Three quotes on the table, three wildly different totals, and three agencies that all say they work agile. That is usually the moment an organization discovers that working out how to choose a software development company has little to do with the lowest price and everything to do with trust, continuity, and clear agreements.
A software company designs, builds, and maintains software for other organizations. Broadly, there are two kinds: product companies that develop one package and sell it to many customers, and custom development agencies that build software around the processes of a single client. If you're having software built, you'll almost always work with the second group, and then the people, the way of working, and the contract decide the outcome.
Below are nine questions that separate an agency that presents well from a software partner who is still standing next to you in five years, followed by the red flags, a scoring table, and our own answers.
What a software company does and why the type matters
Wikipedia's overview of the software industry is broad: any company that develops or supplies software falls under it. For your decision, the split between two types matters more. A product company sells licenses to an existing package. You start quickly, pay per user, and follow the vendor's roadmap. A custom development agency builds software that belongs to you and fits your processes, with a longer project and more involvement on your side.
In between sits a third option: hiring a developer or a small team that works under your own direction. That suits organizations with an in-house IT department and a clear plan. Search for a custom software vendor or a software company and you'll come across all three forms. The questions below apply mainly to custom development agencies.
If you're still unsure whether custom software is the right route, first read what custom software development involves and when off-the-shelf software is enough. An honest assessment up front saves months.
How to choose a software development company: nine questions
Ask every agency on your shortlist these questions and write the answers down word for word. The difference rarely sits in the presentation and almost always in the details of the answers.
1. Who builds the software and who maintains it afterward?
Ask for names and roles. At many agencies a project team builds the software, after which a separate support department or a subcontractor takes over. Every handover costs knowledge that you pay for again later. The best answer is that the people who build also do the maintenance, or at least stay in the same team.
2. Which comparable projects have they delivered?
Ask for two or three cases that resemble your project: the same sector, the same kind of integrations, a similar size. An agency that mostly builds online stores can also build a scheduling system for healthcare, only then it learns at your expense. Check whether the case names a measurable result instead of only a nice screen.
Marieke, head of operations at a healthcare organization with 300 employees, asked five agencies for a reference project in healthcare. Two sent a brochure, two gave her the name and phone number of a client, and one invited her to sit in on a sprint demo at a running project. Those last three made her shortlist.
3. What does the development process look like?
Almost every agency calls itself agile. So ask specifically how often you'll see working software, who your fixed point of contact is, and how changes to the scope get discussed. A good answer includes cycles of two to three weeks with a demo at the end, and a product owner on your side: someone from your own organization who sets the priorities.
4. Who owns the code?
This belongs in black and white in the contract: the source code, the documentation, and the environments are yours as soon as they're paid for. Also ask whether you get access to the repository, the place where the code is stored, during the project. An agency that shields the code until the final invoice makes you dependent at the moment you're least able to negotiate.
5. What about security and certification?
ISO 27001 is the international standard for information security, and ISO 9001 the one for quality management. A certificate proves that processes are documented, checked, and audited every year. Ask about practical matters too: how they handle production data, who has access to your environment, and how they keep the libraries they use up to date. In healthcare and government this is often a hard requirement.
To see those answers in practice, take a look at our cases in healthcare, manufacturing, and aerospace.
6. How does the team scale up and down?
A project sometimes needs five people in the build phase and one in the maintenance phase. Ask how the agency handles that: with its own people, with freelancers, or with a nearshore team. With nearshoring, part of the team works from a nearby country, in the same time zone and with the same way of working. It's a common way to scale without losing control, and what nearshoring is and when it works explains what to look for.
7. What happens when a developer leaves?
Bas, IT manager at a machine builder with 120 employees, heard in March that the only developer who knew his order portal had left the agency. The documentation turned out to be three versions old and there were no automated tests. It took four months before a successor dared to make the first change.
So ask whether at least two people work on your project, whether a colleague reviews every change, whether documentation is part of the work, and whether automated tests give a new developer a safety net. Agencies of any size can arrange this well, as long as the knowledge of your software sits with more than one person.
8. How is the quote put together?
A good quote describes the assumptions, the scope per phase, and what falls outside it. Ask how they handle work that wasn't in the original scope, what maintenance and further development cost per year, and whether you can start in phases with a first working version. A figure without assumptions is a gamble. The factors behind that figure are explained in what custom software development costs.
9. What do references say?
Call at least two clients who have worked with the agency for more than a year. Ask about the period after delivery: response time during outages, how changes go, and whether the team is still the same. References from the first project year are almost always positive. The years after that tell the full story.
Red flags when choosing a custom software vendor
With these three signals, probing further is the minimum and walking away is often wiser:
- A fixed price without a worked-out scope. Without shared assumptions, one of the two parties pays the difference. That ends in arguments about extra work or in an agency that quietly cuts back on tests and documentation.
- No access to code and environments during the project. You're buying a black box and only discover the quality at delivery, when course corrections are expensive.
- Everything runs through one account manager. If you never speak to the people who build, information gets lost in the handover and you only notice misunderstandings once the software is live.
Other signals that deserve attention: cases without names or numbers, a team that says yes to every wish, and a quote that lands in your inbox within a day of the first conversation.
A comparison table to fill in yourself
Put the answers of three agencies side by side and score each question from 1 to 5. Weight the first, fourth, and seventh questions most heavily: continuity, ownership, and knowledge sharing decide where you stand in five years. An agency that scores low there drops out, even if the price is attractive.
| Question | Agency A | Agency B | Agency C |
|---|---|---|---|
| 1. Builders are also maintainers | |||
| 2. Comparable cases with measurable results | |||
| 3. Short cycles with demos | |||
| 4. Code and documentation are yours | |||
| 5. ISO 27001 or comparable demonstrable security | |||
| 6. Scalable team in the same time zone | |||
| 7. Knowledge sharing: two people, reviews, tests | |||
| 8. Quote with assumptions and scope per phase | |||
| 9. References older than a year | |||
| Total |
How we answer these questions ourselves
We get these nine questions regularly, so here are our answers. The people who build the software at Isatis are the same people who keep it running afterward. That is the core of our model. We work in short cycles with a demo at the end of each one, the code and documentation belong to the client, and we're ISO 9001 and ISO 27001 certified.
We scale with our own team of 30+ engineers in Nijmegen and Sarajevo, working in the client's time zone (CET) and with the client's way of working. If you need temporary extra development capacity, you can also add engineers to your own team. In more than 30 years and 100+ projects in healthcare, education, manufacturing, government, and energy, we've learned that an honest answer at the start is the basis for a long partnership, even when that answer is that custom software is the wrong route for your project.
Frequently asked questions
What is a software company?
A software company designs, builds, delivers, and maintains software. Product companies develop one package for many customers, and custom development agencies build software for the processes of one organization. Both fall under the same term, and the choice between the two is the first step in choosing a software vendor.
What is the difference between a software company and a software developer?
A software developer is a person who writes code, either employed or freelance. A software company delivers a team with several roles: developers, testers, a project lead, and often an architect or designer. For a small, well-defined project one developer can be enough. As soon as continuity, maintenance, and security count, a company offers more certainty.
How many quotes should you request?
Three works well in practice. With fewer you miss a reference point, and with more you lose time better spent on reference checks. Give all three agencies the same starting points and ask them the same nine questions, otherwise you're comparing apples with oranges.
What should you look for in a quote for custom software?
The assumptions, the scope per phase, what falls outside it, and how extra work is handled. Also look at the cost of maintenance and further development after delivery, and at the ownership clause for code and documentation. A quote that only names a total and a delivery date gives you too little to go on.
How to choose a software development company: the key points
Choosing a software company is above all a choice for people and agreements. The technology follows. The key points:
- The same people build and maintain, so knowledge stays.
- Code, documentation, and environments are yours, also during the project.
- Short cycles with demos make progress visible and course corrections cheap.
- Certification and knowledge sharing protect you against departures and incidents.
- A quote without assumptions is a gamble.
Make a shortlist of three agencies now, ask them all nine questions, and fill in the table. To hear our answers to those questions in person, book a no-obligation call. We'll also tell you honestly if a different type of partner suits your project better.
