Things to Know Before Outsourcing Software Development

When you think about outsourcing your software development needs to offshore talent, the picture in your head is probably less than ideal. It’s either people in anonymous masks and grey hoodies typing away nefariously on computers, making your code but planning it in a way to eventually harm you, or people in glasses, talking in languages you don’t understand, looking alien and foreign.

The reality of the situation is far from it. According to some research, the offshore software development market was worth over USD 333.7 billion in 2019 and is expected to rise to USD 397.6 billion by 2025. The reason that the market for offshore software development is so high is that countries all over the world — especially the USA — now recognize the huge potential to lower operational costs while still getting the same quality of work — or close.

Outsourcing your software development may not be as unheard of as previously assumed, with companies like Slack, Skype, and Basecamp using offshore software development companies to start their projects on a budget. In this article, we’ll talk about all the benefits you can get out of outsourcing your software development needs this way, while at the same time suggesting ways to address common problems faced in doing so.

What Does Outsourcing Software Development Mean?

Outsourcing your software development projects essentially means hiring another company, a dedicated software development team, or even a single person on a freelance basis to take care of all your software development for you.

Business practices like this have only recently started to be possible, thanks to the latest developments in technology. These have only been facilitated farther with even on-site teams forced to adjust to a completely remote work setup, with all collaboration between team members and employees happening online.

While various companies were previously not suited to this kind of work, many are now finding that it fits perfectly well with the way their organizations now operate.

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Pros and Cons of Outsourcing Your Software Development Projects

Companies aiming for business growth these days often find themselves face to face with the inevitable prospect of having to upgrade the way they do business. They find that they can only bring about true business growth with the help of the right software and technology integrated into their business model, whether for internal processes or to provide competitive services to the end consumer.

The decision to do this, however, can put your organization on the brink of bringing about many operational changes that are either too expensive or that you feel your business just isn’t ready for. You don’t need to let internal problems stop you from taking your business to the next step, though.

Pros of Outsourcing for Your Business

Hiring Local, In-House Talent is Expensive: The process of hiring a whole IT team can bring about many unexpected and unplanned-for financial expenditures for your company. You might need to hire a talent hunting or recruitment agency to find you the right candidates, then need to rent premises for your employees, spend money on their social security, and much more. Not to mention that the hourly wage of a full-time, senior-level IT executive is not low. All these problems can be solved easily by hiring another company to take care of your software development needs for you.
Faster Turnover Time: Once your offshore software development team is ready, you can have a finished product in your hands fairly quickly — definitely in less time than it would have taken for you to have it done internally.
No Training or Admin Costs: When working with an external software development team, you can forget about having to train them or incur any overhead costs on them. The company or team you work with will be able to give you an overall price for the project or an hourly rate and estimate. You can confidently plan your expenditures around that estimate, and there is no need to factor in any additional costs unless the developers need to work overtime due to some issue on your end.
Opportunity to Enter Into Global Markets: When you hire and work with an international team, you’ll get the opportunity to interact with people from a different culture and society. This doesn’t always have to be a problem. Working with a new team can give you the insight and cultural exposure you need to launch your brand to global markets.

Cons of Outsourcing Your Software Technology Needs

Security Risks: The biggest concern many organizations have when working with external teams is data security. Working on developing a piece of software for your business will lead to the team gaining access to a lot of information about your business. That information falling into the wrong hands might have catastrophic results for your business. Issues like this can be easily remedied with the help of NDAs and other legally binding contracts between the two parties doing business with each other.
Communication Issues: Cultural differences are hardly the most of the communication issues you’ll have to face while working with a software development company. You may also face unforeseen difficulties because of timezone differences. Organizations now, however, are more prepared to deal with the challenges that come with working with off-site employees because of pandemic-related restrictions.
No Quality Assurance: Most companies feel like no matter how much they look into an offshore company’s credentials or reviews, there is no way of knowing for sure what quality of work they’ll get back. Many people believe in the phrase “you get what you pay for” and are skeptical of companies and individuals asking for less than half the pay anyone from the local market would. That’s where factors like the exchange rate, the job market and price where the company is located, and other variants come into play. In South Asia, for example, the cost of living is lower than that in the USA, and a monthly salary over $700 is seen as a great package for full-time IT specialists, while the same can’t be said for developed countries.
Need to be Involved: The number one issue many software companies have with their clients is a lack of communication and involvement in the process. That lack of direction has developers scrambling and guessing at the company’s requirements, which will only lead to unsatisfactory results for your organization. On your end, though, there is a desire to be able to pay for a piece of software and get it after a certain amount of time without too much hassle. Finding the right balance can be hard and is currently the biggest reason why people are so against the idea of hiring offshore software development talent.

What Would be the Right Approach?

Given all the pros and cons listed in front of you, it’s not easy to reach a conclusion straight away. The idea of hiring an in-house team, while more expensive and time-consuming, offers you more control over your project. It also ensures that you get the high-quality software you want, while keeping most factors within your control.

On the other hand, offshore software development gives you limited control over the quality and seems risky at best when it comes to data security. But maybe there’s a compromise you can reach — if there’s anything an astute businessman knows, it’s that there aren’t always just two ways to do something.

The best approach to take here would be a hybrid model of software development, where you hire freelance talent or employ the software development tools companies like ours have to offer, but hire a full-time project manager, or assign an existing one, to oversee the project’s progress and make sure everything is going according to your requirements.

This way, you get the best of both worlds. A solid software designed by a team of talented yet cost-friendly experts, yet the project management remains in-house.

Best Practices

Sometimes entrepreneurs make mistakes and overlook some important things, which only makes the job of the software development team harder. Here are the things you can do as their client to make sure you get the best results.

Make Your Expectations Clear

When you tell the team what you want, make sure you’re not being vague. Instead of going to them with a brief like “I want the program to be able to help my employees work faster”, tell them exactly what you need: “I want a program that can streamline workflow in the office and help different teams assign projects, update the status of ongoing projects, and help each employee in the team know exactly what their task is.”

Know What You Want

If you go to a software development team when you’re still unsure of your software requirements, you’ll only have to pay extra fees in terms of overtime and revision fees. This is a hassle, not only for the team but also for you.

Follow Up and Stay Involved

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Conclusion

In the end, it’s essential that you closely consider what approach would be the best for your business’s growth. You and other entrepreneurs need to take into account existing trends within the industry, and if it’s a good idea to go with those trends or not. You should also consider where current technology is headed. Do the trends point to the kind of software technology you want soon being outsmarted by something new, or is it here to stay and worth investing in?

Once you have the answers to all these questions you can go ahead and hire the dream team for your new software!