With the COVID-19 pandemic, the need for software development has increased in many industries, while most businesses strive to reduce costs on it. Though the interest in outsourcing software development has grown due to the possibility of significant cost reduction compared to hiring an in-house team, it’s essential to understand how it works and what things to consider when choosing an outsourcing software development company.
What Is Outsourcing Software Development?
Businesses often need to transfer software development to other organizations for several reasons. Some may have no or not enough resources to do it in-house, while others prefer to outsource software development to stay focused on core business tasks. No matter why they may opt for outsourcing services, they transfer a certain level of responsibility for software development to third parties.
This type of hiring a remote team is often associated with outstaffing, which is quite different. So, let’s find out this difference.
Outstaffing vs Outsourcing: How Are They Different?
In the IT industry, both outstaffing and outsourcing stand for remote employment, where a company brings to bear appropriate expertise from third parties to deliver a software development project. Nevertheless, they imply the engagement models based on different levels of responsibility for both parties.
When customers opt for IT outstaffing services, they expand their in-house teams without handling administrative things that an official employer usually performs such as paying salaries, bonuses, vacation pays, providing equipment, etc. All these things are managed by an outstaffing provider while staff resources are dedicated to the client’s project needs. The same works for an outsourcing model. But what’s the major difference when comparing outstaffing vs outsourcing?
With IT outstaffing, you have daily control over the development process and work as the project manager for the developers. You work with your vendor’s talent pool as if they are your team. When it comes to IT outsourcing, code quality and daily project management are your vendor’s responsibilities. Outsourcing services are usually turnkey and cover every aspect of a software development project delivery, ranging from coding and quality assurance to schedule management and communication.
Main Reasons Why You Should Consider Outsourcing Software Development
1. Cost- and Time-Saving
According to the Deloitte Global Outsourcing Survey, cost reduction is the first factor that enforces companies to invest in software outsourcing. Maintaining an in-house team is much more expensive compared to software outsourcing. You need to incur additional costs on salaries, taxes, bonuses, etc. Hiring an outsourcing team, especially if you need them for a short period to develop your software solution, you obtain the required expertise at a reasonable price.
With outsourcing, you can introduce your solution faster to the market. Sustainable outsourcing providers have the experience to quickly ramp up a dedicated software development team as they have a rich talent pool at hand to choose from. With their expertise in software development, you have all the chances to deliver the product on time and within budget rather than investing in building and maintaining your in-house team.
2. Reduced Risks
When maintaining a software development project with an in-house team, there’s always a possibility of failure in one area or another as you may not have enough expertise to mitigate all the risks, and time is needed to master various skills. Hiring a dedicated project team, you reduce those risks, as an outsourcing company is responsible for your software product delivery, maintaining risk management.
3. Access to Skilled Professionals
Sometimes it’s hard to hire highly qualified specialists for every single task on your project, which may lead to compromising quality. Since a software outsourcing company is responsible for full cycle development of your product, including business analysis, UI/UX design, development, testing, project release and support, etc., it’s an excellent option for you to find all needed specialists at one place. It’s just vital to carefully choose a trusted outsourcing provider with multi-year experience in full cycle custom software development.
4. Focus on Your Core Business
To create a high-quality software solution, you must devote most of your time to software product development and management. When you hire a dedicated software development team, you become free of the technical part of your project and can concentrate on your business promotion strategy.Thus, you can focus on your business development where you are a true expert while trusting the development of the solution to professionals.
What Are the Checkpoints to Consider When Outsourcing Software Development?
When thinking about IT outsourcing, you can consider the following checklist.
Clarify Your Requirements and Project Needs
Before choosing any outsourcing provider, work out project requirements as detailed as possible. It will help your future software development partner to have a clear vision of your solution. Poorly described requirements may lead to the development of a solution that will not meet your expectations, and as a result will lead to a loss of time and money. So be sure you think over all the things you want to see in your software, including how it should look like, what customer problems it must solve, how it will help your business, etc.
Choose an Engagement Model that Works for You
Most outsourcing companies offer multiple engagement models for their customers that may include outstaffing, staff augmentation, dedicated teams, and others. Your primary task during this stage is to define what type of engagement will work for you. Do you have enough expertise to manage your project but your team lacks particular specialists? Maybe you want to delegate the whole development and management project to an outsourcing provider to focus on your business needs more than on software development? These and other questions are must-to-answer when choosing an outsourcing agency.
Check How Security is Ensured
It takes for granted that no business can prosper without trust. Still, you must ensure that an outsourcing company provides full security and privacy to its clients. Thus, check if they are technologically advanced to protect your data from breaches, and other possible issues. Find out what legal documents will ensure your information privacy and security. For example, reputable companies follow the GDPR Policy and sign a non-disclosure agreement.
Analyze the Company’s Expertise
The quality of your product depends completely on an outsourcing partner’s expertise and professionalism. To not fall victim to a software development company with low experience and low-skilled specialists, do thorough research on the company’s portfolio, tech stack, testimonials, etc. The more you know about your future partner, the more you are confident they can deliver a high-quality product on time.
Thus, whether you opt for outsourcing, IT staff augmentation services, or any other type of remote employment, you must have a software development outsourcing checklist covering the aspects below:
- Project needs and requirements
- Engagement model
- Company expertise and reputation