Software development outsourcing

The article is a part of Code Inspiration’s software development outsourcing Knowledge Base.

Internet is full of stories about bad experience of outsourcing together with the fact that till now many companies prefer to outsource a number of services rather than hiring their own stuff.

Software development outsourcing statistics

Monitoring statistics, we also should mention that according to key outsourcing stats it is estimated that 300.000 positions are outsourced every year. And the global market of outsourcing reached 92.5 billion US dollars in 2019 accordingly. While in 2018, the global market for outsourcing was worth $85.6 billion according to the same source. So we can see numbers are growing.

Now with the pandemic in the world in 2020, when lots of businesses has lost their stability, the number of outsourcing will only grow, especially in the IT sphere. For many companies it is a great way out. When there is no necessity to hire people and if they do not fit the position to fire them, as the procedure is not that fast. Also, not all the companies require full-time team participants, and if talking about it outsourcing, we couldn’t but mention that many business simply require maintenance with slight development of additional functionality as per users’ needs.

Benefits of outsourcing software development

Getting back to our main question: why software development outsourcing earned a good reputation.

Let’s get through the main points:

  1. Price. As practice shows, even “expensive” outsourcing to Eastern Countries is less expensive than salaries and further internal expenses, as lease, taxes etc. which company pays together with the salary of its employees.
  2. Possibility to stop when you wish. Most of the contracts contain a possibility to notify about your willingness to terminate the agreement in advance of one month. That is to say, if your plans have changed you can always drop a written notification and that’s it. It is much more convenient than firing your employee not for the bad work done, but because of changing of your business strategy. Also, if you need some fixed scope to be started and finished – it is a great opportunity to plan your budget appropriately.
  3. When there is no necessity for full-time engagement. If your business doesn’t require constant ongoing development you can simply outsource the maintenance of your software, be it a mobile application or a CRM system or whatever else. In this case nothing can serve us better than a good example. A company Z has 2 native mobile applications, backend and admin panel, with 2000 users, which require slight updates once per 2-3 months and also dealing with some issues which are reported by users. To hire employees for this scope of work, they will need to have at least one IOS, one Android developer, one backend and one frontend developer (or one full-stack), QA and a PM. That is to say you will need to employ at least 6 or even 7 people to handle the maintenance. While at Code Inspiration such maintenance starts from 2K per month for maintenance and 40 hours of additional development.
  4. Services, which require narrow expertise. If you need any kind of services which require narrow expertise, outsource this part to professionals. It will save your time digging deep in the niche you are not expert at and will save you plenty of time, providing with a possibility to concentrate on business goals and needs.
  5. Flexibility. Being flexible to everyday changes today is of the highest importance. Imagine you changed your development strategy and decided to move on with another stack of technology for your software. An outsourcing software development company will be happy to provide you with required resources on the way. Convenient model of paying per hours will provide you with a benefit to pay only for hours spent.

Imagine another situation, when the developer who you are working with, doesn’t suit you not for professional, but for personal reasons. Simply you might not like his voice, or way of doing things and so on. Working with an outsourcing agency you can simply ask to change the developer or the PM or any other team participant, while having the same person but as your employee, you would have to negotiate and explain somehow the reason, as well as to pay additional fees for your decision to fire him before the end of the development outsourcing

Of course, it doesn’t matter whether you outsource, or hire people, all the time it is important to check with whom you are planning to work. As outsourcing in most cases means overseas, here you may face with some communication issues or even cross-cultural incompatibilities. So, before hiring an outsourcing team, check well they suit your business philosophy and simply behind the “company name” there are humans which are willing to perform their job well. In this case, outsourcing will bring you positive emotions together with other 5 benefit points we have just mentioned in this article.

The article is a part of Code Inspiration’s software development outsourcing Knowledge Base.