With the lightning speed of technology development, businesses have a greater challenge to stay competitive when it comes to software development. It used to be that an in-house IT team would take care of developing software; however, these days, outsourcing has become more common.
In fact, according to Statista, the market for outsourced software development services is now worth $92.5 billion. And the market is set to continue growing at a fast pace into the forseeable.
If you’re considering outsourcing software development, it’s understandable you may have some doubts and questions. Rest assured you’re not alone.
In this article, we’ll take a look at some of the top advantages and disadvantages that come from outsourcing software development. Our goal is to provide you with balanced information, so you can make the best decision for your business when it comes to outsourcing.
Advantages of Outsourcing Software Development
Cost-Effective & Reduces Costs
This is one of the largest benefits driving so many businesses to outsource their software development. Outsourcing saves money in several ways:
- No need to hire, onboard, and train new employees for software development project
- Save money by not paying for sick leave, software, hardware, and more
- Pay only for services, nothing more
These are areas that can save a business substantial money. Running the project in-house can be quite expensive when considering the entire hiring process, training, purchasing equipment, and more. Outsourcing to a company that is set up and ready to go avoids these costs. You end up paying only for services rendered, and nothing more.
Focus on Core Business
Outsourcing software development can keep a business focused on its core business, rather than breaking their in-house IT department into several smaller teams. Taking on yet another project may also overload the team, leading to poor quality work, and a marginal product.
However, by outsourcing software development, your team in-house team can focus on those essential core projects, while the software service provider focuses on their own specialty. The result is that your team develops a high-quality project and has the ability to focus without taking on yet another project. The outsourcing service provider gets the project done quickly with their knowledge and expertise.
Keeping the work in-house means interviewing and hiring new team members, onboarding, training, and more. This all takes quite a bit of time; plus, it’s also expensive. However, working with a professional outsourcing team frees up the time of your in-house team. Rather than being caught up in the hiring process, they can focus and use their time for more high-value work and tasks.
Another way company’s save time by outsourcing is on support. Once the software has been created, it’s essential to also count there will be bugs, downtime, and more that needs to be dealt with. The software will need continuous maintenance, and who better to take care of this than the company that wrote the program in the first place? This frees up time for your in-house team to be creative, while the service provider takes care of those more mundane tasks.
Gain Access to the Latest Technology
When you work with an experienced and talented outsourcing team, you also have access to the latest technology. The service provider knows all the ins and outs of the technology and can provide recommendations and insights from a knowledgeable perspective.
Your business also saves money by not having to make huge investments in the latest tech. Instead, you gain access to the latest tech through the service provider, without the huge financial outlay for up to the minute technology.
Reduced Risk of Failure
When it comes to developing new products includes risks. It’s unavoidable. Even with all the best market research, risks that were not foreseen can still develop. Think of all the time, expense, and more of hiring an in-house team, and then the product failing. Or what happens if the project suddenly veers off in a new direction? Failure to launch, foresee problems, and more can even lead a business to fail.
However, outsourcing software development means working with a service provider who has experience. They know how to keep risks to a minimum with excellent project management, workflows that are effective, and more. This all means the service provider can keep project risks to a minimum, thus increasing the chances the product will be a success.
Disadvantages of Outsourcing Software Development
Working with an external partner may incur additional costs for services that are provided. These may not have been included in the contract. This doesn’t necessarily mean the company is dishonest and out to get more money. Problems can come up out of nowhere, even with the best plans and processes.
However, more expenditure is a reality you’ll need to account for when working with an outside IT partner.
Language & Cultural Issues
It’s a fact that working with a company in a different part of the world can create problems. The most common issues are language and cultural differences.
In addition, time-zone differences can also make it challenging for teams to work together. Finding the best times for meetings, discussions, and more can quickly disrupt a project.
These problems can lead to missed deadlines, reworking, or even complete failure of the project.
These days data is an extremely valuable asset, which can create security problems for a business w hen working with a service provider. If a project includes confidential data of any type or even intellectual property, there’s a real possibility of that data falling into the wrong hands.
Low Quality Standards
This is another common concern, especially when coding is concerned. There are software development companies in parts of the world that hire team members who aren’t qualified for the work. While they may charge lower prices, the quality may be low. This is a huge risk for companies looking to outsource their software development.
Ensure Your Project is a Success When Outsourcing
Finding the right software development company is essential to the success of your project. You can use these tips to find the best service provider for your project:
1). Define Goals
Before approaching a service provider, it’s a good idea to have a written plan, which outlines the process, product or service. Look for those software development companies that have the right tech, skills, and experience in your industry.
2). Research the Service Providers
It’s always a good idea to do your own research on potential service providers. Check their level of experience and credentials, review their portfolio, and ask for a list of references. Then follow through and contact the references to ask about their experience with the service provider.
3). Cross-cultural Considerations
Remember to also keep in mind the cross-cultural and language issues that may come up. If you choose a service provider in another country, look for a software development company that has extensive experience with other companies in your country.
Summing It Up
Outsourcing your software development project for the first time isn’t easy. However, there are many benefits that come with hiring an experienced software developer for your project. Hiring a professional will get the work done faster and save you money in the long run.