8 reasons why outsourcing software development can work

“The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.” — Azim Premji

Software Outsourcing is the new normal. It is basically an arrangement made by a business to hire an outside software contractor to do the work that could have been done in-house. But, developing a complete software application in-house demands both money as well as time. Outsourcing software development helps businesses achieve greater economies of scale (a proportionate saving in costs gained by an increased level of production) and also focus on their core competencies without spending ample money or time.

According to the Information Services Group, when focusing on contracts with a total value of more than 25 million U.S. dollars, the annual global revenue from information technology outsourcing is estimated to amount to between 60 and 70 billion U.S. dollars. Let’s see what are the benefits of software outsourcing and how it holds the key to revolutionize your business.

Why Outsource software development?

[1] Access to a larger talent pool and the latest technology

One primary reason why companies outsource software development is exposure to global talent. Also, because expertise in every skill and technology cannot be demanded in-house. With software outsourcing, businesses get access to skilled workforce all over the world, thus expanding their technical capability and horizon. And it also means being relaxed. Everything from development to deployment is taken care of by the outsourcing team without any need for additional training or guidance. This increasing exposure to talent due to software outsourcing, result in a competitive advantage for the company.

Read More: What to keep in mind while selecting your software outsourcing partner !!

[2] Increased Focus on Core Business

Survival of the fittest! Remember? In today’s times, businesses have to find ways to innovate and expand in order to survive their competition. Outsourcing software development improves concentration on strengthening other core processes. Software outsourcing also helps to free up and allocate more resources to other processes that help make the business tick. It also doesn’t overwhelm your in-house staffs with work that doesn’t match their skill level, further allowing them to focus more on strategic goals in alignment to the business.

[3] Cost savings

Companies can save 30% on operating costs by outsourcing their software development! When you are running a successful business, the carousel (of spending, mostly) never stops turning! When you outsource software development, there is a considerable difference in wages in developed and developing countries. So, outsourcing software development to developing nations results in greater economies of scale and makes it cheaper for a firm to outsource software development and operations than to carry it in-house.

Read More: How Software Outsourcing helps reduce custom software development costs

[4] Better Risk Management

When investing, we generally are advised to diversify our investment portfolio rather than put all the money in one place to reduce risk. Same with software outsourcing. Software outsourcing is volatile and effective risk management to reap the absolute benefits of software outsourcing is critical to an organisation’s long-term viability. Splitting components and operations amongst different vendors help mitigate risks. Do your due diligence, talk to the vendor’s existing clients, rate their previous experience and then decide. Always remember, the key to a successful software outsourcing relationship is “outsourcing transparency,”

[5] Accommodate peak loads

Every business has times when their demand is at the peak. This means re-distribution of available in-house resources to operations and processes they are not specialized in. Or this means hiring new employees. Both results in higher costs and a decrease in efficiency. With software outsourcing, you can just hire a scalable team for just the peak period with absolutely no commitment. They help balance the workload, saving big bucks and at the same time increasing efficiency.

[6] Better Security

Assuming that your in-house team doesn’t specialize in IT, there are pretty good chances that your software’s security is not in safe hands. Security flaws will put sensitive information about the company at risk. Outsourcing software development will give you better coverage against IT security breaches. The software team will ensure that the code and processes that go into developing applications are as secure as possible.

[7] Spend Less Time on Support

Software needs regular maintenance and support. So, you need a dedicated team to take care of the ongoing bugs and modifications. Software outsourcing means you are already paying your software team for maintenance. Also, if you are really lucky, there is a significant time-zone difference between you and your software outsourcing vendor. This is an advantage as it helps your business get the benefit of round-the-clock business operations.

[8] Reduce time to market

Businesses globally have recognized the need for speed and how it can be used to leverage competitive advantage. With software outsourcing, you don’t need to depend on your available in-house resources for the product launch. You can actually dictate the timelines in accordance with your schedule and will have dedicated developers at your service accordingly.

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Software outsourcing maximizes flexibility. The benefits of outsourcing software development are many. Outsourcing software development is a great option to obtain digital transformation and growth through innovation while reducing risks and increasing profit simultaneously. It also helps businesses obtaining competitive advantage without losing focus and efficiency. Looking forward to Software Outsourcing? Take a look at the BinaryFolks’ approach to Software outsourcing here.

8 reasons why outsourcing software development can work was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.

Publication date: 
01/17/2019 - 06:11
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.