IT software development projects fail for several reasons, but the success stories have something different to say. A well-planned approach to collaborating with a software outsourcing company can help organizations achieve a competitive edge.

Proper management allows the achievement of efficient resource allocation & maximizes production. These are some of the advantages of using software development outsourcing. A thoughtful management plan starts by selecting an outsourcing model. But, as said, so much goes into managing an outsourced software development.

What is Software Development Outsourcing?

Software development outsourcing refers to delegating software development work to an external service provider. Instead of handling all software development work in-house, companies are outsourcing them to experts who possess specialized skills.

Why is Outsourcing Software Development important?

Software outsourcing services have become an important part of many businesses. Additionally, it is successful in providing access to cost-cutting, knowledge, and diverse talent which are not accessible otherwise.

By using software development outsourcing companies can tap into a pool of global talent. By, doing this companies can develop quality software products faster as compared with in-house development.

Moreover, software outsourcing enables organizations to focus on other core activities of business by outsourcing development

4 Types of Software Outsourcing

Offshore outsourcing

When organizations are collaborating with a country from a different location or continent it is known as offshore outsourcing. Organizations use this practice to achieve cost-effective software solutions & gain access to a global talent pool.

Nearshore outsourcing

Nearshore outsourcing is when you collaborate with a nearby country located on the same continent. This outsourcing method offers benefits like overlapping working hours, cultural similarity & reduced commuting costs.

Onshore outsourcing

Onshore software outsourcing, also termed domestic outsourcing, involves collaborating with software development companies from the same country. However, it may not provide cost-cutting like an offshore option but is advantageous from all legal compliances. Moreover, it also minimizes language & cultural barriers.

IT Staff Augmentation

IT staff augmentation is a strategy that enables companies to hire remote developers to supplement their existing development teams. These remote developers work alongside the company’s in-house developers. IT staff-augmented developers possess highly technical expertise.

What are the Benefits of Software Development Outsourcing

Software development outsourcing can immensely impact your business. Below are some of its advantages:

It is cost-efficient

One of the main reasons why companies choose software outsourcing is cost savings. Outsourcing software development to countries with lower costs can lead to significant reductions in development expenses. Additionally, it can also enable saving costs incurred in paying salary, infrastructure & overheads.

Below is an example of how much money you can save by hiring remote developers:

Imagine you need a Laravel Developer. If you are an organization located in the U.S., the average salary of a Laravel developer would be $117,000. But, if you decide to outsource the development to Brazil, the cost would decrease immensely to $54,000.

This allows you to save lots of money which stands at $63,000.

Get access to a wide talent pool

One survey by Daxx showed that 61% of respondents consider access to a larger pool as the primary reason for outsourcing.

Software outsourcing allows businesses to gain access to a global talent pool. This pool of professionals comprises specialized designers, developers & engineers. These experts can help the company deliver a high-quality product faster.

Faster time to market

By using the skills of an outsourcing partner, companies can accelerate their development process. This allows them to bring products to the market faster & enables them to achieve a competitive edge.

Software development outsourcing can help minimize the bottlenecks that occur due to limited resources or skill gaps. Moreover, this enhanced resource capacity will help keep the project on track by preventing any delays.

What are the challenges of Software Development Outsourcing?

Although, software development outsourcing is a cost-effective solution, yet is is not the best fit for all businesses. There are a few challenges surrounding software development outsourcing which are mentioned below:

Communication Barriers

A software development team comprises diverse team members working together from a remote location, which can pose communication barriers. Effective communication is necessary for the success of a project, as mishaps in communication can lead to delays & misunderstandings.

Some communication issues in software development include hurdles like language barriers, time zone differences, etc. But you can overcome the challenges by implementing some strategies.

The first strategy is to build diverse communication channels by using collaboration tools to streamline the communication process. Setting up video conferencing tools, emails & text-based conversations can help minimize the gaps.

Intellectual Property Concern

One of the biggest challenges that organizations face while outsourcing software development is “Intellectual Property Concern”. Companies can face IP concerns when sharing their proprietary information & codes with an external service provider.

There are several steps to mitigate the IP concerns caused due to software development outsourcing.

Some of them are mentioned below:

  • Conduct a thorough Due-diligence
  • Companies can sign NDAs to establish confidentiality
  • Lastly, companies can establish restricted access to sensitive information & build encryptions to maintain data privacy.

5 Things to consider before outsourcing software development

Project Requirements & Complexity

Have you clearly defined the scope & objectives of the project?

It becomes difficult to manage complex development projects, as there might be a chance of miscommunication & a failed execution. But, having a proper plan in place can help both parties understand the project goals & requirements easily.

Search for the right provider

Based on various aspects like industry experience & project success, did you evaluate your outsourcing vendor?

Choosing the outsourcing vendor based on the expertise, track record & cultural compatibility can be a game-changing decision. Moreover, you should look for outsourcing vendors who have experience in your industry to deploy the project successfully. Lastly, ask for the reviews & portfolio to choose the best fit.

Evaluating potential risks & contingencies

Have you forecasted any future uncertainties & risks? If yes, do have a proper plan to address these risks?

Analyze future potential risks & have a contingency plan in place. While identifying risks consider factors like vendor reliability, change in project scope, etc. to build a backup plan.

Establish a communication strategy

Did you forget to build a clear communication plan by not including communication tools & modes of communication?

Build a clear & efficient communication strategy, as regular communication is important to ensure both parties are aligned together. Moreover, both organizations should also decide what communication tools & modes are they going to use. A remote team that possesses the right communication skills is surely going to excel in the competition of the market.

Prioritize Data Security

What are the data security measures the vendor needs to take during the software development outsourcing practice?

Being an organization it is your responsibility to ensure that the outsourcing vendor has robust security measures in place. Moreover, data breaches can have some severe consequences, so discuss the security measures & encryption methods to be used beforehand.

Software Development Outsourcing Services: Are there any competitive alternatives available?

If you are outsourcing software development because of monetary factors, then it is advisable to choose other alternatives.

For example, hiring remote tech talents will help you minimize the hiring costs & provide access to skilled IT professionals. Furthermore, by choosing IT Staff augmentation, companies can scale their team smoothly.

Outsourcing Developers

Outsourcing software developers can be a suitable option in the below scenarios:

  • Short-term Projects:

If you have a project with a specific scope & timeline defined, choosing an outsourcing method will be useful. Outsourcing software development provides the right skill sets to make it a go-to choice when hiring developers

  • Specialized Skills:

You should opt for outsourcing developers when your development team is looking for specialized skill sets that are absent in an in-house team.

How Acquaint Softtech Has Helped in Software Development Outsourcing

Acquaint Softtech is a custom software development & IT staff augmentation company that helps clients hire remote developers. Acquaint Softtech provides remote developers at just $15 per hourly rate. Moreover, our team holds 15+ years of experience in custom software solutions.

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Wrapping Up!

In the modern tech-led era, face to face interactions has shifted from offline to an online mode. Companies are seen switching their work model from being offline to being completely online. Moreover, organizations are seen building a managed remote developer team to meet the software solution needs.</p>

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