Benefits of software outsourcing

June 29, 2018 - 7 minutes read

The present time has seen a remarkable development in the outsourcing IT industry. Externalizing software development has become a part of business strategy as more and more started outsourcing their IT requirements to Outsourcing Software Development companies. Project externalizing has extended beyond the manufacture of durable consumer goods and has spread like wildfire through the technology sector, with software development outsourcing in the forefront.

It’s not a wise decision to waste time and valuable resources for building an in-house team for software development when you can outsource professionals who usually do the same task for less cost. There are many benefits in outsourcing your software development to destinations around the world. Some of them are:

  1. Innovation and Quality
  2. Shared responsibility
  3. Reduced Costs

1. Innovation and Quality

 

With increased market competition, the successful management of change is crucial to firm survival and success. Quality improvement and innovation have therefore become established strategies as firms seek to create and defend their competitive position

In a competitive context and in an uncertain economic environment, the access to the best available technologies and the creation of value -among others- are two objectives that a service firm cannot always reach in-house by its own means.

It is for this reason that many firms have resorted to new ways of managing the relationships with their environment. Indeed, the most frequently used organizational strategies are establishing new forms of collaboration with research centers or clients, using new methods of integration with suppliers and outsourcing an organization’s own services.

We are in a new era of software development. The technology stacks being used by engineers have changed, and they must not only understand how to develop for new platforms today, but also develop for what those platforms might look like five, or even ten, years from now. Because innovation is such a key part of software engineering today, projects need to be developed with an understanding of long-term business value, as well as long-term functionality.

Outsourcing undergoes natural transitions as the markets, technologies and demands change. We’ve gone from highly siloed, IT-centric operations to outsourcing being looked at as a key piece driving innovation within critical industries. The hybrid outsourcing model is intriguing and disruptive. We could be seeing significant technological shifts in the near future using new models with new, innovative priorities.

2. Shared responsibility

 

Outsourcing is the act of contracting with a third party to perform some service. Over the last fifteen years, outsourcing for businesses has grown from traditional outsourcing of facilities management (janitorial services, security, cafeterias) to outsourcing more administrative support functions like Information Technology, Finance and Accounting, Human Resources.

Shared Services is the delivery of those functions or processes that can be delivered to the corporation from a “shared” delivery model. This ‘sharing’ not only leverages the delivery of services across business units, but also represents a ‘sharing’ of accountabilities and responsibilities between the shared services organisation and it’s customers.

Smaller businesses usually do not have the dedicated personnel, budgeted resources or the management focus needed to carry out a comparable vendor management program. However, the smallest company can take steps to help manage third-party cyber risk. One of the most critical aspects of vendor management is executing a well-written contract.

While outsourced IT services provide a multitude of benefits for any business, especially at small to midsize businesses where resources and IT budgets are limited, allowing your data to be under the care, custody and control of a third party brings significant risk. Implementing simple vendor management procedures and having strong contracts in place with any outsourced provider is essential to properly managing such risk and to ultimately protecting your balance sheet and reputation.

3. Reduced Costs

 

In today’s market, it is more important than ever to be quick and efficient. If your in-house technology is not functioning at an optimal level, it will affect every single aspect of your company’s capabilities. Consulting with IT experts outside of your company will allow you and your team members to operate at their best.

Cost is one of the main reasons most companies consider outsourcing software development. The average cost of a software engineer is far less in Eastern Europe than the United States or Germany. Eastern European countries like Bulgaria, Romania and Ukraine produce high-quality programmers at reasonable costs. The right course is looking for the best engineer for the price, not necessarily the lowest cost engineer .

Workforce in most countries offering IT outsourcing is sufficiently lower than in the USA or Western Europe. Outsourced labor in Eastern Europe is the perfect example when comparing with labor performed in-house in North America and Western Europe. Also it does not require any initial investment!

When working internal, to the actual salaries you’ll add up the costs of hiring, training, and housing staff. Whether you require a team of 10 or 100 specialists, it is more convenient to outsource an entire project than to hire each developer individually and place the developers on internal teams.

Additionally, you don’t need to purchase equipment or other supplies required for software development. The main objective of offshore companies is to provide customers with the best possible material handling solution at a reasonable price.