Software Outsourcing: Pros and Cons
Outsourcing software development is a common method for building high-quality software products faster. The primary reason for this is to reduce business expenses. According to Deloitte 2020 research, 70% of companies choose outsourcing to save money.
Despite this considerable value for all businesses, there is another factor that makes outsourcing so popular today — due to lack of specialists. By outsourcing, you save time and get results faster by involving the most innovative technologies and top engineering talent from around the world.
In this article, we’ll discuss when and why you should outsource technical requests to experienced development partners, as well as the pros and cons of outsourcing software development for businesses.
Outsourcing Software for Complex Digital Transformations
Digital transformations are complicated and time, money, and effort are all required for complete success. Digital transformation occurs throughout an organisation, not just in one department, resulting in new forms of communication, a higher level of unity, and a more robust company culture. As a result, efficiency and productivity improve. According to an International Data Corporation (IDC) report, global spending on digital transformation technologies and services is expected to reach $6.8 trillion between 2020 and 2023.
Outsourcing software development is a common part of such a transformation, which is expected to grow in the coming years as organisations come to grips with their digital transformation priorities. Traditionally, organisations chose to outsource software development to improve their digital transformations primarily for cost savings. This reason, however, is no longer a top priority. Instead, today the strategy is focused on gaining access to the most cutting-edge technologies and top engineering talent.
What exactly does software outsourcing mean??
First thing’s first – Let’s define software outsourcing for better understanding:
Outsourcing software development involves handing over the task of creating a software product to another company, such as a consulting firm or an agile project delivery company. Software outsourcing is the practise of delegating coding to an outside vendor rather than employing an in-house team. Companies prefer to outsource for a variety of reasons, including the vendor’s credentials, a better tech stack, the use of cutting-edge technologies, domain expertise, technical experts, and process management. All of these are required for digital transformation in business.
This leaves business owners to focus on the core activities around their business, and helps them to avoid time-consuming challenges of training or hiring staff internally.
But as with everything, there are pros and cons to software outsourcing. Here we look at the advantages and disadvantages of outsourcing software development.
Advantages of Outsourcing your Software needs
1. Better manage costs, predictable billing and potential savings to be made
Outsourcing software builds will allow business owners a degree of cost control. The biggest reason why companies chose to outsource in the past was to save money. A business can control engaging a company for shorter periods of time and only when they need the services, thus avoiding major investments in infrastructure, personnel or tech stacks.
2. Better workflows and processes
Since the outsourcing company has most likely collaborated with a variety of clients, it can frequently implement processes that have been proven to work in a specific industry.
Partnering with an external software team means the whole process of product development gets optimised. The company can hire a team quickly and add and remove personnel as required.
You can also take advantage of their effective team management and systematic control over the whole process. By delegating the workflow to a responsible project manager by partnering with an IT service provider you will free up time for other activities while staying up to date on the entire team’s workflow and progress. This can also ensure quicker time to market because the outsourcing company can manage and optimise the workflows based on experience and best practice.
3. Benefit from a scalable development process
Because the scope of a project may change during the development phase, either increasing or decreasing, agile project delivery makes it simpler to make changes. An outsourcing software development company like Digital Dom can provide enough technical staff to meet your project’s requirements or quickly reduce the team at your request.
Outsourcing companies tend to have larger talent pools which allows us to help your business scale projects more quickly than if you were to keep them in-house.
4. Access to top talent by outsourcing software needs
One of the best things about outsourcing software is that it provides your company with the chance to pick a partner with no geographical constrictions. Outsourcing firms are known to have access to a wider talent fool and unique talent from industry experts to discuss software solutions with. Increasing number of companies are opting in to build a near shore team as their primary delivery model. Distributed Agile is widely practiced due to seamless collaboration among co-located teams working within the same time zone, as well as cost efficiencies resulting from reduced overhead and lower service fees. While we are headquartered in London, we have fast growing near shore talent pools in Poland and Romania.
5. Benefit from agile project management and delivery
At Digital Dom, we offer full stack mobile and web development services based on agile practices empowering organisations with tools and processes for a truly enterprise-wide transformation. Agile principles are important for successful product development. We ensure high-quality software delivery using efficient management practices, better communication and a well-organised process which ensures continuous product improvements based on feedback.
Outsourcing benefits from an agile project management approach, which divides the process into sprints. Each sprint lasts about two weeks. It is usually the time for developing a new product or a functional component. At the end of the sprint, each component is demonstrated. The approach enables you to quickly monitor the progress of project components and make changes as needed during the development phase.
6. Quality control by your outsourced software company
Outsourcing software will give you high-quality services for a robust product launch. Dedicated quality assurance engineers will test and debug any written code to ensure preferred functionality according to the brief and the requirements.
From our list, it is clear that there are numerous benefits to outsourcing your software needs. But a list isn’t complete without weighing up the possible cons too. So here are some of the constraints to software outsourcing to consider:
Disadvantages of Software Outsourcing
7. Communication problems
When dealing with offshore firms from different cultural backgrounds, this can happen. It might be because the team have inadequate English Language level, so it’s important to check you are able to communicate with them properly prior to engagement. The second issue around communication can stem from working with different time zones which poses an issue for remote cooperation.
2. Security Challenges
To reduce the security risks associated with outsourcing, it is preferable to conduct proper vendor research, contract with a vendor who has a clear approach, and establish transparent cooperation. Examine the vendor’s portfolio, business ratings, and domains of expertise. It could be the foundation of your successful collaboration.
If you feel vulnerable, you can mitigate the risk of data leakage by contacting and signing an NDA with a partner company. Don’t forget to discuss data security, legal issues, property rights, and any other issues that need to be resolved with the company representative as early as possible.
3. Unexpected costs due to scope creep
Although outsourcing is more cost-effective than hiring an in-house team, sometimes you might be surprised to see unexpected costs. To save yourself from this issue, work with an agile company, who prioritise effective planning, managing and contracting. Also, it’s important to sign a detailed contract with clearly defines scope of tasks, product requirements and responsibilities of each party.
Digital Dom – Your Trusted Partner for Outsourcing Software
Companies considering outsourcing must carefully weigh the pros and cons before deciding if it will benefit their business. Digital transformation is an investment, but the associated costs, whether in-house or outsourced, will produce substantial returns in efficiency, customer loyalty, and speed, allowing a business to be more successful and profitable.
The benefits of outsourcing software development to Digital Dom include agile project delivery with access to a broad consulting package and a full-cycle software solution. It involves collecting requirements, estimating tasks, designing, developing a project delivery plan, providing development services, and providing software maintenance and support. We will help you unlock the value of speed to market through technology outsourcing.
For more information on how we can help, speak to a dedicated member of our team by filling in the form on our ‘Let’s Talk’ page, or email email@example.com.