Software Development Outsourcing involves contracting a third-party developer with the necessary expertise to complete an in-house software development project, whether a brand new requirement or the enhancement/modernization of an existing piece of software. It is a popular option with many businesses because it can provide a very cost-effective solution (when compared to the cost of hiring and managing an internal team) and because it provides quick access to a large pool of IT talent, ensuring a best fit team of developers, QA, project managers and delivery.
Importance of Software Development Outsourcing
Global demand for software engineers is on the rise due to the rapid rate of technological progress and digital transformation increasing the need for software development.
Keeping up with emerging technologies using an in-house team of software developers can be expensive because of hiring, management and retention costs. For example, external development companies can give immediate access to emerging skill sets such as blockchain. Outsourcing should be considered as a central component of every digital transformation strategy.
There are three types of resources often used in outsourced software development:
- Onshore: Resources located in the same country as the outsourcing company
- Nearshore: Resources located in countries near to the outsourcing company and in similar time zones
- Offshore: Resources located in countries far from the outsourcing company’s geographical location.
Benefits of Software Development Outsourcing
Software development outsourcing is revolutionizing the global market. It provides businesses a competitive advantage by assisting in improving product quality, shortening time to market, and lowering costs. The following are just some of the benefits to be gained by outsourcing:
- Reduced Costs:
Software outsourcing helps companies cut costs and reduce workload. A company’s expenses rise when it has its own development team. Outsourcing software development can be a make-or-break decision in today’s cutthroat business environment, where technology and customer expectations constantly evolve. With software outsourcing, your business can save money and focus on what it does best without worrying about maintaining and updating the software itself.
- Opportunity to Instantly Gain Knowledge and Experience
Innovation has become critical for growth and success for organizations in today’s ultra-competitive markets. Software outsourcing firms have multidisciplinary, extended development teams with the wide range of skills needed to instantly provide an edge and accelerate the innovation and growth of your business.
- Faster Time-to-Market
Being first-to-market can have a massive impact on the success or failure of a project. Even the best in-house teams occasionally struggle with capacity and prioritization due to an over-abundance of work, resulting in delays to product launches and missed opportunities. Often, companies will rush to market with unfinished products just to gain that competitive edge in the short term only to have their reputation and results damaged in the longer term. Companies can better meet their objectives by hiring a competent and experienced workforce with minimal time spent on recruitment and orientation.
- Increased Scalability
Companies must always be prepared to meet new requirements and expansion which, in turn, leads to the need to scale their IT teams and capabilities. Finding, hiring, training and retaining resources quickly is both impractical and costly, particularly in today’s market. Typically, in-house development teams grow very slowly in terms of numbers and capability. Expanding your IT capability to grow your business may be a necessity, but outsourcing all or some of your new requirements can provide a timely, cost-effective and scalable solution that better meets your needs.
As a result of emerging technologies, outsourcing is becoming the norm for companies needing to react quickly in the face of their competition. With the help of an experienced, qualified outsourcing partner, any company can take advantage of these benefits and speed up their organizational change process and time-to-market.
Equally important, once the decision is made to outsource, is choosing the right outsourcing partner; essential in reaping the many benefits software development outsourcing can bring.