As the market grows more competitive and complex, organizations have to leverage technology-enabled services to become more efficient, effective, and flexible. As a result, outsourcing software development is becoming an increasingly popular and viable option.
In fact, according to Statista.com, the global revenue of the IT outsourcing market will amount to 386 billion U.S. dollars in 2019.
As over 70% of companies outsource to reduce costs, it’s only natural that many are wondering what the other benefits are.
What is Software Development Outsourcing?
Software development outsourcing involves the transfer of certain IT functions to external suppliers or service providers. These providers can be overseas or local companies that offer their expertise and services for a set fee.
Cost Reduction
The main reason for outsourcing is cost reduction. While this may not sound like the noblest of reasons, it is a very real and quantifiable benefit. Software development companies often have a lower cost structure in their home country than in the US or Western Europe. In addition to labour costs, they also enjoy other benefits such as lower office space costs and lower cost of living.
The additional factor that makes outsourcing so attractive is the exchange rate between countries with large software development talent pools and the US or Western Europe. The exchange rate can make it possible for the US or European company to pay less than half of what they would pay to a domestic developer while still paying a very attractive salary by local standards.
Reduced Risk
The third-party software developers are specialists in their fields, with many years of experience, who have already provided many projects that you can check before you decide to hire them or not. You can read reviews from other clients, and make sure that they are reliable and trustworthy.
If you outsource a project to an insecure vendor, it might become a target of cyberattackers looking for sensitive data or simply wanting to sabotage their competitors. However, if you collaborate with a reputable vendor that takes all the necessary measures to keep your data safe, this risk is virtually eliminated.
Access to Talent
Hiring new talent can be a challenge in any situation. It requires extensive time, energy, and resources that could be better spent elsewhere. By outsourcing your software development needs to an experienced team, you can eliminate the risk of hiring incompetent talent, focus on your core business processes and leave the rest to professionals who know what they’re doing.
Reduced time-to-market.
With in-house teams, there are many factors affecting the release date of a project – a lack of specialists or delayed tasks within other projects. Outsourcing companies can provide the team that fits your project requirements and start working immediately when your internal specialists are busy with other projects.
Focus Towards Critical Aspects
The ultimate purpose of outsourcing is to focus on the core competencies and business aspects of an organization. By outsourcing software development, businesses can focus on the most critical aspects of their business. This allows them to concentrate on their main products and services, which translates into better quality and more efficient performance.
Access to skilled resources
Software development is a specialized area that requires highly skilled resources and expertise. Outsourcing software development gives you access to skilled resources and expertise at an affordable cost.
Access to New Markets
As companies grow, they want to expand their horizons by entering into new markets or developing new products or services. Outsourcing software development can help you in conquering new markets.
Conclusion
Outsourcing your software development project comes with many advantages. But it is also important for you to thoroughly analyze the company before collaborating with them. You must look for their work culture, expertise level, co-operation flows, and approaches. With careful consideration, you can foster a long-term business relationship that could take your business to new heights.