Outsourcing Software Development: Pros and Cons
With the advent of artificial intelligence and machine learning, more and more companies were forced to step into the innovation race. Competition, especially in the information technology field, has become more hostile, bringing new startups and ideas to the market. In such a business environment, enterprises strive to become more flexible, agile and deliver the best quality to retain their key clients. If you are operating in the IT industry, you probably feel the pressure of innovation. High workload, deadlines are burning and you don’t have enough resources to deliver at least minimal viable product. By the time you finalize the project, the market might be flooded with the solutions you thought of a couple of years hours ago…
How to handle all the tasks and provide satisfactory result to your company? Outsourcing often becomes the most optimal solution in such cases. It means you have to find a reliable service partner and hand specific business processes over to an outsourcing software development house. By sharing responsibility with a vendor, you get rid of your pain in the neck and get a chance to offload your team a bit. Outsourcing companies have a lot to offer as they can cope with capacity issues and assist large corporations with filling out the skill gap. Moreover, according to the survey provided by DZone, most customers are somewhat satisfied with everything outsourcing delivers. Here are some stats to back up this fact:
However, don’t let your hair down too early! Although outsourcing has a lot to offer and most clients are satisfied with the outcome they get in the end, it still has some pitfalls and drawbacks that need to be considered before you make the final decision. As we are pretty aware of all the nitty-gritty details and have extensive experience operating in the marketplace, in this article, we are going to look at the bright and dark sides of outsourcing software development.
Why to outsource? Benefits of outsourcing software development
Cost-cutting Opportunities with Predictable Pricing. One of the most essential benefits of outsourcing is definitely cost optimization. Any business, regardless of its size and industry, is looking for ways to cut costs and increase revenue. Outsourcing is often an excellent solution as it allows you to hire a specialist by 2 or even 3 times cheaper than in your country. Outsourcing companies from Ukraine, Belarus, Armenia and Africa are gaining popularity among large corporations as they deliver a perfect combination of quality and cost. Apart from that, you don’t have to allocate funds to recruiting services and compensation package that take a significant share from your budget.
The main idea in the hiring process is to choose the best rather than the cheapest option. Quality comes first in any project. If you hire newbies without proper skills and qualifications, they will only take your time and efforts. Conduct market research, interview a set of candidates, look at case studies and choose the company with relevant expertise in your field.
Time-saving. Outsourcing a project is always faster than building an in-house team. With tight deadlines, this task is almost impossible. Finding the right match for your company might be a time and money consuming process. Recruiting, on-boarding and training take much time and slow down the software development process. With tight deadlines, it is almost impossible to assemble a team from scratch and teach employees to work together to attain common goals. By delegating a project to your software development partner, you receive support from an already established company with expertise in your field. They take your project idea, analyze your technical requirements and come up with the most optimal solution that satisfies all parties within a limited timeframe.
Precise Focus on Core Competencies. If you don’t work for the large corporation with branches in dozens of countries, there is no way to cover all the aspects of the product supply chain. Something is going to fall behind regardless of the amount of effort you put in managing, controlling and monitoring all the business processes. You will continuously try to set priorities and keep up with the pace of technological development. Instead of chasing windmill, share responsibility with your outsourcing partner. For instance, if you are interested in web development, choose the vendor with successful cases that can provide you with advice timely and address your development challenges in the best possible way.
Access to Skilled Labor. The majority of companies find it challenging to hire a developer with the right combination of skills, expertise, and experience. Currently, there is a growing competition among software development enterprises which strive to attract talents to contribute to their projects. It means you might be unable to meet the needs of senior developers who have plenty of offers in their inbox.
Outsourcing companies pay precise attention to the level of staff competency. They heavily invest in employee training, keep track of their performance, and get developers certified in the technologies they offer. Going with outsourcing means you have a partner to consult and refer to when you deal with a crunch.
Quality Guarantee. A reliable software development house takes full responsibility for the quality of the final product. Before you sign the contract, the vendor discusses your project, define technical requirements and offers the most optimal solution that fits into your budget and can be delivered by the deadline. They develop an agreement with defined terms including intellectual property rights, deadlines, penalties for both parties and all other aspects that can be important in a given project. Such precise attention to details makes you feel fully protected and establishes a solid background for long-term cooperation.
Any drawbacks or pitfalls? Cons of outsourcing software development.
Communication Barriers. Finding a reliable vendor with tech expertise, low cost and great attention to details sound like an appealing option that can really offload you and your team. However, before jumping with the first option, think over communication difficulties that might arise when you deal with specialists from diverse cultural backgrounds. Linguistic barriers, different time zones, as well as the level of directness, might take your time and efforts. Adjusting to a completely different management system may make you feel as if you are losing control over the situation. To avoid this stress, discuss the communication model with your partner and make sure the vendor understands your requirements.
High Turnover. When you have an in-house team, you have full control over operations and HR processes to make sure developers won’t give up a project halfway. However, outsourcing means you delegate this responsibility to a software development company that has its own HR policies and corporate rules. If they do not treat your team members properly, they are likely to leave. High turnover might cause a set of troubles for you. Finding a substitution for your project can take much time, which will undoubtedly slow down the development process and delay deadlines.
Hidden Costs. While you are looking for the vendor to cut costs and optimize business processes, you might end up with a huge price composed of hidden fees. It might happen regardless of the payment model you choose: hourly-based rates or fixed price. With hourly rates, developers might exceed the agreed limit and spend more time to add extra features to your app or program. Besides, meetings, consultation and even travel expenses can also be added to the price in the end.
Fixed price is not the best option as well.You never know what is included in the package. In the best case scenario, you get a minimal viable product that requires improvement and extra development costs. As a result, you will have to pay more money out of your pocket to deliver a quality product. Thus, before signing an agreement, make it clear what services are included in the provided estimations.
Read also: How much does it cost to make a mobile app?
Where to find an outsourcing partner? Market research is something you should do in the very beginning. Set up your budget and look for the available options on the market. There are a variety of platforms that provide customers with detailed information about the company, its expertise backed up with relevant case studies and feedback from real clients. Clutch and GoodFirms are the best platforms to analyze the market. Outsourcing companies are categorized here into groups, so you can easily find the right match, browse the website and get in touch with the company’s representative.
We advise you to prioritize the project or task you want to delegate to an outsourcing partner. Don’t jump with the cheapest option, but look for a reliable vendor that will be able to provide you with long-term support. Moreover, adequate management is important when you need the product to be of high quality. Conduct market research, compare available options and choose the one that best meets your business needs.