Outsourcing software development is the practice of hiring a tech-savvy professional team to create custom software solutions. This software development model is gaining momentum because many businesses can’t afford to employ full-fledged IT teams. Hiring contractors allows them to cut costs, access unique expertise, and get more efficient technical solutions in a shorter period of time.
Outsourcing software development in figures
According to Statista, the software outsourcing market has been growing steadily over the last 18 years. Take a look at the chart below. In 2018, outsourcing software development companies generated about $85 billion in revenue.
We live in the era of the digital workplace. Gadgets and apps penetrate ever deeper into our business reality to simplify daily tasks and boost employees’ efficiency. That said, the above figures don’t come as a surprise. On the contrary, a current decrease in revenue is likely to revert in the future.
Yet, what can encourage businesses to outsource software development?
Let’s clarify this together.
1. Access expertise and build more robust tools
When companies face challenges, they know their problems in-depth but can have no idea of how software can help to tackle them.
To meet particular business requirements, developers need knowledge of certain technologies and languages, as well as an understanding of specific domains, like ecommerce, manufacturing, or healthcare.
Hiring such experienced pros takes a lot of time and can become a real headache for a business owner.
Why not turn to a freelancer? Freelance developers are not always as reliable as they seem at a glance. Besides, they can lack definite skills and competencies, which can lead to bugs and inefficient performance of your software.
In this regard, software outsourcing becomes a sound idea. A software outsourcing company gathers skilled teams from around the globe and thus can quickly find the needed specialists. As a business owner, you don’t have to look for particular expertise, hire, train, or guide in-house IT specialists. You just explain your challenge and let professionals solve it with powerful software.
2. Avoid the interruption of the working process
Collaboration with contractors allows enterprises to focus on their business goals instead of the development of an internal IT department. Besides, outsourcing software development companies are normally experienced in delivering similar projects. So, they can suggest how to implement the software with a maximum benefit for your business from the early stages, and with little to no interference in the staff work.
3. Decrease development costs
One more reason to outsource software development is to reduce the cost of labor. Oversees developers charge less for the same amount of work and the same service quality.
Besides, dedicated software companies employ large teams and thanks to the economy of scale can decrease the overall costs of your project.
Why would they? Well, the IT market is very competitive. While businesses have a wide choice of alternative options, software outsourcing companies reduce prices to win more clients.
4. Get a more scalable team
Software development is a multi-stage process, which can require scaling the development team up and down to speed up the software rollout or optimize costs and returns.
For example, if a competitor announces the release of a similar tool to the one you are currently building, you will undoubtedly want to be the first one to enter the market. This will take a snap increase of the development team.
Alternatively, when you are on a tight budget but have enough time, you can go with a smaller IT team. Only specialized outsourcing software development companies can offer such flexibility.
5. Minimize risks
Though technology is designed to improve business efficiency, it can also harm if coded improperly. Software systems store sensitive customer and company information, such as financial data or trade secrets. The leakage of such data can cost the owner money, reputation, and customer loyalty. That is why it is essential to check the security of custom software.
Outsourcing software development companies usually have dedicated specialists knowledgeable about software security. This way, they can guarantee a high level of your data protection against breaches.
6. Pay for maintenance only when it is needed
Nothing ends when the software is up and running. It still requires upgrades, performance checks, bug fixing, and sometimes new features. Instead of employing developers full-time, you can pay only for the hours that are indeed spent on polishing your tools and apps.
Besides, an experienced team of the outsourcing company is likely to fix everything faster than a single in-house developer.
7. Realize ambitious projects fast
If you have a software concept that relies on cutting-edge technologies and must be developed very quickly to win the market, you definitely need a software outsourcing company. They can quickly assemble a large team of professionals to design and code even a very sophisticated solution.
Depending on your budget, you can set limited timelines and still launch a viable product—an unreal scenario for an in-house IT team.
8. Expand an internal IT team quickly
Outsourcing software development companies usually offer several cooperation models to their clients: time and material, fixed-price or project-based, or dedicated resources-based contracts. The difference between these collaboration types lies in the calculation of a project’s costs.
For example, time and material contracts imply certain project requirements and fees per man-hour. The fixed-price collaboration is paid for the entire project once the goal is achieved. The dedicated resources model means providing particular specialists to fill the gaps in the client’s development team.
The diversity of outsourcing cooperation types allows businesses to pick the most suitable option depending on their goals, budget, and available human resources.
Afterword
Outsourcing software development is getting ever more popular with businesses as it allows implementing complicated projects within a limited timeframe. In addition, it brings in flexibility and lowers costs, as well as simplifies the management of the IT project for the client.
With such a variety of software partners to choose from, it can be a challenge to make the right decision.
Before you sign a contract, study the contractor’s portfolio carefully and check how quickly and completely they answer your questions—shortlist companies based on both their responsiveness and competencies.