Software Development Outsourcing: Dead Or Alive?
To gain a competitive edge in the current scenario, an IT-based company needs control and speed.
Control to maintain the budget, capabilities, and resources required for the software development process.
Speed to get the software solution to the market as fast as possible. However, outsourcing software development might be better if an in-house IT department is overburdened or budget constraints are too high.
Businesses can outsource a part or the entire project to a more experienced and cost-effective software outsourcing company.
Outsourcing development can save you money and time in the long run. It allows you to focus on the other critical aspects of your business while someone else is taking care of your development part.
So, if you’re still thinking software outsourcing is dead, read on for more clarity!
Is Software Outsourcing Dead?
No way! The outsourcing statistics below do not indicate this. Outsourcing provides a competitive edge to any firm by allowing it to deal with IT skill shortages, gain access to top-tier capabilities, and reduce costs. Therefore, if it works for your competitors, it should also work for you.
In the age of digital transformation and limitless technology potential, businesses of all sizes are searching for leading-edge IT outsourcing trends.
A Look Upon Software Development Outsourcing Statistics
Many online sources are conducting surveys to forecast the growth of Software Development Outsourcing Services. Let’s look at the most reliable statistics to understand growth metrics better.
- According to Statista, the global outsourcing market is worth $92.5 billion. IT Outsourcing alone made up $66.5 Billion in sales.
Software outsourcing companies generate more than 50% of global outsourcing value.
- According to Krusche, IT or software outsourcing only held a 22% global market share in 2020. The figure will rise to 25% by the year 2025.
Therefore, outsourcing will continue to grow in 2023, earning a substantial profit and market share.
- Over 34% of the companies are changing their strategies and availing of software outsourcing services. However, only 9% of people are considering an in-house development team for software.
Last year its contribution to the global market was 50%. Therefore, the above statistics illustrate that software development sourcing will continue to rise to 70% in 2023 and beyond.
Common Software Outsourcing Myths
There are plenty of misconceptions that businesses have about the software outsourcing process.
So, in the following section, we will look into the six common myths about software outsourcing and the truth behind them.
#1 Outsourcing Is Complicated
Adding an outsourcing partnership to your business model might seem overwhelming and demanding. However, it may be easier than you might think.
Managing an outsourced team should require less effort and supervision than managing an in-house team. The outsourced team can even help lessen your workload in the long run.
Setting up an outsourcing arrangement may differ from hiring in-house, but it isn’t necessarily more complicated.
It is because business-to-business (B2B) relationships can be very similar to business-to-consumer (B2C) relationships. Companies hiring outsourcing firms can benefit from a personalized and straightforward onboarding process. You can ensure this by selecting the right outsourcing partner.
In fact, compared to building an in-house team from scratch, outsourcing is easier. Once a partnership is in place, it’ll be the outsourcer’s responsibility to handle your workload.
#2 Outsourcing Results In Low-Quality Deliverables
One of the most common myths about software outsourcing is that it leads to low-quality deliverables.
Outsourcing can lead to high-quality deliverables as you leverage an external team to help with your project. You should see a significant improvement in your product’s quality, turnaround time, and price when you have outsourced with a skilled team.
A top software outsourcing company can provide excellent services and outstanding products. A business owner can experience poor performance regardless of whether they hire in-house employees or outsource them.
Meanwhile, outsourcing has many benefits and ways to prevent the risks.
#3 Offshore Providers Are Inferior To Onshore Providers
It is one of the common myths in the outsourcing industry, and it’s the opposite. Onshore providers can be more expensive than offshore providers, but they are typically more qualified and have a better understanding of local culture and business practices.
Onshore providers are also easier to manage as they don’t require as much cultural or language training as their offshore counterparts, who often speak English as a second language.
#4 You Will Lose Control Over Your Project
It is false! You will have the same control over your project as if you had developed it yourself.
Plus, you can communicate with the outsourced team through video conferencing and chat apps such as Skype, so there’s no need to fly halfway across the world to make a few changes or train a new employee on how to use your software.
#5 Time-Zone Differences Affect Productivity
Offshore outsourcing is often criticized for causing scheduling issues due to time zone differences.
Despite that, your business and the outsourcing service provider can communicate effectively during overlapping hours, hold meetings and discuss new strategies.
Outsourcing firms might negotiate to have meetings before or after work hours when it suits you.
These time differences can work in your favor too.
Your respective work hours will be more productive if you have a more significant time difference.
In this way, you can increase your business’s efficiency and create a 24-hour cycle of productivity.
Must Read: A Complete Guide On Software Product Development Life Cycle
Why Do Companies Outsource?
Outsourcing software development can save money on product development while ensuring that you’re still getting top-quality, innovative software with less burden.
Here are some benefits you can experience when outsourcing software development to professionals.
Cost Savings
One of the essential advantages of outsourcing software development is cost saving. Hiring developers can be costly, but outsourcing your project to a third-party provider can get highly trained professionals at a reasonable cost.
It can be beneficial if you have just started your business or have limited funds for startup expenses.
Increased Efficiency
Outsourcing software development allows companies to increase efficiency by focusing on their core competencies. By outsourcing software development, the company can focus on other important tasks and outsource the work where they lack expertise.
In this way, businesses can save money by not hiring a large in-house team of developers.
Focus On Core Business Activities
A lot of companies outsource software development so they can focus on their core business. With outsourcing, they don’t have to worry about the day-to-day process and management of hiring software developers, which frees up time for them.
Reduce Risks
When you outsource your software development, you can reduce your risks. When you’re developing software, there are always multiple things that could go wrong.
You will not have to worry about these mistakes by outsourcing the software development process, as IT professionals will do your work.
Get A Competitive Edge
Outsourcing software development can give your company a competitive advantage in the marketplace.
If you have just started your business or want your product to grow in the market, consider outsourcing software development to get a competitive edge. The process will help you create and launch your product faster than if you had attempted to do it on your own.
Get Access To Expertise
Software product development outsourcing needs can give you access to more expertise and knowledge than you could ever hope for. Outsourcing experts in various fields means you can easily find and train someone internally.
Therefore, it can be a great way to access the expertise you need without hiring an in-house developer.
Conclusion
With such clarity and multiple benefits, it is so evident that software outsourcing is going to be a game changer in the coming years.
But, you should always be very careful when choosing an outsourcing partner.
A leading software outsourcing company enables many businesses to gain operational efficiency, mitigate risk, improve customer experience, and reduce costs.
So, now is the perfect time to hire an experienced and dedicated outsourced team of professionals to gain a competitive advantage.
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