Software outsourcing can be an incredibly profitable business strategy, but it also has downsides. To help you decide whether or not this approach is right for your business, this article will outline both the pros and cons of software outsourcing to make an informed decision about how best to proceed with your plans.
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The Pros and Cons of Software Outsourcing
Advantages or Pros of Software Outsourcing
You’ve probably heard of software outsourcing and how it can save you a significant amount of money, but what do you know about this process? You may have some idea of what happens, but it can be tough to know precisely how the process works or what benefits you’ll gain from it in the long run.
Cost factors
By hiring a software outsourcing company, you’ll pay far less for your project than if you had contracted with an in-house team.
They can draw on their vast network of engineers in countries like India, who can take on virtually any programming task. An engineer in India earns a mere 25% as much as one in North America.
While in Western Europe? It’s barely 30%. So while a typical software engineer costs around $73 an hour in North America and $44 an hour in Western Europe, you can hire someone for $13-$15 an hour in India— that’s just 10%-20% of what you’d pay if working with someone locally.
Speed
An outsourced development team can get things done much faster than you could do it yourself. The reason? No internal politics.
In-house developers are just as susceptible to office politics like any other employee—maybe more so because they’re also working in a completely different capacity when they develop software.
An outsourced development team is removed from all that and instead focuses on their work 100 percent of the time (and their ability to focus is only increased by being remote). When they get in a zone, they know it’s up to them and their teammates alone—which makes them extremely productive.
Leverage your team’s strengths
Starting out, your team will be small, and you’ll need to focus on its strengths. As new hires join your company, it’s important to hire software developers who fit in with that same general culture.
This includes making sure they have similar skills and strengths as other employees—and then leveraging them accordingly.
For example, if you have a marketing team that is great at branding, getting them involved in every step of product development could save time and result in a more cohesive final product.
Finding the right skillset
Sometimes you can’t find developers with certain skills or backgrounds, and you don’t have time to train new employees. Other times, you may be able to hire someone with a particular skill set, but it will be at an exorbitant price; that’s where outsourcing can help fill in gaps without sacrificing quality.
While it used to be more difficult and cumbersome than doing it all in-house, modern technology has made it much easier and affordable—in fact, some companies do so without even leaving their home office or meeting face-to-face.
This speeds up development cycles and ensures higher productivity since developers are already familiar with each other from working together online rather than having long hours spent building relationships by traveling across different states/countries.
Know more: The Amazing Benefits of Outsourcing IT Through Managed Services
We at Accelerance have a 100% placement track record, where everyone we’ve placed is still in their job today. Our success rate is a testament to our understanding of what makes a great development team.
We aren’t just staffing software developers but building teams with complementary skill sets and personalities that allow them to deliver projects on time and within budget.
Flexibility
One of the outsourcing’s most significant advantages is flexibility. For example, when you hire a team overseas, you save money because you don’t have to employ as many resources; you can hire software engineers as needed and add employees as your business grows or shrinks.
Even if you employ local talent, outsourcing allows for more flexibility—your team will be less likely to quit due to lack of advancement, workplace culture, or other issues that might arise from having all your eggs in one basket.
Ultimately, utilizing technology and offshoring means hiring can be done with greater ease without sacrificing efficiency or quality.
Also read: Top 10 Tools or Softwares for the Virtual Classroom
Disadvantages or Cons of Software Outsourcing
Outsourcing software development has become an increasingly popular practice in recent years, as companies look to hire cheaper and more efficient programmers to complete their projects quickly without sacrificing quality.
However, software outsourcing has many disadvantages that don’t get enough attention, including communication difficulties and the potential loss of intellectual property.
Relative high cost
There are some situations when the service cost may be too high compared with our budget. This can make us think about what kind of services we need and whether we should outsource them at all or not.
If you’re planning to save money, try searching for cheaper services; if you still fail, consider these factors before outsourcing: the better the service, the more expensive the cost.
So if you want your budget under control, try searching for cheaper services. If you’re still wondering what kinds of services are more affordable, here is a list: web design, android apps development and mobile app development (iOS), graphic design, etc.
These disadvantages may even lead us to replace outsourced applications with our solutions in the future. So it is better to know beforehand than be sorry after outsourcing has failed. Searching for more information and getting more advice will help you make a decision faster and won’t let any potential issue be caught by surprise.
It’s time-consuming to find the right contractor/team.
When you contract a software development company, they’ll need to spend time with you to understand your project needs. This isn’t a negative when it comes to outsourcing.
It shows that they are invested in your success and committed to producing quality results! Just be aware that their investment takes time.
Set aside a few weeks or months before you expect them to produce something valuable for you, and make sure everyone is on board with making that investment in advance.
Read more: Reasons to Outsource App Development in India
Miscommunication & Non-Transparency
The main problem of software outsourcing is miscommunication and non-transparency. The software outsourcing process involves a manager who sends a specific project or task to an IT company located in a distant location. As a result, these two parties don’t have direct contact and can only communicate via email.
Sometimes, communication between them goes through their respective assistants and secretaries, which can lead to a loss of important details from both sides as well as a substantial time delay.
One of the biggest problems software development companies face when outsourcing software projects overseas is cultural differences. People in different cultures often have other ideas about how a project should be approached and what constitutes a good solution.
If you work with developers from another country, be sure to provide precise requirements from day one so there’s no confusion about what needs to be done. Communication tools like Skype or Google Chat can make it easier for teams in different locations to collaborate effectively on a project.
Security Risks
Any business has onsite and offsite storage facilities for their data and any sensitive information. Any insider threat, theft, or malicious attack from an external source like hackers can make them easy prey for security risks such as hacking, ransomware attacks, etc.
It is easy for companies to risk their data by outsourcing it and assigning it less important values. Although, the security of company data, or information, is one of the major concerns that must be addressed by any company before making any decision, whether on software development or an order with a foreign outsourcing firm.
But suppose you decide to outsource your requirements. In that case, you need to make sure that your data will still be secured effectively due to a lack of direct control over its storage infrastructure or by monitoring its work processes performed by third-party service providers.
Also Know: Guide to choose a financial outsourcing company for your small business
Wrapping Up The Pros and Cons of Software Outsourcing
The decision to outsource software development requires a lot of thought. It’s not something you can do half-heartedly. Before making any decisions, you should think about how it could affect your company—from long-term growth strategies to short-term payback periods.
On the one hand, outsourcing software development can help startups save time and money on product development while focusing on core products or services. If done incorrectly, it can cost more than in-house software development would have and hurt your company’s image by turning off potential customers.
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