of where their budget is being utilized with this approach. Regular updates from the development team on the progress of tasks provide insight into the efforts being invested and the corresponding costs. This fosters trust between clients and developers, yielding a more positive working relationship.

Think about constructing a home with a set budget, rather than compensating for materials and labor at every phase of the build — this is similar to software development. Just like every brick and beam counts in a building, every feature and function matters in software development, and the costs can fluctuate throughout the process.

Impact on cost and quality

It must be noted that while the billing is based on actual work done, the time and materials approach could affect the costs and potentially the quality of the final product. Due to the flexible nature of this approach, it requires careful management and open communication to avoid costs swelling unexpectedly or quality levels dropping. By assessing the status of tasks at regular intervals and effectively managing project scope, you can ensure efficient utilization of your budget and a high-quality final product.

How to check that the work is done? Normally developers and designers track their work and make screenshots of the progress which can be sent to the client for review. There are also many remote collaboration tools available that allow developers and designers to share progress updates in real time. Examples of such tools are Asana,, and Basecamp. The client can request to be a part of these tools in order to track the progress of the team and also provide input when needed.

The picture displays a sprint planning template using the Asana app. It features four kanban columns labeled as "backlog," "ready," "in progress," and "done." This visual system enables clients to track the progress of projects executed by their software development partner company.
Sprint planning template in Asana

Other types of contracts

While the time and materials approach works well for many projects, there are certain situations where other payment methods may be more suitable. For instance, a fixed price may be a better option for smaller projects or when a single, well-defined feature needs to be implemented. The fixed price model provides certainty regarding total cost upfront and is less subject to fluctuations due to changes in project scope.

On the other hand, a subscription model may be ideal for providing maintenance services after the product has been launched. In such a scenario, the client pays a set monthly or yearly fee for ongoing support and updates. This model allows clients to plan for costs in their ongoing budget and ensures that their software remains up-to-date and continues to meet their needs.

In conclusion, the choice of a billing approach should be thoughtfully considered in line with the individual project’s needs and scope, which might require a combination of different methods such as fixed price for feature implementation, time and materials for principle development, and subsequently a subscription for post-release maintenance and updates. No matter what financial model is chosen, maintaining transparency and effective communication is key for a successful partnership between the client and the software development company.

Strategies to ensure you don’t overpay for development

When embarking on a software development project, ensuring cost-effectiveness is crucial. By implementing the right strategies, you can maximize the value of your investment while avoiding unnecessary expenses. Here are some tips and recommendations to help you navigate the development process and keep costs under control.

1. Clearly define project requirements

Taking the time to clearly define your project requirements before development begins will help prevent misunderstandings and unnecessary changes later on, saving you time and money. However, a reputable development company will actively engage with you to help define and refine your project requirements, ensuring clarity and alignment from the start. You can also request an estimation from your development partners before the start.

Read how to estimate your project in the article or estimate with our help

2. Manage project scope carefully

Keep a close eye on the tasks and goals of your project. If there are any requests to change or add something to the project, have a process in place to evaluate how those changes will impact the budget and timeline. Make sure to consider and approve these changes carefully to avoid going over budget or missing deadlines.

3. Maintain regular communication

Stay actively involved in the development process by regularly reviewing progress, attending demos, and providing timely feedback. This will help address any needed adjustments or iterations promptly, avoiding costly rework or errors.

4. Request progress reports

Ask the development team to provide regular progress reports with details on completed tasks, upcoming milestones, and any roadblocks. This will help you stay informed about the project’s status and identify areas where cost savings can be made.

5. Verify time spent on tasks

Ensure that the time billed for each task aligns with the actual work completed. Request screenshots or demonstrations of the work done to avoid paying for unproductive hours. Usually, teams use screen capture software or time tracking applications like Hubstaff to capture the hours logged in on tasks, so in these cases, ask for access to the records to verify.

The picture showcases Hubstaff screenshots, providing a visual representation of employees’ activities. The "screenshots" feature allows employers or clients to observe real-time progress of the project through the designers’ screens.
Hubstaff screenshots displaying the employees’ activities
6. Pay attention to testing and quality assurance

Invest in comprehensive testing and quality assurance to catch and address issues early on. This will help prevent costly fixes and rework in the later stages of development. Prioritizing quality assurance ensures that the final product meets your expectations without incurring additional expenses.

By following these strategies, you can effectively manage your development costs and get the most value out of your investment in working with an outsourced company.

Summing up

In conclusion, partnering with the right software development company has a significant impact on the quality of your project. The process doesn’t have to be daunting or require you to be a technical expert. Understanding the basics of how they work, how they communicate, and how they treat legal aspects such as intellectual property rights can go a long way in ensuring a smooth development process. While you don’t need to master every aspect, having an overview allows you to make more informed decisions.

Ultimately, establishing a mutual understanding and maintaining open lines of communication with your development company is key. This open dialogue will let you stay updated on your project’s progress, intervene when necessary, and ensure that the final product aligns with your vision.

We hope this guide provides you with a clearer road map to making that choice with confidence. Should you have any inquiries concerning our workflows or how we foster communication with clients, don’t hesitate to reach out. Click on the "Get in Touch" button below to begin our conversation.

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