The software vendor selection process can be challenging. If you don’t want your partner to eventually fall short of your expectations, you need to specify certain standards for software vendor selection from the outset. Once you embark on a custom software development journey, you will need to define clear selection criteria to avoid the risk of recurring vendor searching. 

In this article, we explore the top 15 software vendor selection criteria you should consider and discover how to choose a software vendor.

Why are vendor selection criteria important?

There are thousands of vendors, each promising exceptional quality, and unique solutions. With such an abundance of choices, it might be hard to select a truly reliable partner. So, you need to come up with clear software vendor selection criteria to succeed. Here are our criteria on how to choose a software vendor.

Read more about best software development vendors in Eastern Europe

15 software vendor selection criteria in 2022

  1. Experience with product discovery, advanced prototyping, and business analysis 

When coming up with software vendor selection criteria, remember that you want a partner who can handle your project across the entirety of the development lifecycle: from Product Discovery up to market launch and post-launch support. A reliable partner should be able to drive the project forward, and you can be as involved in it as you want. The end goal of mature development practices is to lift as much weight off your shoulders as possible. A trusted vendor should be able to deliver desired results with minimal involvement on the client’s side. 

  1. Versatile tech expertise 

Businesses go to great lengths to find a software development company that specializes specifically in a certain domain and technology stack. Let’s say you are looking to extend your in-house team with microservices developers. You would first consider companies that provide this type of expertise and quick staffing regardless of all the other criteria. So, when looking for a specific skill set, you should shortlist those vendors who have a proven track record of working in that area.  

However, leveraging the knowledge of your partner is more cost-effective than developing all this expertise in-house. Even though today your company doesn’t rely on such technologies as Big Data, ML and AI, in the future, you may need them. So choose a mature vendor with diverse tech expertise so that you will be able to tap into it when needed.

  1. Strong portfolio

Before kicking off a partnership with a specific vendor, make sure the company has hands-on experience in similar projects. You need to know what kinds of solutions they’ve been working on before and what kinds of products they typically develop. So, during the software vendor selection process, make sure to dedicate some time to browsing through the portfolio of your vendor-to-be.

  1. Strong domain expertise

Strong domain expertise provides an in-depth knowledge of compliances and regulations specific to this business vertical. So, during the software vendor selection process, look for companies that have worked in your domain. Regardless of the type of product that you are trying to build, look for a partner who already has success stories of building reliable software for their previous clients in your domain.

  1. Industry recognition 

This is one of the vital software vendor selection criteria you need to check up on. Take into consideration the most reputable industry awards that would help you choose the best software development company. For instance, N-iX is regularly listed in the Global Outsourcing 100 by IAOP, Software 500, Inc. 5000, GSA, and other respectable ratings. 

  1. Established security policy

One of the key fundamentals that ensure safe access and use of data in a tech partnership is compliance with data protection standards. For instance, to make sure that our company meets all contractual, legal, and regulatory requirements, N-iX complies with the following data protection standards:

  • ISO 27001:2013. This standard ensures that a company establishes secure management systems for its clients. 
  • ISO 9001:2015. The standard signifies a high level of organizational management.
  • PCI DSS. This is an obligatory standard that ensures the financial data security of companies that accept card payments and handle cardholder information. 
  • GDPR. Compliance with this EU regulation ensures data protection and privacy on the territory of the European Union.
  • HIPAA. This standard ensures the secure handling of sensitive medical data of our clients that operate in healthcare.
  1. Company size  

The size of a software development company, as well as the scale of its projects, matter a lot during the software vendor selection process. The ability to scale the development team up or down is heavily influenced by the size of your tech partner. Medium and large-size vendors have more internal resources and a bigger external pool of candidates. So they can easily extend the development team to handle the increasing workload and rotate people to a different project if you need to ramp down.

For instance, N-iX boasts an internal talent pool of 2,000+ experts in different domains, so we can quickly staff your project or allocate the experts to different ones, in case you want to scale down. 

  1. Technologies, partnerships, certifications

The partner’s tech stack has to be one of your software vendor selection criteria. You must know what kinds of technologies they work with, what kinds of solutions they are familiar with, and what tools they leverage to deliver the results you need. 

Technology partnerships with reputable software companies are also a good sign. Being a certified partner with the global tech giants such as Microsoft, Amazon, OpenText, Google, and others means that the company offers expertise recognized by the industry leaders. Such certifications add credibility to the company’s name and guarantee exceptional service quality.

partnerships in IT outsourcing

  1. Reviews and testimonials

While choosing a software development firm, visit popular review platforms such as Clutch or GoodFirms to get some real customer feedback about different vendors. It is important to not just see the ratings but know what the clients have to say about a company. 

You may also try to reach out to previous or current clients and ask them about their experience working with the vendor. Most of them would not mind sharing their experience, and you will receive a first-hand review. 

  1. Suitable engagement models

To avoid your budget going through the roof, you should clearly understand the scope of your project and your final goal. The budget of the project is determined by the engagement model you choose, so it definitely should be among your software vendor selection criteria.

For instance, it doesn’t make sense to employ a full-time professional if you need their services only for a certain time. Also, it is not reasonable to pay your experts an hourly rate if they will be fully involved in the project. Hourly rates are much higher than the monthly, so the Time and Material (T&M) contract is not a fit for a long-lasting partnership.  

The Fixed Price mode works well for businesses that have a complete vision of the product. A dedicated development team model, by contrast, is an optimal choice for long-term projects with changing requirements. You receive a team of professionals entirely focused on your project. 

engagement models in IT outsourcing

  1. Communication

When businesses go through the software vendor selection process, they typically pay attention to the company size, pricing models, expertise, etc. Rarely do they define communication as an overriding factor in the software vendor selection process. However, it matters a lot. 

Ineffective communication includes aspects, such as low English proficiency, cultural differences, etc. But here we mean it more like the eagerness to understand your business needs. Opt for the vendor who tinkers with setting up extra calls and sending follow-ups showing their true interest in your business. The ambition of your tech partner to clarify all the nuances ensures the comfort of your further cooperation. 

  1. Knowledge transfer plans

The success of knowledge transfer depends on several aspects: people, processes, and a product. Without a proper understanding of what the product does, how it operates, and what people are responsible for specific tasks, it is impossible to deliver on your expectations. So, pay attention to this when compiling software vendor selection criteria. 

knowledge transfer in IT outsourcing

  • On the team level

It’s no secret that when software developer or a manager walks out of the door they take valuable knowledge with them. Thus, a software development firm needs to establish and encourage knowledge-sharing sessions between team members within a project. 

An exchange of knowledge on the individual level is the most important part of the knowledge transfer process. A big part of the knowledge is the code itself. But it’s one thing to know what the code does, and it’s another thing to understand what hidden catches might be in it. Thus, one-on-one meetings, tech talks between software engineers, DevOps professionals, and architects are obligatory to understand the logic behind the code and some well-established best practices when moving from one vendor to another.

  • On the vendor level

Your vendor should ensure that project knowledge is well documented and best practices are transferred to you or your new vendor just in case. So, make sure your partner can handle the transition as seamlessly as possible so that you can part on good terms.

It is vital to pay attention to: 

  • Sensitive data transition;
  • Information on source code ownership;
  • Product Regulatory Compliance (if relevant);
  • Non-disclosure agreement (if relevant);
  • Partnership termination agreement with a previous vendor (if relevant).

Remember, making sure that your vendor will be able to perform the knowledge transfer on both team and vendor levels should be among your software vendor selection criteria.

Learn more about an effective knowledge transfer plan: how to move IT outsourcing projects to a new vendor 

  1. Training acceptance 

It is important that your partner cares about the professional development of its employees and provide them with necessary tools such as professional certifications, leadership programs, employee career maps, etc. 

So, you might want to check if the company:

  • Has a strong and structured internal community of experts;
  • Participates in local and global IT conferences;
  • Arranges workshops, shares knowledge, hosts online webinars;
  • Has awards and expertise acknowledgments.

For example, at N-iX, we draw special attention to the professional development of each specialist. We have mentorship programs that help our people master new skills and get promoted. Also, we hold regular internal meetups to facilitate knowledge sharing within the company. Effective training ultimately helps retain top talent and provide better service to clients.

Also, our professionals unite in tech communities (e.g., .NET community, Java community, QA community, etc.) to boost the expertise across the company. 

  1.  Strong employer brand

The image of a software development firm in the global and local tech market has a huge influence on how well and fast they can attract tech talent. A business that is looking for a software development partner wants, first of all, to get rid of the recruitment hassle and split the risk of hiring people. So a vendor with a reputable employer image is less likely to have problems with employee staffing and retention. 

It is also a good idea to check whether your potential partner has trusted awards that prove their strong employer brand

  1.  Business agility

The knowledge of agile development practices is a must for any software development company today. 

When choosing a software development firm, make sure it is flexible enough to embrace the change as your business grows. This concerns a lot of aspects, such as the ability to scale, adopt new technology, offer different pricing models, knowledge acceptance, etc.

start building secure solutions with N-iX

Why choose N-iX as your software development company?

  1. N-iX has a talent pool of 2,000+ experts and an international outreach across Europe;
  2. We offer client-verified expertise across industry verticals like manufacturing, healthcare, fintech, supply chain and logistics, retail, telecom, and more;
  3. The company works with advanced techs like Cloud computing, Big Data, IoT, Data Analytics, Machine Learning and AI;
  4. We deliver our services in accordance with international standards and regulations like ISO 27001:2013, PCI DSS, ISO 9001:2015, GDPR, and HIPAA;
  5. N-iX has built numerous successful and lasting partnerships with leading tech companies like Gogo, ACL, Lebara, Wirepas, and more; 
  6. We are a Microsoft Gold Certified Partner, AWS Advanced Consulting Partner, OpenText Services Silver Partner, SAP Partner, Google Cloud Platform Partner, and more.

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