Chelsie May

Automotive Technology Enthusiast and Trend Seeker

Successful Software Development Outsourcing: Tips for Automotive Companies

Within the current autonomous market, software becomes a differentiator of successful automotive projects. So, make sure to find the right software outsourcing vendor that understands the particular aspects of the automotive industry.

Software outsourcing is a wise decision for many companies regardless of the industry. Yet, finding the right vendor is quite a challenge, especially for a field that has its specifics. Take automotive, for example. Over the last couple of years, the industry has experienced a dramatic shift in business models. Today, mechanical engineering-cantered companies have to compete with innovative autonomous car startups.

But what makes automotive outsourcing different from other fields? Should you trust a vendor with a stellar track-record in various areas but not automotive? And why does software development in automotive take so long? Let’s find out.

Automotive Software Outsourcing Basics

Today’s automotive industry requires a fresh approach to finding partners. OEMs cannot do all the work by themselves as they are not so proficient in software development, which is the main differentiator in today’s automotive, compared to technology companies. To work efficiently, cut down production costs and mitigate risks, OEMs outsource as much as it is profitable. Tier 1 companies supply OEMs with components and they are usually the ones looking for vendors to build software that will power their hardware.

Electric, connected, autonomous — these are the three types of vehicles that fuel the demand for automotive software development. And multiple IT companies are happy to offer their services. When looking for a vendor, though, it’s a good idea to focus on the nearshore tech teams. They have lower rates than in-house developers, offer a broader talent pool and don’t cause time and communication issues you may encounter with offshore development.

There are numerous aspects you can outsource. Leading automotive manufacturers and startups cooperate with software outsourcing vendors on the following issues:

  • Cybersecurity for various vehicle systems and units
  • Software for a connected car ecosystem (chips, sensors, radars, etc.)
  • Cloud-based platform development
  • Machine learning for connected services
  • Real-time tracking, routing, analytics
  • Advanced AI-based software for self-driving capabilities
  • Integration and compliance of electronic control units

Automotive software development companies offer a wide range of services. Your job is to find an experienced software development outsourcing vendor that knows a thing or two about the automotive industry. Here’s how.

Mind Changes in Certification and Compliance

There are many certificates that verify the vehicle’s safety, performance and quality. Old ones get replaced or altered while new certifications, procedures and regulations come into force. Autonomous and connected driving, for example, have their own requirements since these vehicles are much more complex in both software and hardware.

So, the first thing you should do when looking for an outsourcing vendor is to find out if they are familiar with the necessary automotive regulations. Your software outsourcing vendor should be aware of the changing certification rules like ISO 26262 Part II or ISO/PRF PAS 21448 that’s still in the making and create software that complies with them. For example, if you need an electronic control unit (ECU) solution, the vendor has to make sure it aligns with ISO 26262, SPICE and AUTOSAR 4.0 standards.

Prepare for Long-Term Cooperation

Software development outsourcing usually presupposes a long-term relationship between a customer and a vendor. In the automotive industry, you should count on even longer cooperation. You see, a bug in computer software can hardly kill you. But a bug in a vehicle’s autopilot can.

Because the software used in cars is considered a life-critical system with high standards and lots of requirements, it must be carefully developed and meticulously tested. And this makes automotive software development life cycles longer. Not to mention, OEMs usually prefer real-life testing on vehicles out of the safety concerns mentioned above.

This means that you need to choose a company that understands the importance of thorough R&D and testing, skipping the ones that promise a fast and easy solution. In this scenario, you also wouldn’t want your team members to change often, so pay attention to the employee turnover of the outsourcing vendor you choose. And that can also take a while.

Look for Agility

As far as long software development life cycles are concerned, implementing agile practices might speed up the process. Many examples of outsourcing in the automotive industry succeeded thanks to Agile. The software development methodology speeds up the development through short sprints, increases quality thanks to integrated testing, improves processes through retrospectives and takes advantage of automated testing. And thanks to regular sprint meeting and the transparency of all procedures, you get more control over the project.

Today’s automotive R&D suffers from risk-taking, cost pressure, uncertain conditions and ruthless creativity. In this environment, agile automotive software development becomes a must. So search for a team that lives by the Agile methods, principles and values. They make the development cost-effective and less stressful than previous practices. But be ready for frequent visits to your vendor and daily calls as a part of the agile approach.


When you look for a software development vendor, take your time to meet the candidates in person. Study their internal business practices, watch how developers communicate with project managers and team leads, find out if different project teams share their collective knowledge to solve problems and innovate. Check for agility, security, compliance with the general requirements for the software development process.

Building software for the automotive industry isn’t something to fool around with. The team you choose has to be responsible and reliable and you have to continually monitor their activities to make sure everything goes as planned and the result is impeccable. The only way to do it is through honest and transparent communication.

To sum up

Just like in any other industry, outsourcing software development in automotive can make or break your product. That’s why you need to put every effort into finding the right vendor. Look for a software development company that knows the peculiarities of automotive, understands the importance of industry certifications, realizes that this cooperation will be long-term, implements Agile practices to make the development process more efficient and is open to regular, transparent communication. Yes, it may be hard to find a vendor that ticks all the boxes, but when you do, get ready for success.

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