How Software Outsourcing is Influencing Digital Transformation

Gimena Aguerreberry
June 16, 2021

The continued growth of digitalization requires global companies to respond faster, collaborate more, and overall be more efficient. Adding the ongoing Coronavirus pandemic to the mix has given organizations a push to accelerate their digital transformation and change their business models and adapt to the new market reality.

Software development outsourcing has most definitely not escaped the impact of COVID 19. But the situation we found ourselves in is quite unique compared to many other industries.

In many ways, software development outsourcing is not one of them. As a matter of fact, we have observed an increase in demand for IT services. It’s not surprising, considering how many companies view the online world as a place they can escape to with their business.

Nowadays, digital transformation is a must for all businesses, from small to big enterprises. As companies are searching for cheaper, faster, and effective ways to achieve digital transformation, software outsourcing services can be a game-changing factor.

Businesses are getting continuously readjusted to become more agile and innovative while creating more opportunities in today’s digital economy. This stands especially true for upcoming companies who are running on limited budgets where they need to think ahead of their limits to figure out additional resources to fuel their digital transformation.

Many business leaders see software outsourcing as an effective means of maintaining a balance between constant budgetary constraints and digital transformation needs. But what are some of the most prevalent outsourcing trends that can help empower the digital transformation of your business?

What is Digital Transformation and why is it Important

Digital transformation can be understood as the changes that digital technology causes or influences in all aspects of human life. From a business perspective, companies are required to react to the increased digitization and to adapt accordingly. The resulting digital business transformation represents the idea of creating new or adapting existing

business models based on the increased digitization within society, such as the usage of mobile devices, social media, and the Internet of Things.

To be successful on the market, software companies often try to respond to digitization with changes of the development methodology. For example, agile development is widespread today. But, the increased digitization requires more than focusing on the development methodology.

It is more about the attitude when developing software and the necessary mindset and environment. It is about the roles and their responsibilities during the development. Digitization requires us to deal with the upcoming changes, such as the increasing technology heterogeneity, instead of trying to avoid them.

Digital transformation is rapidly changing the world in which we live and work with no sign of slowing down. With new technologies comes new markets that, in turn, create new competitors and possibilities. Simply put, to succeed in this digital world your business must provide superior experiences for your customers and employees in a faster, more agile way.

Digital transformation is not just about adopting new technology. It is true that the focus of every business owner is to stay on top of the game in terms of new technologies, but a digital transformation also entails significantly changing how an organization thinks. It requires businesses to change leadership, think differently, experiment with new business models, find new revenue streams, and be comfortable with change.

Software outsourcing is no longer perceived as a choice or a strategic decision but it's an operational duty of the IT leaders to transform their companies. Software outsourcing businesses adapt better to the evolving digital landscape.

Competitive Advantage

Every day, a considerable number of tech-oriented startups enter the market and hence require highly specialized skill sets to stay above the competition. To combat the increasing difficulties of figuring out the expert help locally, businesses are turning towards less dynamic regions for their needs of software outsourcing.

Disruptive Technologies

Technology is blurring the lines between our digital and physical worlds by helping companies bring the most advanced solutions to the fields of business automation, customer management, risk, and so much more. Incorporating these technologies into an existing business structure requires expertise, and hence the software outsourcing companies are helping other businesses by assisting them to design, maintain and test their software application and solutions.

Mitigate Risks

Attempting to transform your business process for the first time can be very challenging. Having a skilled outsourcing partner who has helped many other organizations go through a similar transformation will make you feel much more confident about your company's transformation. This way you not only get cost savings but also reduce the risk that comes from missteps or unforeseen complications.

By having an outsourcing provider, you will eliminate the need for investment in infrastructure. The outsourcing partner will take responsibility for the business processes and will provide the necessary infrastructure.

Challenges in Digital Transformation

With the digital transformation, new challenges arise that have to be

considered by software companies.

Reduced Time to Market

New innovations are expected by the customers to be available as soon as possible, so the time to market has to be reduced. This applies to completely new products and new features for existing products.

As a result, software developers and companies have to prepare their development process in a way that allows them to deploy new functionality continuously.

Flexibility and Agility

The reduced time to market requires software systems to be flexible enough to consider new requirements afterward.

Furthermore, the high competitive pressure requires replacing originally planned features with other ones. Thus, if not already done, the development process has to be agile to react to changing requirements.

Business Awareness

One central idea of the digital business transformation is to consider and leverage the increased digitization within society to create new business models. Product innovation has become crucial for sustained growth, competitiveness, and moving up the value ladder. As innovations require technological knowledge, the creation of business models is not a pure business task any longer.

Developers within a company are required to think more business-oriented and to think outside the box. On the other side, the management is required to support developers in this task. This requires on the one hand

freedom to give new ideas a trial and on the other side to open up to new ideas from developers.

Conclusion - How Software Outsourcing is Influencing Digital Transformation

Digital business transformation can be understood as the idea of creating new or adapting existing business models based on the increasing digitization within society. As these new business models influence the way software systems to have to be developed, software developers and companies have to adapt to these changes.

In this digital era, more and more companies are looking for smart solutions for their business – like artificial intelligence, machine learning, IoT, or cloud computing. These technologies are helping businesses to bring highly advanced solutions to the fields in terms of automation, customer management, risk, and security orchestration. Incorporating these emerging technologies into an existing business structure often requires outside expertise. An outsourcing partner provides you vetted experts who have hands-on experience in technologies critical to digital transformation.

"How Software Outsourcing is Influencing Digital Transformation" by Gimena Aguerreberry is licensed under CC BY SA. Source code examples are licensed under MIT.

Photo by Nubelson Fernandes.

Categorized under software development.

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