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Agency work has been heavily impacted by the recent goings-on in tech, AI in particular of course. While content/marketing agencies were immediately affected by the public introduction of LLM tools, sectors such as software development are now also experiencing this impact first-hand.
There’s no denying that development agencies need to adapt to the advancements in AI coding assistants – but it’s not all doom and gloom for software development outsourcing. This is actually a unique opportunity for agencies to showcase how they can bring irreplaceable value to their clients and distinguish themselves from quick and easy solutions like vibe coding.
In this article, we’ll take a look at five key considerations and best practices for seeing success with software development outsourcing in an AI-dominated landscape. We’ll explore both tried and tested evergreen considerations as well as more recent, AI-specific priorities. Let’s get started.
1. Good communication
The main priority that we always highlight when discussing optimal client-agency relationships is the critical need for good communication. Most importantly, communication needs to be timely and transparent to ensure a smooth collaboration, with alignment on both the technical and business aspects of the project.
Since software development outsourcing typically involves collaboration with remote engineering teams across different time zones, both synchronous and asynchronous communication need to be facilitated.
Another essential component of good communication is good project documentation. Through more than a decade of experience in collaborating with development teams, poor documentation (or a complete lack of documentation) has been a much more common challenge than most technical challenges.
In contrast, good documentation allows other developers, either in-house or outsourced, to easily join the project at any point in the future. This is such an important feature of a successful development partnership that we always make sure to optimize the documentation whenever it’s lacking or missing.
2. Alignment on project goals and limitations
Successful collaboration between software development agencies and their clients also requires alignment on the project’s main goals, based on a keen familiarity with the business context and any technical limitations, which needs to be shared between both in-house and external developers.
This is one of the major reasons why timely and transparent communication is so crucial in software development outsourcing. It ensures that outsourced developers understand the business requirements from the very start of the partnership, and can then draw on their first-hand industry experience to communicate potential technical limitations and challenges to the client upfront.
3. Showcase of existing work and client satisfaction
One key avenue for ensuring a fruitful client-agency partnership is the development agency’s showcase of past successful projects and client satisfaction, i.e. through case studies and testimonials, either on their own platform or on platforms like Clutch.
This kind of credibility is something that AI can’t easily replicate, but is essential for sectors such as enterprise software, healthcare and government services. Not only does it signal reliability and technical expertise, it also makes it easier for prospects that are looking for a development partner experienced in a specific sector or type of project to find the right fit.
So, showcasing their work together with client feedback is not only a benefit for development agencies themselves, but also for their (prospective) clients who can easily ensure that their new development partner has developed similar apps/websites in the past and solved similar challenges while doing so.
4. Demonstration of responsible AI use
Even when developing more advanced software that requires dedicated human expertise, the use of AI in the development process is unavoidable. Development service providers need to demonstrate responsible use of AI, leveraging it in tandem with their industry experience to bring unique value to their clients.
Most crucially, responsible AI use highly prioritizes security, i.e. making sure that no use of AI compromises security in any way. This includes attentive developer oversight, both during development and during testing, as well as access to paid and/or custom rather than public LLMs/agents so as not to compromise sensitive data.
Standardization around one or several specific AI tools is also important, but ultimately the choice of tooling should be made on a per-project basis – i.e. the partner company’s developers should ideally adopt the tooling of the client’s in-house team in order to guarantee optimal/smooth collaboration while maintaining agility.
In addition to having company-wide policies on responsible AI use, providers of software development services also need to ensure that their individual team members all use AI responsibly, as a helpful tool rather than a crutch or a silver bullet.
Senior developers with years or decades of experience typically won’t have the problem of over-relying on AI assistants. However, the onboarding and training of juniors should definitely include teaching responsible AI use in order to help them hone their own problem solving skills and take on more complex technical challenges.
5. Including developers in the strategy phase
Due to the significant productivity and time saving gains of AI, including developers in the strategy / R&D phase of software development has become more important than ever. AI is great for solving technical problems, but those aren’t the only challenges in software projects. Challenges related to organizational politics and inherent human behavior require actual human input for optimal results.
Whether with an in-house team or when outsourcing development, including developers in this key phase of development allows businesses to get the most value out of the developers’ time and expertise. In the case of outsourcing, this unique value is what brings the biggest return on investment for companies.
Additionally, including developers in srategy helps with other priorities discussed in this article, such as more efficient communication and better alignment on project goals and limitations. Hands-on industry experience also results in a greater focus on security, faster responses to market shifts, and significantly less friction due to rework, pivots, etc.
Conclusion
Recently there has been a lot of discussion about the future of development outsourcing in the AI age and how development service providers can continue to bring value to their clients.
Right now, we’re in a unique moment in time where tried and tested agency models are quickly becoming obsolete, but new best practices haven’t yet been established.
The one thing that we can be certain of is that the need for software development is definitely not going anywhere. Those providers of development services that continue to deliver value to their clients have the chance to not only thrive in this new reality, but also to act as setters of new industry standards.
The five considerations covered in this article are not new practices, but remain invaluable even in these volatile times. We hope they help you have mutually fruitful client-agency partnerships.
In case you’re currently looking for help on a software project, learn more about what it’s like to work with Agiledrop developers, and reach out to us directly if you have any specific questions and/or would like to schedule a call to discuss them in more detail.
