If your organization is hesitant to try outsourced software development, it is helpful to understand the benefits that can be gained through software development outsourcing. More and more companies are outsourcing software development because it is an effective way to efficiently complete a software development project.
However, it is important to note that not all software development outsourcing is equal. There are several common approaches used by companies outsourcing software development. We will examine the popular outsourcing models offered by software development companies, but first, let’s cover the benefits of outsourcing software development.
The Top Advantages of Software Development Outsourcing
Outsourcing software development has become a popular option for businesses because of its advantages. It is important to note that there are many software development outsourcing companies, and each one will vary.
If you choose the wrong software development outsourcing company, you might discover that your software development project suffers, and as a result, the advantages listed here don’t apply.
The top advantages of software development outsourcing include the following:
- Cost savings
- Access to global talent
- Focus on core operations
- Always on the cutting edge
- Scalable
Cost Savings
The top benefit of outsourcing software development is the cost savings it offers. When your business decides to outsource software development, it doesn’t have to worry about hiring a full software development team, paying salaries, offering benefits, and more.
The hiring process itself can be costly and time-consuming. In addition to the savings achieved by avoiding this process, software development outsourcing is also more cost-effective because labor is typically done in another country with lower wage expectations.
On top of those obvious cost considerations, there are several associated costs that your business can also avoid. For example, when you hire a software development team, you must provide them with the proper equipment, development tools, office space, etc.
Companies outsource software development to avoid these additional costs and optimize their budgets. When your business outsources the software development process, it pays for the labor required to develop the project and nothing else.
Access to Global Talent
Outsourcing software development is beneficial because it gives your organization access to a global pool of development talent. Unless your business is a software development company, you probably don’t have a lot of development talent on staff.
Finding software developers to hire can be challenging, especially if your office is not in a large metropolitan area or you are looking for niche technical development skills. Software development outsourcing opens your business to global talent.
Outsourcing allows your company to hire the best developers worldwide to work on its software development projects. Building an in-house team of software developers can be time-consuming and costly, and you still might not find the right talent you need.
Focus on Core Operations
Unless you are a software development company, your core competencies will not be software development. Software development outsourcing enables your business to focus on the tasks it does best and have a team of experts to guide your project through the software development life cycle.
Businesses have a lot of different tasks to focus on. Managing the software development process and regular business operations is a lot to handle. Outsourcing software development takes this big task off your plate and enables your organization to focus on doing business.
Organizations with an internal development team can also utilize software outsourcing to ensure their teams have the time and resources to focus on the core aspects of their roles.
Always on the Cutting Edge
Technology standards advance rapidly. It is difficult for organizations to stay on top of all the latest technologies and development trends while running a business. Outsourcing software development ensures that your business is always ahead of the curve regarding tech innovation.
Software outsourcing enables your organization to leverage the latest tech innovations. A software outsourcing partner will constantly learn new things and stay updated with the latest advancements and best practices.
If you’re not a software development company, it will be difficult for your company to regularly learn new technologies and stay abreast of the latest innovations and development techniques.
Scalable
A great advantage of software development outsourcing is its scalability. When you have a large project to develop or high demand, you can access more developers and hire bigger teams. On the other hand, when things slow down, software outsourcing enables your business to scale back its team.
Businesses benefit greatly from the scalability of outsourcing. It is expensive to hire and retain employees. When there is a development project, you’ll require more employees than when the project is finished.
Instead of going through the time-consuming and costly hiring process to build a large team of developers that will be scaled back when the project ends, software development outsourcing enables your business to access the talent it needs when required.
The Common Types of Software Development Outsourcing
There are several models for outsourcing software development, but your business only needs to understand the most important four:
- Offshore outsourcing
- Nearshore outsourcing
- Onshore outsourcing
- Multi-shore outsourcing
Offshore Outsourcing
Offshore outsourcing involves hiring software developers outside of the country, typically on the other side of the world. For companies based in the United States, when we use the term offshore outsourcing, we are generally referring to outsourcing labor to countries like India or China.
Offshore outsourcing is the most cost-effective option, but it comes with a number of difficulties too. For example, it is far more difficult to communicate with offshore software development teams because they work in time zones that are more than a couple of hours ahead.
In addition, communication with offshore developers can be more difficult because there is less shared cultural heritage, and they might not speak very good English.
Nearshore Outsourcing
Nearshore outsourcing also involves hiring software developers outside the country, but they tend to be very close. For example, in the United States, nearshore developers typically work in LatAm.
Nearshore developers are more expensive than offshore developers, but they work in a similar time zone as your business, they share a similar cultural background, they typically speak fluent English, and if you need to meet in person, nearshore developers are only a quick plane ride away.
For these reasons, nearshore outsourcing is very popular with companies that want to save money by outsourcing but also want to communicate regularly and even meet in person on occasion.
Onshore Outsourcing
Onshore outsourcing involves hiring a company within your country to develop your software. For example, if your business is located in New York but you hire a development company based in LA, this would be onshore outsourcing.
Onshore outsourcing is the most expensive since wages will be highest in the United States, but if you have a specific vision or company in mind, this option might be the best suited to your organizational goals.
Multi-Shore Outsourcing
Multi-shore outsourcing involves blending multiple outsourcing models to meet specific goals. For example, perhaps your organization utilizes offshore outsourcing for one aspect of the project, nearshore for another more delicate aspect, and onshore for the most critical components.
Typically, only large enterprises will utilize multi-shore outsourcing. Companies this big might have separate outsourced teams working on entirely different projects.
Final Thoughts
Software development outsourcing is very beneficial to organizations. There are many good reasons to explore whether the outsourcing model is right for your development project. If you want to learn more about outsourced software development, contact an experienced software development partner like Koombea.
