A Simple Guide to Software Development Outsourcing

Outsourcing software development means employing an outsider or third-party service provider to work on the company’s software development plans and projects rather than involving the in-house teams. Sometimes, this employment is done based on a contract for a limited period, sometimes it is for the entire project timeline, and many more. Outsourcing software development is becoming popular around the world for its efficiency, time-saving, and cost-effective nature. According to Statista, by 2025, the revenue in this market is projected to reach around USD 120.10 billion worldwide, where the US alone has the potential to earn USD 43,110 million¹.

Why Do We Need Software Development Outsourcing?

The world needs more advanced software technologies than ever. Almost 57% of global companies recruit off-shore developers². Here are the top 5 reasons a company should hire developers from outside.

Cost Effective

Any company that wants to develop or upgrade its software without spending a fortune turns to outsourcing software development. This way, they usually pay a cheaper hourly rate for outsourcing without paying for the whole infrastructure or any devices used for the project. Even with over 1.5 billion active users, successful companies like WhatsApp employed Russian developers for its early software development to reduce costs and access top engineering talent³.

Create Access to Unlimited Global Talents

Outsourcing allows us to access a broader talent pool. By hiring developers from outside, the company ensures more specialized additions to the project. This addition does not come with any kind of size limitations. Companies can scale the team size based on necessity. India is a great example of generating global talents. Every year, around 2.6 million software developers are produced in India with a STEM education system⁴. Statista notes India as a top contributor in providing outsourcing services¹.

Faster Outcomes

Hiring software companies means experienced and skilled people who help to maintain the project deadline sincerely. The hiring company also can enjoy recently upgraded software related to the project. In 2013, Slack hired MetaLab to work on their website and app and was able to serve 15,000 users only within 2 weeks of launching and secured major investments².

Avoid Long Training Processes and Management

After hiring, the employee needs a lot of training and hands-on sessions for onboarding. Working with a third party is always efficient in such a situation. Thus, the company does not need to manage and train the whole team, yet can get the desired outcomes. This way, they can focus on their core business activities.

Mitigate Risk Factors

Developing a product is not an easy task. It can face several issues throughout the development process and even after its launch. With an outsider’s help, the company doesn’t need to deal directly with project delays, budget, or quality issues.

But All Presents Come with Strings

Everything has a good side and a bad side. Outsourcing developers is no different. There are some concerns that people usually deal with when outsourcing to third parties.

• Communication Barriers: Sometimes, both the hiring company and the developers face connecting issues because of being in different time zones. Also, most outsourcing companies do not have multilingual facilities, so this sometimes leads to a communication issue.
• Quality Control: As the third-party developers are not direct employers, the hiring company cannot always control the quality of the work.
• Data Security & Privacy Risk: Developing any software means dealing with sensitive information and confidential data. This is why hiring outsiders can be tricky and risky.
• Hidden Costs: Outsourcing for projects can come with charges that are not included in the project budget.

Not like these problems are non-resolvable. Companies need to research thoroughly and focus on some important factors that can actually help them avoid the aforementioned hindrances. In the next part of this article, we will find the proven solutions to these issues.

Software Outsourcing: What to Keep in Mind

Before going forward with outsourcing software development, the companies should be aware of the project and current market situation and measure the possible problems that can occur during the journey. Here are some globally accepted solutions for companies that want to outsource their developers.

1. Aligned Project Goal, Scope, and Profile

Knowing the goal, scope, and overview of the project is very important to achieving the best results. If one doesn’t know the goal, it’s impossible to reach the destination properly. Also, knowing the purpose helps to minimize unnecessary delays. Not only that, if the company can properly brief their needs, they can expect the finest outcomes from the third-party services. If the hiring company is fully aware of the project demands, characteristics, functions, duration, and budget, they can simply assign the outsourced team and ensure the quality of the product.

2. Assess Expertise

The right outsourcing partner can depend on how expert they are in that specific field. To figure this out, employers should look for industry expertise as per their needs (e.g. automotive, fintech) and technical skills that could match the project’s functionalities. Not only that, but the company also needs to thoroughly research the developers before hiring. They need to find and evaluate their previous case studies, client reviews, and testimonials to ensure reliability.

3. Communication Skills & Collaboration

Communication is key to achieving a definite goal. Both parties should communicate properly to understand the project’s demands, workflows, and action plans in detail. For this, the hiring team and outsourcing team should have regular meetings, proper communication channels, and similar project management tools.

4. Security Policy & Data Protection

In the case of software development, there are several sensitive data and information which are the intellectual property of the company. That is why it is very important to stop privacy breaches while developing the software. First, the hiring company should look for a trusted and well-known developer for the task. Then, the employers and outsiders should sign a Non-Disclosure Agreement (NDA) or a legal Memorandum of Understanding (MOU) or Contract. This will not only help to protect confidentiality but also help both parties have clarity on the project and streamline the expectations. In the MoU, they can point out the ‘Compliance Standards’, ‘Data Access Control’, and ‘Secure Development Practices’.

Concluding Remarks

IT industries are continuously looking for something new, something innovative, and something out of the box. So, the best way for someone to ensure all of these is to go beyond the border and outsource for the company. Because of outsourcing, the world is becoming a global village. Although outsourcing software development does not seem like an easy task, it’s not that difficult, either. With proper documentation, research, game plans, and strategies, a company can make its product journey faster, smoother, and better. Therefore, if done right, outsourcing might just be the perfect IT solution.

References

[1] Application Outsourcing – Worldwide ↩

[2] 6 Case Studies Proving You Should Outsource IT Development ↩

[3] 11 Successful Outsourcing Case Studies From Tech Giants ↩

[4] The Best Offshore Software Development Countries In The Globe ↩