Why do companies outsource software development? As the usage of the internet grows even further, the number of digital products is on the rise. From small startups to global enterprises, companies need to stay on the top of the technological advancements; Produce and regularly update their applications to keep their brand relevant for customers. It requires a strong in-house development team with a wide variety of skills. However, not many companies can maintain an in-house team of highly qualified developers and specialists to keep up with competitors. Such companies can leverage the benefits of outsourcing software development, such as reduced costs, and access to niche expertise. Here are some of the main benefits and reasons why companies choose to outsource software development.
Reduce business costs
One of the main drives why companies turn to outsource is the reduction of costs. The difference between the expenses of outsourcing and developing software in-house might be enormous.
Usually, outsourcing companies offer three working and pricing models for software development:
- Dedicated team model
- Fixed price model
- Time and material model
Depending on the nature and scope of your project, one model can be more suitable for your needs than another. But all of them can help your company save a lot of money on software development without sacrificing the quality of the final product.
When you outsource software development, you avoid the following costs:
- Office rent
- Hiring HR professionals or/and IT recruiter specialists
- External and internal recruitment costs
- Employee retention activities
- Onboarding, training and educating new employees
- Employee benefits and taxes
Only these administrative costs can make up to several thousands of dollars in a year. Apart from them, there is a big difference between the salaries of software developers in countries like the United States, Canada, the United Kingdom, and Australia, compared to the Eastern European countries like Bulgaria, Ukraine, Poland and others, where software development companies are usually situated. For example, the average annual salary of a software developer in the USA is more than 100,000, while the median wages in Eastern Europe can be 3 or 4 times lower.
Outsourcing of software development services can help you reduce HR and administrative costs. The overall price of software development will be far lower than what you would have to spend with an in-house team while you will receive a service from the top experts in the field.
Save time on hiring
Software development is quite a competitive field, and the demand for highly-skilled developers is continuously rising. As a result, hiring a developer is time-consuming and expensive. Huge companies are persistently offering better and better working conditions and benefits to the developers to attract the brightest talents. It puts pressure on smaller companies and makes it hard for them to stay competitive in the recruitment scene.
The process of hiring a developer can take several weeks from opening the job to hiring and onboarding the professional developer. More often than not, companies do not have the luxury to dedicate weeks to recruitment, especially when the project is urgent, or when the developer from an in-house team decides to quit in mid-project.
The benefit of outsourcing software development is its pace and flexibility. It will help you save time and money on recruitment and fasten the actual development process by avoiding:
- The selection process of candidates that can last weeks.
- Conducting numerous interviews and background checks.
- Hiring the wrong person for a job and starting the recruitment process all over again.
- Time spent on onboarding and training of new employees.
- Search for new employees or/and suspending the project if the developer gets sick or quits.
When you outsource software development, you can avoid spending time on administrative tasks. While you will be still involved in the process of interviewing short-listed candidates and decision making, you can save a lot of time and use it on your core business activities. Moreover, outsourcing companies that offer software development services often have highly-skilled developers who might be readily available to start working on your project.
Gain access to tech-experts
Based on the software you want to develop you might need developers with different skill sets:
- Front-end developers
- Back-end developers
- Web designers
- Mobile developers
- Project managers
- Quality assurance specialists
It is just a small list of specialists you might need for your project, and you might have to hire more than one to complete the project on time. Not to mention the salaries, additional benefits and administrative costs, it might take a lot of time to form the team due to the lengthy recruitment process we discussed above.
Even if your company can afford hiring so many professionals, you might have to compromise the quality of developers or time of project delivery. Since, as we mentioned, it is not an easy task to find talented developers.
On the other hand, the outsourcing provider focuses on quality and ensures that developers selected for your projects are highly-skilled professionals with relevant education, knowledge, and skills. It is easier and cheaper for outsourcing vendors to acquire niche tech-experts that will ensure successful completion of your IT projects.
Decrease project risks
There are dozens of reasons why software development projects fail. Some of the reasons we can mention are poor planning and management, under-skilled developers and lack of the key talents, inaccurate estimation of a project timeline that results in delays and low-quality product, premature release and more.
It is almost impossible to avoid mistakes likes this, especially when software development is not a primary focus and expertise of your company. One of the main benefits of software development outsourcing is the reduction of risks related to the project.
Outsourcing provider ensures to recruit professional software developers that have experience in developing a similar software that your company desires. It also has a proven management system and workflow, correct cost and time estimation and creation of an accurate timeline that includes all necessary milestones. With the outsourcing partner, you will at least halve the project risks.
Benefit from technological advances
Another benefit of outsourcing software development is access to technological advances and best practices in the industry. Technologies are developing rapidly. There are new frameworks and new ways of creating better software or a feature. If you do not follow the development and best practices you might work on developing software for months or years and at the end, release software that is already outdated and is not performing well.
By choosing the right outsourcing partner, you can easily avoid cases like this. Outsourcing vendors, especially the ones that have comprehensive experience in software development and its own development team, work with the best industry standards and practices that ensure the success of your project.
Reduce the time of development
While outsourcing the development of software, you save a lot of time on recruitment and forming the right team. You also save time on the development process.
Some applications and software take months to be ready, while more complex ones might take years. As a company wishing to release new software, you would like to have it ready according to your business plans. You might come across with several issues:
- Lack of talent in your team that requires acquiring new employees in mid-project.
- Poor project planning and management
- Little to no experience in software development
- Lack of testing on an early stage of development, resulting in errors and bugs on later, in many cases, final stages.
The benefit of outsourcing software development is utilizing the outsourcing provider’s experience. Outsourcing will help you avoid these issues. On the stage of estimating the project, they know what skills and expertise to look for to develop your software, as a result, there are no surprises during the development. They have huge experience and expertise in planning and managing IT projects, are aware of pitfalls and know how to avoid them. Last but not least, they are focused on quality and matching the set timeframes for project delivery. They often go the extra mile to ensure that the software works and looks as intended and is released according to the plan.
Should I outsource software development?
Whether you have a single software project or thinking about outsourcing the whole software development team, outsourcing can be a beneficial decision for your business. Companies that want to develop single software can enjoy faster development, increased quality, decreased risks and low costs. Companies with an in-house development team can pass the non-core tasks to the outsourcing provider and focus their expertise on core activities.
If you’re interested to get a free consultation and learn more about how outsourcing can help your business, contact us. At Flat Rock Outsourcing, we will gladly answer your questions and provide a comprehensive consultation for your business.