Explain Like I'm Five: Software Development Outsourcing
This post is part of the series Explain Like I'm Five, which aims to make tech concepts and terms easy to understand. In this two minutes read, we'll explain the market of software outsourcing and why it is very efficient.
Software Development Outsourcing: Full Guide
The developing market of software outsourcing has no shortage of clients as more and more businesses opt for a convenient, fast, and cost-efficient approach to software development.
Technologies are evolving at a stunning pace. What’s innovative today is outdated tomorrow. Companies that fail to keep up with recent advances quickly get left behind in the race for profits. To stay ahead of the competition, businesses shift their strategies towards outsourcing, achieving the flexibility an in-house development team would never provide.
Wonder if your company could benefit from delegating some of the software-related tasks to a third party? Which outsourcing model would fit your project the best? How to find a reliable contractor that focuses on the result instead of profits? Then delve deeper into the world of IT outsourcing and learn what new it brings to the table.
What is software outsourcing?
For modern businesses, keeping a large staff is ineffective and unprofitable. It’s more rational to transfer the most budget-eating tasks, like software development, to an outsourcing company. But the whole idea of letting someone else do your job raises a few questions.
First and foremost, what is software outsourcing, anyway? In simple terms, software outsourcing is a form of arrangement where a company hires an independent team of programmers to work on a software-related project instead of performing all tasks in-house. Typically, the outsourcing vendor is better equipped and experienced to handle the project than the client’s staff, ensuring high development speed and shorter time to market.
Today, technologies dictate the rules. Tech-savvy companies win customers, earn a reputation and go international in a couple of years. At the same time, businesses relying on outdated software flop before they even go profitable. In addition to giving you an edge over your less-advanced competitors, IT outsourcing also allows for a cost-efficient business model with fewer processes to keep track of.
Every company has a choice – to deal with a software project on their own or turn to an outsourcing company. Large enterprises rely on the services of third-party contractors because the larger the scale, the more difficult it becomes to control the implementation and the overall quality of results. Smaller businesses are switching to outsourcing to minimize the costs of maintaining full-time employees and receive A-grade services in supporting areas.
Outsourcing is the answer when you know your needs and seek to optimize costs. That is, you have enough experience to figure out which tasks should be done within the company and which are better to be delegated.
How does software outsourcing work?
Basically, an outsourcing company provides extra hands. The outsourcing vendor hires employees and forms its own staff. Then they find a customer who needs a contractor to perform particular tasks and, once the conditions are agreed upon, provides employees to get the job done.
Let’s say you need an automated email server that would be sending thousands of messages a day. The application must allow multiple remote users to access the system and send emails in a few clicks. A task like this would probably require people experienced in .NET Framework 4, ASP.Net, MVC 2, jQuery, Microsoft SQL Server, and so on.
At the same time, you need software that would automatically transfer money to a credit card or PayPal account, which requires Authorize.Net and PayPal integration. This means augmenting your team with someone who digs in PayPal API and Authorize.Net API.
Both are one-time projects, so forming an in-house development team makes no sense – they simply won’t have enough work to make it worth the money. Instead, you find an outsourcing company that takes over the bulk of the job, while you’re busy with your company’s day-to-day tasks. The vendor reviews the projects and estimates the costs. As a customer, you only need to fund the project and follow its progress.
Why to outsource software development?
Globalization and IT innovations provide companies with opportunities to save resources and optimize business processes. But why do companies outsource software-related projects instead of using those opportunities to form an ultimate development team? Delegating some functions to third-party businesses allows you to cut costs on the one hand and shift your focus towards developing the main areas of activity on the other. This is also a simple way to attract external resources – knowledge, experience, and assets with minimal administrative obligations and related risks.
Key reasons to outsource software development
Outsourcing saves time and gives you room for development. When it comes to small and medium-sized businesses, outsourcing helps to focus on administrative and operational tasks and take some load off of your staff, using human and financial resources with greater efficiency.
New connections and business opportunities. Depending on the outsourcing type you choose, you may get access to a foreign market with its useful contacts, talent pool, technologies, potential revenues, and growth prospects.
You get to work with a cohesive and motivated team. For outsourcing companies, software development is a business, not a job. To stay ahead of the competition, they need to keep up with high standards of quality. It’s difficult to gain the same level of dedication from in-house employees.
Cost-efficiency. Outsourcing certain functions will reduce operating costs and bump up profits. Opting for an independent IT software outsourcing company instead of your own development team, you translate fixed costs into variable ones and become more flexible, which means more competitive.
Better management. Cranking up a large-scale project, you’ll have to deal with intense problem-solving. With so much pressure going on, your team will eventually start making mistakes, some of which will get past your QA engineers. Hiring a contractor, all you have to do is make sure they follow the terms of the agreement. Fewer tasks for the company to perform means less pressure on your management, giving you space for developing core business areas.
Outsourcing will keep your business compact. The larger the staff, the more trouble you get. Apart from maintaining a complex corporate structure, the company has to manage workplace climate, task management, and other factors that bring down efficiency. With a separate team working on your project remotely, handling your own crew won’t be much of a hassle. Outsourcing might also be your go-to option if you plan to reorganize your business or optimize operating costs.
Faster development. Time to market is no joke, so introducing your software to the consumer ASAP is in your best interest. Third-party IT firms easily keep up with tight deadlines thanks to years of experience and experienced team members, delivering results in the shortest terms.
The scale of outsourcing depends on the company’s needs and financial capabilities. Some businesses delegate two or three tasks, while others prefer to keep a close-knit staff of ten employees, having the bulk of work done by contractor firms. But the major reasons why companies outsource software development are the same – to boost the flexibility of the company’s business model and bring down operating costs. Considering the growing popularity of outsourcing, it does a pretty good job delivering on both promises.
How much does it cost to outsource software development?
Today, outsourcing opens endless possibilities for software development. You’re free to choose between local vendors, companies from neighboring countries, or even go overseas to find a perfect team that meets your standards. Regardless of your choice, you’ll see that every company is unique in its own way, which results in a wide range of pricing options.
Why is Intoteq your reliable software outsourcing company?
Intoteq is fully committed to providing software that meets the highest demands of the customer. If you are looking for a vendor who keeps the standards high and costs low, then our team will gladly take over your project.
Our development expertise : Need an awesome UI design for your app? No problem! Want a top-notch online store with various payment methods? You got it! We have expert teams for all major software-related tasks that quickly adapt to rapidly changing requirements. Need something non-standard? We will get you engineers with strong tech skills and niche domain expertise, eager to take on a unique, challenging project.
Excellent code quality : At Intoteq, we strongly believe that good code should be concise and clean. These two Cs make the foundation of every project we embark on.
Customers all over the world : Since 2019 we have worked on projects for small and large businesses around the globe.
Flexible pricing : In software outsourcing, there are no one-size-fits-all solutions. If your project needs extra attention with a pinch of extraordinary, we will assess the costs and reach a mutually beneficial agreement.
Focus on results : Your software is our challenge, and we love challenges. No matter how large the project is, our team will keep working on it until it meets your standards of quality.