Technology disrupted most business models over the years, and that included the outsourcing market. Maintaining an in-house IT department can be rather expensive and for some businesses even inefficient due to high payment rates that only increase with employees’ experience.
It’s essential for companies to continuously evaluate and adjust the way they work towards a cost-effective, time-efficient, and operational business model. Outsourcing suits best those companies that want to focus on their core business activities and strategy. Besides that, it is an effective way to get high quality for reduced costs and in a short period of time.
A study from Deloitte showed that companies outsource software development with the following objectives in mind.
Reduce costs and overhead – 59%
Focus on business core competencies – 57%
Enhances capabilities – 47%
Critical to business needs – 28%
Access to intellectual capital – 28%
Organizations that outsource their IT have one thing in common, they seek the digital disruption that software can bring, and since these firms lack the internal expertise to make it happen, they turn to external experts focused on building a better digital tool.
In this article, you will learn the five most important reasons why software-dependent enterprises opt for software development outsourcing.
1. Reduce cost to reinvest your savings
An in-house IT staff is expensive, no question. As developers gain more experience, rates increase, and the staff becomes far too expensive.
Businesses cut down their development costs up to 70% when they turn to an outsourcing company. This impressive figure is simple to explain. When you hire outsourced teams, you reduce expenditures on employees’ hiring, onboarding, insurance, and retention programs.
By contrast, there aren’t many overhead costs involved when outsourcing custom software development to third-party contractors. Often, these vendors offer full-cycle development services at attractive rates. Outsourcing it's a long-term strategy with a fixed budget that allows you to explore cost-efficient strategies without compromising on quality.
2. Focus on your core competencies
To stay ahead of your competitors, you’ll need to innovate and grow fast. Doing this successfully means that you’ll need to concentrate on your key processes and business strategy, delegating all the associated operations outside your competence.
If your business isn’t a technology company it likely doesn’t have the internal resources to rapidly become one. This becomes clear when you consider why 57% of companies outsource, so they can focus on their core competencies.
The time saved on managing and hiring can be used to help you establish leadership in your industry—innovating and creating better products for greater customer satisfaction.
3. Enhanced Capabilities
Rapid IT industry evolution implies non-stop education and training. If you have an in-house development team, you should provide training opportunities for your employees to keep up with the technological advances and stay competitive.
Rates aside, software-dependent companies require a more knowledgeable workforce. Developers should be able to adapt to emerging technologies or keep their technical skills up to date.
Outsourcing companies are not just about finding eccentric tech skills. In many cases, your outsourcing partner will provide extra resources that organizations need such as Software Engineers, Scrum Masters or Software Testers. Plus, external minds with varied backgrounds and expertise levels allow for further innovation and drive the final product to heights beyond what an internal team can accomplish.
4. Business Needs
Businesses need to keep pace and remain competitive in an increasingly tech-driven business world. Two decades ago, it was about the need for having their own websites, then companies started rolling out their own mobile apps. Now, companies are looking for new ways to use and protect data, automate job functions, and more. A dedicated software development company can make it easier to plan for new technologies earlier.
Time to market is one of the key factors that determine product success in the market, therefore, the faster you present it to the end-users the more customers you can get. Outsourcing development teams perform strongly under tight deadlines as they choose well-experienced project team members, properly select development tools, and follow the principles of Agile methodologies.
5. Expanded Access to Intellectual Capital
Outsourcing for intellectual capital is another reason to outsource that can save years, tons of money, and a lot of headaches on many projects. You’re partnering with someone who has already done what you want to do.
Partnering with an outsourcing provider allows your company access to IT talents that have deep industry knowledge of complex technologies. Senior architects, UI/UX designers, and business analysts who already have the technical understanding, skill sets, and experience you need on hand so that your core team won’t go in blind. Plus, the best part of outsourcing is that you don’t have to hire these specialists on a full-time basis, only for the duration of your project
Project managers will do their best to form the most dedicated teams with the right skillset and pick up the most effective programming tools for your development projects. These teams usually provide a full-cycle software development that includes planning, development, testing, deployment, and maintenance steps.
Conclusion - Why Outsource Software Development
To achieve the benefits of outsourcing your software projects, it’s critical that you form and maintain a true partnership with your vendor and the software team. This requires consistent and open communication not hampered by time zones or language challenges.
Outsourced services are a great solution for businesses looking to save money and time, and to fill in their expertise gaps. It allows you to focus on growing your business while lowering your time to market.
We’d love to work with you.
We treat client projects as if they were our own, understanding the underlying needs and astonishing users with the end results.
5 Reasons to Keep your Outsourcing Close to Home
Nearshoring provides the same advantages as offshoring while avoiding many of the headaches that come with that form of outsourcing, since service providers, operate out of nearby countries.
Tips for Successfully Outsourcing Software Development
While cost savings was the most widespread reason for outsourcing software development, now, access to global talent is one of the main reasons why outsourcing software development.
Step-by-Step Guide to Plan an Effective Software Development Project
The best way to ensure project success is by coming up with a solid software development plan from the get-go.Not sure where to start? Check out our step-by-step guide!