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8 Advantages of Outsourcing Software Development


Published on: 04 Sep 2020

By Praveen Kumar 

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8 Advantages of Outsourcing Software Development

Outsourcing software development is a practice widely in use by companies to stay competitive, become more agile, and to improve their performance. Rather than building in-house expertise for a specific project, you can chose to partner with an outsourcing software company that can turn your idea into a great software product.

There is an increasing number of areas where companies look to innovate, namely Information Technology, customer experience, and data security.

Your business needs a trustworthy partner with whom you can share the workload and from whom you can borrow skilled resources & capabilities to achieve your long-term strategic goals faster.

Why outsourcing works and why you should consider doing it?

Here are 8 major advantages to outsourcing software development.

1 Cost reduction

By outsourcing a software project rather than trying to build expertise in house, you can improve your business’ ROI while keeping costs low. Deloitte’s Global Outsourcing Survey from both 2016 and 2018, found that cutting costs remains an important reason why companies outsource.

To run a new development project, you need to put together a highly skilled team of engineers. This means you’ll need to go through a long, complex, and thorough hiring and training process, which can be very expensive. Of course, this also comes with no guarantee of the delivery capabilities of the assembled team. Are you willing to take this risk?

When you hire an external team, you just need to do your due diligence of the company’s capabilities, and not have to worry about either hiring specialized professionals or incurring costs related to that effort.

2 Time saving

Besides saving you money, outsourcing your software project will save your company time.

Here’s how.

Two of the biggest challenges with the talent acquisition process are:

  • Finding qualified, experienced hires takes time. The average US employer spends about 24 days to hire a new worker, according to Glassdoor.
  • Onboarding employees and getting them to a stage where they can be productive takes time as well. It takes about 3 months to onboard a new employee. Add the training to the onboarding process, and several months can easily go by without much ROI.

When you outsource your software development, you gain instant access to an already trained team with a wide range of skills. Although, the team dedicated to your project will spend a bit of time getting to know your business, it won’t need to go through a long and expensive training as your employees would.

Also, by agreeing to a suitable engagement model with your service provider, you have full control over the level of control you want to retain on your project. Whether you choose a fixed cost model, time & materials engagement, or hire a dedicated software development team, this time saving will free you up to fully channel your own time on more innovative initiatives.

3 Access to specialized and qualified professionals

Companies invest a lot of resources to put together a strong in-house development team. But, when it comes to software development, you need a highly specialized team. This team has to be able to carry out the project at a speed and meet quality standards that match your investment.

An outsourcing software company is usually a hub of highly qualified professionals. They have the necessary knowledge and expertise to start working on your project right away. You’ll have access to top talent that otherwise would take ages to find and hire.

4 More focus on core competencies

According to Computer Economics, in 2020, about 60% of companies outsourced at least some of their application development, compared with 56% last year.

Companies also choose to outsource because of the need to focus on their core business functions.

Instead of engaging your in-house team in software development projects for which they may not be prepared, use professional outsourcing services to build your software system. In the meantime, channel your team’s focus and skills on strengthening your company’s core capabilities, because that is what your team does best. This will eventually drive long-term growth for your company.

5 Higher efficiency

It’s not uncommon for companies to having competing objectives to meet within a compressed time frame. For example, you may have a mandate to a) launch a new product to improve customer experience, b) develop a dashboard to have a better overview of your business performance, and c) improve IT security – all at the same time.

It’s not a matter of whether you can manage to achieve all these goals. It’s about achieving these goals in a timely manner, which is crucial in any business in any industry. Agility gives companies a competitive edge and is sometimes very critical for them to stay relevant.

McKinsey has found that “externally sourced innovations are typically commercialized 40% faster than home-grown ideas, often because they have already been partly validated by the supplier.”

Having an outsourcing software company as a trusted partner can help your company speed-up the software development and take the weight off your team’s shoulder while preserving your business focus.

6 Harnessing potential of New Digital Technologies

Whether it is to an offshore, onshore, or near-shore team, by outsourcing your software project, you’ll reap the benefit of partnership with a large team of technology experts with experience on cutting edge technologies that your team does not need to master.

This can bring a whole new range of advantages, both financially and in terms of future scalability thereby elevating your project’s value to your business.

7 Less capacity risk to manage

Markets shift all the time and their dynamics are sometimes unpredictable. To make sure your company stays on track, it’s wise to have your in-house development team available for unexpected events and to manage core day-to-day issues.

If your team has their hands full with day-to-day production issues, it will put new development projects on hold, and sometimes indefinitely..

It is smart to mitigate this type of risk by offloading your workload to an outsourcing services provider. This type of partnership will guarantee that your projects stay on track while ensuring the stability of your existing business.

8 More flexibility & better processes

Collaborating with an outsourcing software company means using software development methodologies that have stood the test of time.

You don’t need to come up with methodologies from scratch. The service provider already has a set of workflows, industry best practices, and collaborative ethics they adhere to, that will ensure the success of the project.

You just need to set aside some time to work on the up-front planning based on what your technology partner offers to finalize what suits your needs best.

As detailed above, there are several advantages to outsourcing your project. With the exception of projects of national importance and defense related software projects, all other projects that can be outsourced will eventually get outsourced.

Praveen Kumar  Praveen Kumar