Software Development Outsourcing

Your Full Guide to Software Development Outsourcing

Business organisations around the world and across verticals have started their digital transformation journeys. While every organisation is at different stages, there is a continuous search for new ways to digitise solutions and processes. 

A single company doesn’t always have all the resources and capabilities required to develop and market a solution from start to finish. According to data shared by Statista, the outsourcing industry has grown sizeably in the past few decades, climbing to $85.6 billion in 2018 from $45.6 billion in 2000. This is proof of the acceptance of outsourcing software development.

What is Offshore Software Development?

Some organisations tend to open offices beyond their national geographical boundaries. This office is what becomes an offshore development centre. Software outsourcing companies have individuals in different countries working for them as regular employees would. The only difference between employees and the developers working in an offshore development office is their location from the main enterprise.

When Should You Opt for Software Development Outsourcing?

There are several reasons for enterprises to choose to outsource their software development needs. 

  1. Low costs: Software development outsourcing can help you save a significant amount of money by cutting down your costs significantly. There are many different business expenses such as rent expenses, annual bonuses, monthly salaries, licenses for software and other functions and other benefits like travel allowance. Hiring a whole team full-time can prove to be expensive. Instead, you can outsource your software development needs to a country where the exchange rate brings down your expenses. 
  2. Larger scaling opportunities: Businesses start small but expect to scale up over time and make it big. This requires a fully equipped team with capabilities that you might not find in your local talent pool.

Benefits of Software Development Outsourcing:

Rarely do businesses start as offshore software companies. When enterprises start moving significantly forward, they realise what they can and cannot find in their local market. At this point, they start exploring software development outsourcing strategies and options. There are several benefits that this model of operations can have for your business.

  1. Access to a great talent pool:
    You might have noticed a greater trend of outsourcing in the West. You will find more software outsourcing companies in the UK and US than in the East. This is because the pool of skills and talent available in the country is not as high as it would be on outsourcing. Countries like India have a thriving software and IT industry. The talent and experts produced in this field have led large companies in the West to engage with these readily available resources. 
  2. Reduced operational costs:
    In-house employees need to be paid according to the currency value in your country, which could mean a high operational cost in the long run. In comparison, hiring experts in India or another country with a lower exchange rate and ad-hoc basis can significantly bring down your costs. A project-basis work contract helps you avoid full-time employee benefits and save on office space, licensing, and any overhead costs. 
  3. Better scalability options:
    It always hampers a business when employees leave in the middle of a project. It means the project deadlines get affected, and your business will almost certainly suffer significant financial losses. Having a few people do the work of an entire team will put too much pressure on them and affect the quality of your output. However, offshore teams can get you through these situations very easily. You can easily hire top talent and resources at reasonable prices very quickly. The process is fast and helps you add great talent to your team.
  4. Focus on more impactful business activities and roles:
    In-house hirings need you to be accountable from start to finish in the hiring process. In software outsourcing, the vendor is responsible for the entire process, from hiring to delivering the output. In doing this, you leave yourself and higher-level managers free to focus on more impactful business activities, create a stronger client base and take your business forward in other ways. 

For business success, you should ensure that you choose experienced and credible software outsourcing companies that understand your business objectives and help you reach them using sound business practices and industry experience.