November 20, 2023
Uncertain about outsourcing software development?
Is there any doubt that software development outsourcing can work for you? If so, is it because you haven’t tried it, or worse - had a bad experience with a prior attempt? Let us reassure you that software development outsourcing DOES work. You and your company can benefit greatly from this strategy. Although there are many things to consider, such as the outsourcing model and the outsourced team, you won't have to ask, “Will this work?” We can confidently say this because of our experience with hundreds of customers and thousands of successful projects using software development outsourcing. In our client testimonials and case studies, you'll see that outsourcing works for many reasons.
Four reasons outsourcing software development works most often are:
- Ability to scale
- Reduce or control costs
- Increase flexibility
- (Re)focus on company core competencies
Reason 1 - Scale On Demand
The simplest visual of the ability to scale is the gas pedal in your car. Do you want to accelerate your speed (“scale up”)? Then, pedal to the floor. Do you want to decelerate (“scale back”)? Then, ease off the pedal. A car is designed to scale up or down in speed by pressing on the gas pedal. No mechanical overhauls are needed to vary speed. The ability to scale is literally on demand.
No manufacturing company's business process would be without strategies to scale production output. But, too many tech teams are caught flat-footed when the need to scale up business-critical software production arises. Time-to-respond can be measured in multiple weeks to get started… followed by months and months of programming.
Onboarding new employees is time-consuming, especially for a small business. Despite all the online tools and hiring options available today, recruiting and training new employees takes time and energy. A BAD hiring decision is worse than having made no hire at all! What do you do with all these new hires if you need to scale up only temporarily? Nobody wants to go through layoffs.
Outsourcing companies can step in when needed and out when needs are met. Your future outsourcing partner has deep benches of qualified, proven developers to take on your next project. This cost-saving solution fulfilled business needs with specialized skills that you may not have or need in-house.
Takeaway: Software development outsourcing works because a capable partner allows you to scale your ability to generate production software.
Reason 2 - Reduce Costs
There’s a famous saying: “Price is NEVER irrelevant.” Appropriately done, a strategy of software development outsourcing is cost-saving. Let’s be clear - cost saving may not be the MAIN reason you should consider outsourcing, and price is rarely the ONLY reason you outsource. However, you will find that software development outsourcing is a real lower-cost opportunity.
Internal staff have overhead costs such as salaries, insurance, taxes, and other benefits that are part of the company's costs. In addition, internal staff must be perpetually managed, equipped with tools and human resources, and given a training or personal development plan (PDP). Most companies must provide office workspace for their staff. Although this can be useful for your primary business operations, all of this adds to expense.
Do the math for yourself. The cost savings will become clear if you properly compare outsourcing rates to your Total Cost of Ownership (TCO) for in-house software development staff. There are many pricing models to choose from that help you align your outsourcing provider with your budget, so don't worry about prices being fixed. The outsourcing industry is much more than saving money; it is a benefit that makes many small businesses sign the outsourcing contract.
Takeaway: Software development outsourcing works because you can achieve real cost savings compared to the traditional method of relying exclusively on in-house programming staff.
Reason 3 - Increase Your Flexibility
Your company’s situation is fluid. Change happens. What causes change?
- New, ambitious revenue goals (Take that hill!)
- Regulatory changes (Ouch!)
- Innovation and New Product Ideas (Eureka!)
- Competition (Shark in the Water!)
When changes happen, your business software needs to adapt. Your outsourcing company is not only a service provider but an extension of your team. Software development outsourcing allows greater flexibility to adapt and respond to business conditions with good economics rapidly. Your internal IT staff may be great workers who are highly skilled at what they do. However, they have a finite skill set and can only adapt to changing needs within limits.
The booming outsourcing partner punches through the ceiling of limitations caused by your staff's finite size and skills. You can access a team of developers ready to attack your development needs. You can tap into limited technical skills - or don’t exist within your staff. You can lean on specialized expertise and experience honed over multiple projects like yours.
Takeaway: Software development outsourcing is a game-changer for your company’s ability to flex and exploit the need for change. Too many business stories of companies lost market share and became irrelevant because of low flexibility and the ability to change. Don’t be one of those companies!
Reason 4 - Focus on Your Core Competencies
What is the “secret sauce” distinguishes your goods or services in the marketplace? What allows you to carve out the market niche you’re succeeding in? What must your company be uniquely good at to maintain your brand and grow market share? In other words - what are your core competencies?
Whether a company is outsourcing software development or outsourcing some other critical business area need, outsourcing helps you refocus your attention on your core competency. Whether it be customer service or internal business operations, an external company dedicated to a specific task can leave you with time to refocus on core business functions. For instance, most companies need access to shipping and logistics expertise but don’t need to manage a trucking fleet. An auto manufacturer needs thousands of parts for a completely assembled car, but NEVER manufacture all the necessary components in-house. Likewise, 21st-century companies need high-quality software, but the ability to run a “software factory” doesn’t need to be a core competency.
Takeaway: Software development outsourcing works because you can focus on your company’s core competency by exploiting the expertise and core competency of a vendor whose ONLY focus is developing quality software for other companies... like your company!
We Ensure Outsourcing Works for You
We know that outsourcing software development can be a win for you and your company. Outsourcing is more than any one of these functions, it is a mutually beneficial partnership. That’s because Accelerance is the global expert in outsourcing software development. We have invested years in locating and certifying the top software development companies across the globe. We partner with you to prepare your company for outsourcing, match you with the right offshore development team, and bring our elite US-based coaches alongside you to ensure success every step of the way. Talk to us and see how you can start your outsourcing journey.
