What Does a Software Development Agency Actually Do?

What a Software Development Agency Actually Does (And Doesn't Do)

If you have never worked with a software development agency, the whole concept can feel opaque. You know they "build software," but what does that actually mean day to day? What services do they provide? What do you need to do versus what they handle? And how is an agency different from hiring freelancers or building an internal team?

Understanding what a dev agency does before you engage one saves you from mismatched expectations — the number one cause of failed outsourcing relationships.

This guide explains the full scope of what a professional agency provides, how the process works from your perspective as a founder, and what you should expect at each stage.

The Core Services

A full-service software development agency typically provides five categories of service. Not every project uses all five, but a good agency offers them as a complete package.

1. Discovery and Strategy

Before any code is written, the agency helps you define what to build and why. This is the most undervalued phase — and the one that prevents the most costly mistakes.

What happens during discovery:

• Requirements analysis — The agency interviews you (and ideally your target users) to understand the problem, the market, and the desired outcomes
• Competitive analysis — What exists in your space? What can you learn from competitors' successes and failures?
• Feature prioritization — Using frameworks like MoSCoW (Must/Should/Could/Won't), the team helps you decide what goes into v1 and what waits
• Technical architecture — What technologies, platforms, and infrastructure should the product use? This decision has long-term implications for cost, performance, and scalability
• Project roadmap — A phased plan with milestones, timelines, and deliverables

Your role: Share your vision, your constraints, and your knowledge of the target user. The agency translates this into a technical plan.

Duration: 1-4 weeks depending on project complexity.

2. Design (UX and UI)

Design is not about making things pretty. It is about making things usable. A good agency separates design into two layers:

User Experience (UX):

• User flow mapping — How does someone move through your product?
• Wireframing — Low-fidelity layouts that define structure and functionality
• Information architecture — How is content organized and accessed?
• Usability testing — Testing wireframes with real users before visual design begins

User Interface (UI):

• Visual design — Colors, typography, spacing, and branding
• Component library — Reusable design elements for consistency
• Responsive design — How the product adapts to different screen sizes
• Prototyping — Interactive mockups you can click through before development starts

Your role: Provide feedback on designs. You do not need design expertise — just honest reactions about what makes sense for your users.

Duration: 2-4 weeks for an MVP.

3. Software Development

This is the core of what an agency does — writing the code that turns designs into a working product.

What "development" actually includes:

• Frontend development — The user-facing interface (what users see and interact with)
• Backend development — The server, database, and business logic (what happens behind the scenes)
• API development — The connections between your product and external services (payment processors, email providers, analytics)
• Database design — How your product's data is structured, stored, and retrieved
• Infrastructure setup — Servers, hosting, deployment pipelines, and monitoring

How development works in practice:

Most agencies work in sprints — typically 2-week cycles. Each sprint follows a pattern:

1. Sprint planning — The team selects work from the backlog based on priorities you have set
2. Daily standups — Brief check-ins where each developer shares progress and blockers
3. Development — Writing code, reviewing each other's code, and resolving technical challenges
4. Sprint review — The team demos what they built to you. You provide feedback
5. Retrospective — The team reflects on what went well and what to improve

Your role: Attend sprint reviews (30-60 minutes every 2 weeks). Provide feedback on delivered features. Adjust priorities based on what you learn.

4. Quality Assurance and Testing

Testing is where good agencies separate themselves from cheap ones. Quality assurance is not a single activity — it is a continuous practice woven through the entire development process.

Types of testing an agency performs:

What you should expect: The agency should share test coverage metrics and QA reports. If they cannot tell you how much of the code is tested, they probably are not testing enough.

5. Deployment and Maintenance

Building the software is only half the job. The other half is putting it in front of users and keeping it running.

Deployment includes:

• Setting up production infrastructure (cloud hosting, CDN, SSL certificates)
• Configuring CI/CD pipelines (so updates can be deployed quickly and safely)
• Monitoring and alerting (so the team knows when something breaks before users report it)
• Backup and disaster recovery (so your data is safe)

Post-launch maintenance includes:

• Bug fixes — Addressing issues that surface in production
• Performance optimization — Improving speed as usage grows
• Dependency updates — Keeping libraries and frameworks current for security
• Feature iterations — Building the next version based on user feedback

Your role: Monitor user feedback and business metrics. Share insights with the agency so they can prioritize technical improvements that have the biggest business impact.

What an Agency Does NOT Do

To avoid misaligned expectations, here are things a software development agency typically does not handle:

• Business strategy — They can advise on technical product decisions, but market strategy, positioning, and pricing are your responsibility
• Sales and marketing — Building the product is different from selling it
• Content creation — Unless specifically included, copywriting and content strategy are separate
• Hardware — Most agencies focus on software; physical product development is a different specialty
• Ongoing customer support — Some agencies offer tier-2 technical support, but customer-facing support is usually your team's role

How Working With an Agency Actually Feels

For a non-technical founder, here is a realistic picture of what your weekly involvement looks like during an active engagement:

Week-to-Week Rhythm

Total time commitment: 4-8 hours per week. The rest of your time is free for fundraising, sales, marketing, and everything else that needs your attention.

Compare this to managing freelancers (15-20 hours/week) or an internal team (20-30 hours/week, plus recruiting and HR).

How an Agency Differs From Other Options

For a deeper comparison, see our guide on agency vs freelancer vs in-house.

What to Look for When Evaluating an Agency

Now that you know what an agency does, here is how to evaluate whether a specific agency does it well:

Process Maturity

• Can they walk you through their development process step by step?
• Do they have templates, checklists, and documentation for each phase?
• Do they practice retrospectives and continuous improvement?

Technical Depth

• Can their developers explain technical decisions in terms you understand?
• Do they have opinions on technology choices (not just "whatever you want")?
• Can they share code samples or open-source contributions?

Communication Quality

• How responsive were they during the sales process?
• Do they have defined communication channels and cadences?
• Will you have direct access to the development team?

Track Record

• Can they provide verifiable client references?
• Do their case studies describe real problems and measurable outcomes?
• How long do their client relationships typically last?

For a complete evaluation checklist, see our 15 questions to ask before hiring a dev agency.

The Agency Relationship: Partnership, Not Transaction

The best agency relationships are partnerships where both sides are invested in the product's success. You bring the vision, market knowledge, and business context. They bring the technical expertise, process discipline, and execution capability.

When this partnership works, it feels like having your own engineering team — without the recruiting, HR overhead, and management burden.

Ready to see what working with an agency looks like in practice? Start a conversation with Soatech. We will walk you through our process, introduce you to the team, and show you exactly how we would approach your project. You can also explore our service offerings to see the full scope of what we deliver.