Software development outsourcing is the new normal. If your company’s growth is software dependent and your internal IT team has too many things on their plates, you should think of outsourcing your software development. We in this article walk through the benefits of outsourcing software development and an eight-pointer list of why outsourcing software to an offshore company still works!
Software outsourcing is basically an arrangement made by a business to hire a third party software contractor to do the software related work that could have been done in-house. But, developing a complete software application in-house demands both money as well as time. And honestly, not everyone has an extended IT team. In such situations, businesses turn to Software outsourcing companies.
Software development outsourcing helps businesses achieve greater economies of scale (a proportionate saving in costs gained by an increased level of production) and also focus on their core competencies without spending ample money or time.
According to the Information Services Group, when focusing on contracts with a total value of more than 25 million U.S. dollars, the annual global revenue from information technology outsourcing is estimated to amount to between 60 and 70 billion U.S. dollars.
Software development outsourcing, thus, provides businesses with a competitive advantage by minimizing costs, enhancing customer service and maintaining product quality on a limited budget. Let's see what are the benefits of software outsourcing and how to outsource software development effectively?
Why Outsource software development and why software outsourcing is good for your business?
 Access to a larger talent pool and the latest technology
One primary reason why companies outsource software development is exposure to global talent. Also, because expertise in every skill and technology cannot be demanded in-house.
With software outsourcing, businesses get access to skilled workforce all over the world, thus expanding their technical capability and horizon.
And it also means being relaxed. Everything from development to deployment is taken care of by the outsourcing team without any need for additional training or guidance. Make sure to keep these points in mind before choosing an offshore software team to ensure your software project screams wow!
You don’t spend much time or resource developing or managing the project but at the same time have shorter development time and faster time to market. This increasing exposure to talent due to software outsourcing, result in a competitive advantage for the company.
 Increased Focus on Core Business
Survival of the fittest! Remember? In today’s times, businesses have to find ways to innovate and expand in order to survive their competition. Outsourcing software development improves concentration on strengthening other core processes. It also doesn’t overwhelm your in-house staffs with work that doesn’t match their skill level, further allowing them to focus more on strategic goals in alignment to the business.
This, in turn, streamlines your business processes and helps to free up and allocate more resources to other processes that help make the business tick.
 Cost savings
Companies can save 30% on operating costs by outsourcing their software development! When you are running a successful business, the carousel (of spending, mostly) never stops turning!
When you outsource software development, there is a considerable difference in wages in developed and developing countries.
Also, you save a hefty amount of money in the form of employee salary and benefits when you outsource. So, software outsourcing to developing nations results in greater economies of scale and makes it cheaper for a firm to outsource software development and operations than to carry it in-house.
 Better Risk Management
When investing, we generally are advised to diversify our investment portfolio rather than put all the money in one place to reduce risk. Same with software outsourcing. Software outsourcing is volatile and effective risk management to reap its absolute benefits is critical to an organization's long-term viability.
Splitting components and operations amongst different vendors help mitigate risks. Do your due diligence, talk to the vendor’s existing clients, rate their previous experience and then decide. Always remember, the key to a successful software outsourcing relationship is “outsourcing transparency,”
 Accommodate peak loads
Every business has times when their demand is at the peak. This means re-distribution of available in-house resources to operations and processes they are not specialized in. Or this means hiring new employees.
Both results in higher costs and a decrease in efficiency. With software outsourcing, you can just hire a scalable team for just the peak period with absolutely no commitment. They help balance the workload, saving big bucks and at the same time increasing efficiency.
 Better Security
Assuming that your in-house team doesn’t specialize in IT, there are pretty good chances that your software’s security is not in safe hands. Security flaws will put sensitive information about the company at risk.
Outsourcing software development will give you better coverage against IT security breaches. The software team will ensure that the code and processes that go into developing applications are as secure as possible.
 Spend Less Time on Support
Software needs regular maintenance and support. So, you need a dedicated team to take care of the ongoing bugs and modifications. Outsourcing software development means you are already paying your software team for maintenance.
Also, if you are really lucky, there is a significant time-zone difference between you and your software outsourcing vendor. This is an advantage as it helps your business get the benefit of round-the-clock business operations.
 Reduce time to market
Businesses globally have recognized the need for speed and how it can be used to leverage competitive advantage. With software outsourcing, you don’t need to depend on your available in-house resources for the product launch. You can actually dictate the timelines in accordance with your schedule and will have dedicated developers at your service accordingly.
Want to get started with software development outsourcing then?
Start with analyzing what processes the software that you are looking to develop will automate and how automation will help your business gain an upper hand. Once you figure that out, shortlist software outsourcing companies and do your due diligence.
Share your requirements and go through their previous experiences. Ask for references. Take a look at a consolidated list of questions that you must ask your potential software development company before hiring them.
Software outsourcing maximizes flexibility. Outsourcing software development is a great option to obtain digital transformation and growth through innovation while reducing risks and increasing profit simultaneously. It also helps businesses obtaining competitive advantage without losing focus and efficiency.
If you want to know more about outsourcing, here is the complete guide to software development outsourcing.
Need a consultation on whether to outsource or not? Talk to us.