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A Complete Guide To Successfully Outsourcing Software Development

Have you been thinking of taking your business online, or perhaps you need to refurbish your site with some unique features? But, don’t have time?  Well, fret not! Software outsourcing is at your rescue.

Software development outsourcing has become a culture in the IT industry, owing to the amount of time and efforts consumed in the overall development process of software which is quite overwhelming. 

Unlike in-house software development that doesn’t always promise the end-product to be as perfect as the ones rolled out by the professionals in the field, outsourcing provides you an opportunity to leverage the skills of the market experts to develop a more effective and seamless product catered to the specific business needs. 

Recently, a report revealed that the outsourcing business outgrew itself, becoming a whopping 66.5 billion dollar industry. This staggering growth of software development companies can be primarily attributed to the digitization of almost every business. However, outsourcing is certainly not risk-free. It does have its drawbacks, but they are quite feeble compared to the significant number of advantages outsourcing offers. 

Why do companies outsource

Source: Deloitte’s report

But first, let’s dig deeper into this inflating business and understand what precisely outsourced software infers.

What Is Outsourced Software?

Outsourced software is a customized software tailored as per your guidelines by a third-party vendor.  These vendors are generally software outsourcing companies that have an organized platform, a streamlined process, and a set of qualified individuals to integrate or develop made-to-order products. Mostly, all the software projects these days are outsourced to save time and delegate the task in better hands. However, some businesses share only the testing process for quality assurance. Well, it’s up to your convenience as to what exactly you require. 

Organizations that have already jumped into the wagon have a positive review about outsourcing the work.  

The owner of an IT service company from Germany, Ben Magnus, says, ‘Outsourcing has provided twice the quality we would have ever expected in half the time.

Now that you know what outsourcing is, let’s move onto the types of outsourcing. 

What Are The Types Of Outsourcing?

Types of Outsourcing

Outsourcing has been strategically classified based on the location to ease-out business operations.

Onshore Software Outsourcing

Onshore outsourcing, also termed ‘domestic outsourcing,’ is a process of handing over the software development to the other company that resides in the same country. Some of the major advantages of onshore outsourcing are – 

  • Reduced travel expenses
  • No language barrier
  • Similar expectations as per the culture
  • Secure and flexible services
  • Time zone aligned

Offshore Software Outsourcing

Offshore as the name suggests, is the outsourcing of software development to a company from another country. An offshore software development team allows businesses to expand in other parts of the world. 

For instance, a US company looking for a good yet cost-effective software development team overseas can reach out to places like – India, Ukraine, Poland, Philippines, Argentina etc., to get good quality software at a lower cost than they would get in their own country. The benefits of offshore outsourcing definitely outweigh other types of services, which are  –

  •  Meager development cost
  •  Faster Development rate
  •  Quality Assurance with innovation due to cultural differences
  • A glimpse of the foreign market
  • More time to focus on the company’s core competencies
  • Flexible tradeoff

Nearshore Software Outsourcing 

In Nearshore software development, a company delegates its task to the software development team that belongs to a neighboring country.  Due to the workspaces’ similar time zones, Nearshore software outsourcing gets the upper hand over offshore software outsourcing. Moreover, it increases the possibility of visits to the development center more often.

Top Software Outsourcing Destinations

Source: wikipedia

Why Is Software Outsourcing Important?

Outsourcing software to a vendor facilitates its deployment time without spending a fortune on the development part. It also addresses resource constraints and eliminates the need to set up a new team from scratch. In addition to this, it also provides the flexibility of work. 

Here are some principal advantages of software projects outsourcing:

Benefits Of Software Outsourcing Services 

Reduced development cost 

Setting up a team and bringing them on-board involves a lot of knowledge transfer, and organizations incur a lot of expenses on their training, insurance, and salaries. The new unit also needs to develop a thorough understanding of the project at hand. In addition to this, a company may not find a qualified resource and might have to compromise on the work quality. Outsourcing software development, on the other hand, eliminates all such overhead costs. When you delegate the task to a software outsourcing firm, they already have a dedicated team of experts. Thus, it cuts your deployment cost to half, and the time for knowledge transfer is also curtailed.    

Accelerated deployment rate

Deployment rate is directly proportional to the skill factor of the development team. Since an outsourcing company already fulfills that criteria because of its uniform talent and access to advanced development tools, the projects they take up are rolled out in the stipulated time given to the client. An in-house team may not assure such commitments. 

Streamlined Process for development

Micromanagement is tedious, however, mandatory when it comes to building an in-house team of developers. All such hurdles are easily transcended in an outsourced project because of the availability of platforms and a variety of tools to ensure effective workflow and communication within the team and the clients. Furthermore, issues related to resource replacement are resolved more quickly. They hardly require any time to train their workforce because the recruited candidates are well-versed with the technology and its implementation. 

Access to intellectual capital

The primary reason for outsourcing a development team for your software is the access to the advisory of experts in the field and their technical assets like – methodologies and tools to carry out the development process hassle-free.     

Better focus on core competencies

Taking up a new project is a time-consuming process. It involves a lot of resources which may often lead to mismanagement and digression from the primary goals and competencies of the organization. On the contrary, executing the task to a third party allows the organization to focus on the imperative projects and scale up their business rather than wasting time on tasks that can be simply outsourced.

Benefits of software outsourcing services

Risks Involved In Outsourcing Software Development Services

Communication Issues

One of the major setbacks to developing a useful outsourced software is the lack of communication between the development team and the clients due to time-zone differences, language barriers, or cultural beliefs. Moreover, miscommunication may result in scope creep where there is a considerable gap between your expectations and the team’s deliverables. If you don’t address these factors appropriately, they can significantly pull back the project’s progress, consequently impacting its on-time delivery. 

Risk Mitigation: Maintain constant communication via online meetings to achieve transparency in goals and improve the workflow. Establish one point of contact, a project manager, for instance, to relay the alterations in the developments. Doing so will not only address issues timely but will also help get an insight into the way forward. 

Compromising Quality For Cheap Labor

It is always tempting to settle for a low development cost regardless of the budget of your business. However, it is not advisable to opt for such low-cost operations as they are mostly unreliable for the quality they deliver. On the other hand, if the vendor is an influential party and has multiple projects running concurrently, they may not prioritize your deliverables as intended. Hence, it is imperative to choose your vendor diligently to achieve the focus, quality, and commitment you require from their end.

Risk Mitigation: While zeroing in on the vendor, it is crucial to gain a proper understanding of their team strength(whether they have in-house experts or outsource coders), methodologies they use to carry out the operations, the level of communication they maintain with the clients, and most importantly – detailed documentation or a contract of the developments and support services they will cover within the finalized cost. 

Security Breach

Company data is confidential and must be held with utmost sensibility. Any leak in this intellectual property of your organization may cost an innumerable amount of damage. 

Risk Mitigation: Choose a vendor that prioritizes the security of the data over any other aspects. 

Risks in outsourcing software development services

Effective Ways To Outsource Software Development / Outsourcing Strategy 

 Once you have made up your mind to get your software outsourced, it’s essential to follow the right strategy that fits your requirements. 

  • Understand the kind of software you require
  • What must be the outcome of the development
  • Decide on your priority – reduced cost or time-saving. 
  • Does the project require one resource or a complete team?
  • Does it require in-house development or full outsourcing?
  • Decide which outsourcing model fits your needs better – single outsourcing model or multi-outsourcing model
  • Set KPIs that are realistic 
  • Execute your plan

Reasons To Outsource Your Software

Most companies are indecisive when they have to choose between an in-house resource and an offshore team for software development. If you are among those, who want an answer to what they should go with, read on – 

 Lack Of Required Skills In the Region

The skillset you are getting in your region isn’t sufficient enough to carry out your demands. 

In-house resources are completely packed 

Despite having a team of experts, the organization doesn’t have enough time to delegate them to another task.

Have limited time and budget

Seeking for low investment and quick deployment of demands? You must try outsourcing your software.  

Where To Find Best Software Outsourcing Professionals?

 India is one of the most renowned countries for outsourcing your software. With a population of 1.56 billion, the country houses about 5.2 million software professionals that dedicatedly work to provide services to the US, UK, and most parts of the world. 

Its inexpensive labor cuts the development cost remarkably, and most of the support services in this country are time-zone aligned which makes the collaboration sustainable. 

Moreover, India is the second-largest English-speaking nation in the world that makes it a perfect location to outsource your business requirements without worrying about language barriers. 

So, have you made up your mind yet? Reach out to us!

Why Choose Sigma Data Systems For Outsourcing Software?

Sigma data systems has a vast client base and is leading the market with its excellent services and on-time deliveries. With a workforce of more than 400 employees and a dedicated team of trained professionals, we have a knack in software outsourcing with guaranteed quality assurance. To know more about Software Outsourcing click here.

Meenakshi Kalyani

Meenakshi Kalyani

Meenakshi is a writer and content marketing strategist at Sigma Data Systems. Her writing is a reflection of the deep knowledge that she has of the silicon world. Corroborated by intriguing facts and innovative ideas, her articles present every aspect of constant technological evolution. When she is not penning, you will find her painting, traveling, or introspecting her emotions to craft a piece on @sutured_emotions.