Software development outsourcing explained. What are its benefits?

Software development outsourcing explained. What are its benefits?

Outsourcing software development has become extremely popular in recent years. According to research, the demand for such services will grow by 70% in 2023. It’s an effective alternative to in-house development. It offers higher value for money and a plethora of other advantages. However, many brands are still not aware of how exactly they can outsource IT services and where to look for a reliable partner. We share our expertise on that subject in this article.

Read on to find out what exactly is software outsourcing, what you can get out of it, and how to find the right software house to handle your next app or website project.

What is software development outsourcing?

Software outsourcing is a very broad term. It refers to the process of transferring software development, project management, and other related tasks to a third-party company, remotely or locally. This method of creating software products is so popular nowadays because of the significant benefits it offers. If you want to achieve major operational cost savings, shorten your solution’s time-to-market, as well as gain time and money to invest in other areas of your business – outsourcing software needs is the best decision you can make.

Outsourcing is a service offered by various companies called software houses. They hire IT specialists that can take care of every part of the project, from coding to handling tasks, quality assurance, and design. Collaboration with such a brand means you don’t have to take care of recruitment, onboarding, and HR-related matters. You come to them and tell them what you need. They propose a suitable plan with the right team, budget estimation, and predicted duration of the project.

What is the difference between onshore, offshore, and nearshore outsourcing?

The most common types of outsourcing are onshore, nearshore, and offshore. Each of these models has its own advantages and drawbacks. It’s important to choose the right option for your business. Let’s take a closer look.

Onshore outsourcing is when you outsource to a company within your own country. The main pro is that you can easily communicate and collaborate with the partner you choose. The biggest downside is that it can be more expensive than other options.

Nearshore outsourcing is when you outsource to a software house in a nearby country. It’s slightly less expensive while still preserving a chance for seamless cooperation. However, not every company has a lot of nearshore options to consider, or the providers located closer offer poor quality. That’s why it’s not as popular around the world.

Offshore outsourcing means collaborating with an IT company located in a different country or even continent. It’s definitely cheaper than staying onshore. However, if you don’t pick the right provider, it can cause many issues, including language barriers and lack of time synchronization. Still, it’s one of the most preferred outsourcing methods because usually, the benefits outgrow the cons. The choice of companies is limitless, which means you can pick the best software house that meets your needs.

The benefits of outsourcing IT services

Now it’s time to answer the question: why do companies pick outsourcing over hiring in-house developers? There’s more than one answer to that. Software development outsourcing advantages are alluring to all brands, whether they are small startups, medium enterprises, or big corporations.

Here’s what you should know:

  • Software outsourcing allows brands to significantly lower the costs of IT projects in many aspects. It decreases operational costs and requires less resources.
  • Hiring and maintaining an in-house IT department can be costly and time-consuming. Also, not every company needs a permanent software development team. Outsourcing IT services frees up your company’s internal resources. Instead of dedicating a part of your staff to handle software development or IT infrastructure, you can use these employees for other tasks that are more directly related to your company’s core business.
  • Thanks to outsourcing, you get access to a broad pool of talent. While working with a software house, the team composition can evolve depending on current project needs. You pay for the deliverables only.
  • You can also shorten time-to-market when outsourcing software development. That’s because the company you hire creates a dedicated team that is focused on getting things done within the deadline. Timezone differences can also play to your advantage. Bet on offshore outsourcing, and your team might work when you sleep. Hire them as your second team, and you get 24/7 technical support from both squads.
  • Software houses usually offer business consultations and workshops thanks to the expertise they gained over their years on the market. If you have any dilemma regarding your project, you can count on their suggestions.
  • With rapidly changing market conditions, it’s hard to readjust an in-house team whenever the scope of your project evolves. Outsourcing software development gives you higher levels of flexibility and the possibility to scale the solution at any point.
  • Outsourcing companies constantly invest in their employee’s growth. They introduce new technologies because they want to deliver robust, future-proof products for their clients. If you build a modern solution based on innovative frameworks, your company will gain a competitive advantage.

Are there any mistakes to avoid when outsourcing IT services?

As you can see, the number of benefits of software development outsourcing is enormous. They definitely beat the standard approach of hiring in-house programming teams. Now we will focus on picking the right partner and avoiding all the difficulties that might occur. Thanks to our advice, you can successfully go through the whole process.

When it comes to software development outsourcing, there are a few potential mistakes that should be avoided at all costs. Awareness and a proactive approach will help you eliminate them. Establish the rules of collaboration with your IT partner and give all the involved parties a direction towards a common goal to succeed.

Pay attention to these three things:

First, have a clear understanding of what you want from the potential outsourcing company. Before you reach out to a software house or even do your research to find out the right provider, think about your business objectives and how you want to achieve them. Analyze your competitors and take a closer look at your customers’ requirements. This way, you will help your outsourced team understand your brand and propose solutions suitable to your needs.

Then make sure you do a thorough background check on the companies you would like to collaborate with. Below, we discuss further how it’s important to pick the right brand you will work with and what to pay attention to. This step is necessary to avoid various issues and get a partner that will be able to deliver a viable software product.

Finally, be sure to establish communication channels and collaboration guidelines. They will help you stay on top of any problems or changes that need to be made. Of course, you can pick a provider that will not bother you, no matter what happens. However, that’s not the best idea if you want to get a final result that will meet your expectations. Being involved in the process is necessary for the team to understand your values and priorities.

How to pick the right software development outsourcing partner

Now it’s time to answer the ultimate question. How to find the outsourcing company that will create the perfect software product for your business? We’ve prepared a short guide to help you with this process.

A software house should have a good market reputation and a proven track record. How to find out if the company you want to collaborate with has that? There are a few sources you should check. Go to Clutch, which is the most prominent industry portal. Read their past clients’ reviews to see what’s their style of work and how they care for customer satisfaction. Then, check out their social media to find out about their overall vibe, recent projects, and internal atmosphere. Last, but certainly not least, go to their website. Scan through the portfolio and service pages to determine if this company could build the product you want.

Even if you have a few potential candidates, picking the one that is the longest on the market or had the biggest amount of clients is not what you should do. Choose the outsourcing brand that has experience in creating solutions you’re interested in. Make sure they have a strong team of developers experienced in the type of work you want to be done.

Don’t be afraid to ask questions.

Send emails, call them, or schedule an online meeting to discuss your requirements. This will be the test of the provider’s communication skills and responsiveness. You want to feel they are customer-centric from the first contact. If the software house reps are supportive from the very beginning, they showcase the potential for fruitful cooperation. After choosing the one provider you want to work with – it’s time to get the paperwork in order and begin the software development process.

Picking the right outsourcing partner can be challenging. However, if you keep our hints in mind, you should be able to find a company that will exceed your expectations. To be honest, you don’t even have to look too far. can be your reliable software house that will take care of developing your next app or website. – your to-go outsourcing partner

We are a software development company that has been on the market for 15 years. The core of our work is to help organizations from various industries achieve their business goals. That’s why we offer outsourcing services based on top technologies mastered by our IT specialists. Also, we believe that transparency is one of the crucial values we bring to the table. This means that each of our clients gets individual treatment from account and project managers.

Do you wonder how we can help you with your next software project? Don’t hesitate to contact us and let us know what you have in mind. We can definitely share our business expertise and give you a team of IT professionals that will work for you. Let us take care of your software needs. Find out how a seasoned outsourcing developer can be your partner in taking the next step towards technological innovation and growth.

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