Is Outsourcing Software Development a Good Idea for Your Business?

Is Outsourcing Software Development a Good Idea for Your Business?

Outsourcing to a custom software development company has several benefits. Here’s why outsourcing software development services is a good idea.

The IT outsourcing market will generate $413.72 billion in revenue by the end of 2021, estimates Statista. The growing demand for outsourcing software development services is a key contributor to this expansion. While large-scale enterprises have been outsourcing for years, small businesses need to explore how they can best outsource the process to get the best results.

As digitalization increases, companies focus on building software products for B2B and B2C aspects of their business. While many companies realize that their authority & control over the process may be divided, 78% of the stakeholders feel positive about outsourcing custom application development services.

We are trying to answer the question of whether outsourcing is a good idea for your business or not. Simply said, outsourcing to an offshore custom software development company is not a one-stop solution for all software needs.

However, cost-cutting, efficiency, and focus on core competencies are some benefits of outsourcing software development that make it a preferred choice for companies.

This article will help companies understand if outsourcing to a custom software development company is a good idea or not. It will highlight the benefits of outsourcing and how it will help businesses with their software needs.

Benefits of Outsourcing Software Development (Why it’s good)

While everyone knows that outsourcing to an enterprise software development company brings down the cost, there are several other benefits as well. Outsourcing covers a whole lot of areas that can lead to great cost, time, and effort savings for any company.

Here’s why outsourcing software is good for your business -

Focus on core competencies

  • 57% of companies feel that outsourcing helps them to focus on their core competencies. Businesses can work on their key processes and leave the software development to the offshore company.
  • However, the company can also focus on its core digital product and outsource the support and maintenance process to the software outsourcing company.
  • While managing the IT administrative tasks and building a software product at the same time can be challenging, outsourcing software development services can take the hassle out of the process and leave you more time to focus on more important things.

Cutting down costs

  • Maximum companies outsource the software development process to cut down costs. They can outsource developer to work on the project and save costs by hiring a team from low-cost countries.
  • On top of that, companies only need to pay a fixed fee for the custom application development services by the outsourcing partner. They will save a lot of money on paying other expenses like compensations, perks, benefits, insurance, and more as the outsourced company will take care of it.

Access to world-class talent

  • Often, companies don’t have the expertise for a certain technology or industry to build their digital product. In this case, outsourcing web application development services come to the rescue.
  • Hiring cutting-edge innovators and thinkers and engineers becomes easy with outsourcing. There’s no need to look for developers and hire them on the team. Working with an offshore software development company gives access to world-class talent that companies may not find anywhere.
  • These developers and engineers are hired on a per-project basis. Therefore, when the work is done, expertise can be let go. Since the specialists will demand a high amount of money, it makes sense to outsource to a company that has a lot of experts on board.

Easy project scaling

  • A software outsourcing company enables easy scaling when there's a heavy need for developers and market dynamics are changing rapidly. Enterprises can hire developers from the outsourcing partner when they need additional resources.
  • Scaling requires access to resources at a whim. Heavy traffic requirements may lead the enterprise to hire more people who can scale the application using better infrastructure and equipment.
  • It is one of the best benefits of outsourcing software development - flexible scaling. When the work is done, and the application has achieved scaling, the company can let the outsourced developers go. And when they need them again, they can hire without any hassle.

Timely software development

  • Deadline delivery is one of the best things that companies can get out of outsourcing. Each developer is working to achieve a certain outcome from specific tasks that need to be done before a timeline. In such a case, building software solutions on time happens automatically.
  • In-house developers may lack clarity about the delivery date because they work on different aspects of the project. Outsourced developers have a set goal in mind that they need to achieve so that they can move on to another project.

Outsourcing Software Development Costs

Understanding the benefits of outsourcing may triumph over the costs involved in hiring the outsourcing company. In essence, the cost of working with an outsourced custom software development company depends upon the complexity of the project.

Determining the cost of outsourcing involves a lot of factors - industry, product features, timeline, resources involved, and more. Therefore, it is recommended to companies to take estimation from different companies before setting their mind on one. Generally, the cost may vary from $25,000 to $100,000, depending on the project.

While there are so many advantages of outsourcing, the cons are pretty much negligible. Only two outsourcing software development risks come to mind. One - many people think that cultural barriers may hinder the process, but today, everyone speaks English and respects each other’s culture. So it’s not going to be a problem for enterprises that really want to scale.

There is also the issue of data theft and security vulnerabilities. In such a case, signing an NDA is a great idea to ensure that data protection is always within you. No software outsourcing company will have any problem with signing a contract for securing data.

In essence, outsourcing is a win-win situation for both the company and the outsourced partner. It is a good idea to hire an offshore software development company because it will deliver the best product and affordable prices.