Businesses and organisations of all sizes are successfully hiring external development agencies to build software. If your business requires software, you might also want to consider outsourcing the project.
However, putting your trust in an external team to deliver positive results can be intimidating, especially when the success of your startup relies on it and you are outsourcing for the first time.
This article explains seven reasons why businesses outsource software development.
Are you ready to outsource? Why not outsource your software development project without risk? At Deazy, we build software that meets your business needs. Our experienced, vetted team can handle projects of any size and complexity while working at pace. Book a call.
What Does Software Outsourcing Mean?
Outsourcing software means hiring a third-party agency to handle all the services related to software development. Those services can range from building software to managing and maintaining it to ensure smooth performance.
Software outsourcing is a common solution that many businesses rely on for their technical needs. It continues to thrive due to its ability to deliver significant value to businesses and enable them to remain operational even amidst disruption.
What Does Software Outsourcing Look Like?
When you outsource, you seek an external team of expert programmers to build your software. The team works for you by developing a software product that meets your business-specific needs.
However, you don't own the team, which is good. You are not responsible for their taxes and other legal issues.
Also, you are not responsible for providing infrastructure or the resources they will use to work. The external agency that employs them will handle all these tasks, including paying benefits.
Why You Should Outsource Your Software Development Project (7 Reasons)
Outsourcing software development is a big step for any business, whether it is a startup run by a small team or a large enterprise. Here are some reasons to outsource your development project.
Access to the Best Global Tech Talents
Have you ever felt you can't get what you want because you are limited to one location? If you have, you are not alone.
When searching for experienced web or app developers to work on your project, you might find some competent in common roles like building websites or mobile apps. But what about new or rare skills?
A business that requires artificial intelligence or machine learning experts may find hiring from the local talent pool difficult. The only option is to look elsewhere for AI or ML experts. The same applies to a business that needs a complex web or mobile application.
Hiring an external team is the way forward and ensures you gain access to the best tech talents when needed. And the good part of outsourcing software development is that you can get programmers across tech stacks.
This means that if you need a team of experts consisting of a software engineer, product manager, business analyst, software architect, QA engineer, software tester and DevOps engineer, you can find them easily from the global talent pool when you outsource.
Faster Time to Market
Competition and the ever-changing business environment keep companies on edge. So, if you plan to develop an innovative software product, you must be fast about it.
Software development is a lengthy process that might take months to accomplish. If you decide to hire your team, it can even take longer than expected to complete. This can be frustrating for a business that wants to get a new product to the market.
The easiest way to build software and increase launch time is to outsource the project to an external agency. Most software development vendors have experienced programmers that are familiar with the development process and that can convert business requirements into working software.
They won't waste time getting your business requirements and will start working on a product that meets your needs. This will greatly reduce the development time and increase the time to market.
Reduce Business Costs
Most businesses have recognised the importance of hiring expert programmers, UI/UX designers, QA engineers and project managers from nearshore or offshore teams.
Outsourcing reduces hiring and operational cost by transferring portions of your workload to a third party. Small businesses outsource to remain competitive, while large companies outsource to save money and focus on what matters.
When businesses reduce development and operations costs, it frees up more funds that can be channelled into other aspects.
- Reduction in overhead expenses. Businesses can save a lot when they outsource software development projects. Since the external agency employs the developers, you don't have to pay common expenses, including office supplies, payroll and accounting fees, vacation, holidays, rent, technological tools and training.
- Reduction in hiring cost. Hiring in-house programmers is a process that takes months to accomplish. From advertising the job position to vetting and onboarding, you must pay recruitment agencies before getting all the skills you need. And remember that the longer it takes to find talents, the more money you pay. When you outsource your project, there is no need to waste valuable cash because the external agency will help you assemble the developers.
- Reduction in the hourly rate. When you outsource, you enjoy a reduced hourly rate, especially if you hire expert talents from low-living-cost countries. For example, a business in the United States can take advantage of global talents and hire skilled software programmers in Poland. Since the developers' hourly rates in the US and Poland differ, the US business will save money.
Focus on Core Expertise
If software development is not your area of specialisation, choosing an in-house team yourself can quickly translate to wasting valuable time and money you could have spent on your core business activities.
This is one reason companies, especially startups and mid-sized, hire an external agency to focus on tasks that generate the highest value.
For example, an e-commerce store popular for selling high-quality designer shoes will not waste time building an internal team of software developers because it will divert their attention from promoting their brand.
Creating a department, hiring to fill it up with programmers and onboarding the developers will waste time and divert from core activities. But if the business chooses to outsource, it will speed up time to market and allow them to focus on the business activities that matter.
Save Time on Hiring Software Developers
There is no gain in saying that hiring in-house employees takes time, especially when you want to hire experienced software programmers. First, post an application at various job portals or search LinkedIn for potential candidates.
After shortlisting a few programmers, you will arrange for interviews, which means scheduling to find the right slot, which will drag the process.
To further complicate and extend the process, you must hire the right fit – programmers with enough skills and experience.
This means asking about experience and portfolios and examining each to ensure you are dealing with the right candidate. And when you find the right developer, you have to spend time training and onboarding before they adapt to your business operations.
If you outsource to a software development agency, you don't have to worry about building the team. Since the agency has programmers across technology stacks, it can easily help you to build your squad.
Scale Your Team When You Want
Another benefit of software outsourcing is the ease of scaling the team. Businesses are working hard to keep up with the high market dynamics and expect the same from their outsourcing partner.
Businesses may rethink their ideas, even after commencing development, to stay up to date. They can add more features to the software and make it even more complicated.
If you have in-house developers, changing the requirements will affect the pace of the project. This is especially true if changes require additional programmers working on the project and you have just a few in-house developers.
A software outsourcing company can help you scale your team by adding more developers if your project requirements increase or you want them to finish the task quickly.
Also, you can decrease the number of devs in the team once you have completed high-priority tasks. The ability to increase and decrease a team's size scalebly is another reason businesses choose to outsource.
You Work with Niche Experts
Another reason companies outsource is that they want to work with niche experts. Finding developers to build your software is a good idea, but finding expert devs familiar with your business niche guarantees you the intended result.
For example, a fintech company will achieve great results if it hires an outsourced team that specialises in building mobile apps for fintech businesses.
The team can help the business choose the best product features and advise on the appropriate tech stacks.
Software outsourcing allows you to find experts already familiar with your business.
Software Development Outsourcing Models
To outsource software development projects successfully, you must choose the right model that works for you.
In onsite outsourcing, the outsourced team works from your office and functions like your in-house staff. The external agency will handle the hiring process and send the team to work from your location. The advantage of onsite outsourcing is that the team will adapt quickly to your system since they work from your office. Another advantage is that you hire locally, so the chance of cultural and language differences is minimal. However, if there is a skill shortage in your location, getting expert programmers won't be easy.
If you can't find onsite developers and want to hire local talent, onshore outsourcing is an option to explore. In onshoring, you hire a dev team who builds your software while working from a remote location. For example, a business in London can hire a team in Manchester. Since you and the outsourced team are from the same country, there is little chance of communication and cultural barriers. Onshore development is for startups and large enterprises that can shoulder the higher development cost.
Offshore development is where you hire a team in another continent in a different time zone. This is the most common and cost-effective model because you can hire programmers in a country with low living costs. A UK firm working with software developers in India is a classic example. Since devs in India charge less per hour than those in the UK, the UK-based business will save costs while engaging expert developers. But the setback of offshore outsourcing is the time zone difference.
Nearshore is an outsourcing model that gives you the best of onshore and offshore development. In this model, a business will hire a development team from a neighbouring country. The business will benefit from lower development costs and a large talent pool while working with programmers in the same or similar time zone. Also, since you are hiring from a nearby country, you will share a similar work culture, and the developers will understand your language.
If you have an existing in-house team and you want to hire more hands to build your software, staff augmentation is an option to explore. In this model, you hire an external team to bolster your existing in-house team. It is similar to hiring an employee, except you don't do it yourself. The augmented team can work onsite or remotely. This option is best if you have a skill gap and want the team to fill it.
The dedicated team model is the best option if you want an external development agency to create an entire team to build your software. The team will consist of all the experts you need to build functional software and will work exclusively for you. For example, you can hire a dedicated team to develop and maintain a mobile e-commerce application.
In this model, you outsource everything to an external development company, from project planning to deployment. This model lets you focus on your core business activities while the experts work on your software. However, you have little control over the project, so you must monitor the agency to ensure it delivers on its promises.
In this model, you and the developers agree on a fixed rate based on the estimated time and resources needed to complete your project. The biggest benefit of this model is that you don't overpay the developers, and it is easy to set it. However, it doesn't consider changes that might occur during development.
Time and Materials
This model makes it easy for you to pay the developers for the actual time spent on the project. The developer will get the right pay for their work while the client will receive a quality software product proportional to their spending. That is why business owners consider the time and materials model the best software development approach.
You are not limited to choosing a single model when outsourcing. Instead, you can combine different models if they work for you. For example, you can hire a dedicated team from a nearshore software development agency. Or, you can hire offshore developers on a project basis while paying them for the time and materials they spent building your software.
Outsource Software Development with Deazy
We offer a flexible engagement model that makes software development easy. You can hire a dedicated team, plug our devs with your existing in-house team or hire talented programmers on a project basis. Some of the benefits of outsourcing software development with Deazy are:
- You work with stellar devs around the world.
- Access to developers covering a wide range of technology stacks.
- Hire pre-vetted developers with excellent programming, communication and business skills.
Ready to outsource software development? Book a call with us today!
When you outsource your software development project, you gain access to a large talent pool and save on outsourcing costs while eliminating the risk of not meeting delivery deadlines.
Aside from that, outsourcing gives businesses a chance to work with expert developers. This will allow them to focus on their core activities.
Are you ready to partner with the right software development company with years of experience and a track record of success? Feel free to give us a call.
Frequently Asked Questions
Why would a company outsource to a software development agency?
One significant benefit of outsourcing software development is accessing tech talents unavailable to your company or within your country due to budget or skill shortage. Another reason companies outsource is to increase the time to market.
How do you determine if you should outsource?
If you need software and don't have an in-house team, you have to outsource your project to an external team. Also, if you have an internal team but need developers to fill in skill gaps, you can hire programmers from an external agency.
What problems does outsourcing solve?
The objective of outsourcing is to gain an edge over your competitors. Outsourcing gives you time to innovate and launch your software to the market faster than hiring in-house software engineers.