The word “outsource” is quite the buzzword these days. While earlier, most organizations had to stick within their geographical confines to look for new talents. The situation is different now. Most businesses now tend to redistribute their projects to other cities and even other countries. 

Earlier, only companies within the IT sector favoured outsourcing, but now it is not limited to a single industry. Advanced technologies available these days ease daily operations and workflows for organizations in every industry. Now most companies prefer redistributing their services to competent developers in other countries. It also simplifies the hiring process and gives access to a worldwide pool of talent.

What is Outsourcing?

In simple terms, outsourcing is an agreement where an organization hires a vendor to complete a project or task. The vendor provides the organization with all the required resources, including tech tools, a skilled team, and a project plan.

Now that you understand what it means, let us get into why companies prefer this approach for software development. We will also discuss its pros and cons, and how to make it successful.

Why Outsourcing is Important in Business?

The rise in digital transformation has driven industries to develop better software solutions. The aim is to deliver high-quality products and improve their services. So, outsourcing software development has become more popular. Businesses across the globe are turning to third-party vendors to complete their projects and provide required solutions. Some of the major reasons for the rise in popularity of this trend are:

•       Resolution of capacity issues
•       Reduction of costs
•       Access to an international talent pool
•       Enhancement of service quality
•       Focus on core business needs, etc.

It allows medium-sized and small companies to access and hire professional teams of developers for reduced prices. This way, your in-house team can solely focus on your organization’s core activities and goals.

Outsourcing to other countries

 It has become a common practice to look out for outsourcing software development options overseas. The main reason for this approach lies in the reduced costs. Most organizations in developing countries offer their services for lower prices, but their services are of high standards. Also, some of these countries like India and Eastern Europe are famous for their tech education. They have reputed universities that train thousands of students and provide top-class tech education.

Outsourcing software development with quality assurance services to countries in different time zones is also an effective way to keep your company running continuously. It also offers agility, and the flexibility to complete the projects on time.

5 Factors You Need to Consider Before Outsourcing

Before you start working with another company on your project, consider the following things:

1.  Assess the workload: Find out the workload of your in-house team before approaching a vendor. It is necessary to maintain the spirit of your team within the office. Therefore, explain to your team why you need the extra help and roles each team in the company has to perform in the development process.
2.  Understand the project scope: prioritize tasks, identify the ones that can be excluded, or added later in the process.
3.  Outline deadlines and budget: before you plan to outsource make sure that you have a realistic and detailed plan of the project’s budget.
4.  Draft a list of possible options: create a list of possible vendors and study their portfolios, previous projects, and customer reviews.
5.  Examine vendor’s services and corporate culture.

Most often, these 5 aspects are overlooked, and only the cost of software development is taken into consideration. But for the successful completion of a project, make sure you consider these factors before you outsource.

Steps to Follow When You Are Outsourcing Software Development

1.       Specify your needs
2.       Determine the target offshore location
3.       Select the vendors and find out about them
4.       Select the right partner
5.       Choose the collaboration model
6.       Assess the employees
7.       Build good relations between offshore and in-house teams
8.       Start working together

Pros and Cons of Outsourcing Software Development

Just like with every other process, outsourcing software development also has its pros and cons. Here are the most important of those.

Pros

•       Access to better technical expertise
•       Cost reduction
•       Flexibility
•       Delegation of responsibilities
•       Reduced time-to-market

Cons

•       Lack of transparency
•       Miscommunication
•       Lack of labor control and quality

Major industries that rely on outsourcing

Earlier, the IT industry was primarily associated with outsourcing, as technology brands were looking for custom software development options. However, now there is a prominent shift in this way of thinking as other businesses across different sectors are trying to improve their processes and services.

For example, for a company specializing in mobile app development, it would be futile to create an in-house social media marketing team. However, leveraging the service of an offshore vendor specialised in such services can help you promote your brand through different social media platforms, and also make the best of your advertising campaigns through analytical tools. Multiple such services can be delegated to other companies so that you can focus on your core business. Some of the common tasks that are outsourced these days are

•       Marketing
•       HR activities
•       Administrative work
•       Customer support
•       Web/Mobile app development
•       Manufacturing
•       Web design

Companies of different sizes and from different industries tend to follow the process. Small and mid-size businesses usually redistribute their specific operations to experts who have all the required resources. This way, they can ensure that they save themselves from making incorrect decisions that result in significant losses.

How can you achieve successful outsourcing software development?

Several aspects affect the success of your project when you are outsourcing software development. In execution, the process might look easy. However, there are certain hidden points that you should consider in advance. They are:

·       Defining your goals

To stay one step ahead in the competition, you have to make sure that you have clearly defined your goals before you outsource.  These aims and objectives will help you search for the right partner and also ensure that the external team suits your requirements. What is more, you can communicate with the external vendor regarding your expectations and needs.

·       Outlining budget

Chart out the project plan and calculate the expected costs and budgets while taking into account the requirements of your core business as well. Ensure that you select a reliable vendor to outsource, which has a proven record of providing transparent services. A reputed vendor can help you calculate the costs and find the perfect balance between affordability and results.

·       Select the outsourcing model

Understand the special skills your company requires for the project. This will make it easy for the managerial team and HR to select the ideal model for your project (onsite, nearshore, or offshore). A well-defined model can also help you save a lot of time and effort. This way, you will reach the development phase faster.

·       Establishing Relationship

Effective communication is an absolute necessity when you enter into a partnership with another organization. Before you outsource, it is necessary to establish stable and cordial relationships with the vendors and understand that you share the same values and goals.

Wrapping Up

Digital transformation is an absolute necessity for brands to survive in this cut-throat competition. Outsourcing your software and mobile development needs brings numerous advantages for organizations outside the IT sector. However, before relying on a vendor to outsource your projects, make sure you have done your research. Choosing the right vendor along with effective strategizing can help promote your business services and also help you achieve your desired results.

Talk to our experts to find out more about outsourcing software development and how your business can benefit from it!