Outsourcing has revolutionized how businesses are done in almost all sectors. It was a gradual process, which evolved with time and according to the latest industry requirement. The basis for business outsourcing is to hasten the pace of a business and boost efficiency in a cost-effective way. Taking into account the dynamism of the complex business operation these days, outsourcing is definitely a blessing for all industry verticals.
Outsourcing software development is one of the main ways of launching an organization within a limited budget. When comparing the process with in-house development, which needs regular salaries, procurement, workspace, outsourcing becomes a very cost-effective solution, especially for startups.
Companies outsource for several reasons. Some of the most common ones include:
- Enhancing company focus
- Reduce and control operating expenses
- Access to world-class capabilities
- Increasing or streamlining efficiency for time-consuming tasks
- Freeing internal resources for other purposes
- Sharing risks with a partner company
- Maximize the use of external resource
THE MOST COMMON BENEFITS OF OUTSOURCING
A global outsourcing survey conducted in 2016 highlighted the most common benefits that business organizations could derive from the process. Fifty-nine percent consider the IT outsourcing models as a more cost-cutting solution compared to hiring and maintaining a team in-house. Fifty-seven percent state that the process enables them to focus more on the main business goals.
Open communication, as well as executive support, are particularly critical to successful outsourcing. Further consideration should be for a workable SLA or Service Level Agreement that is available openly, to all the involved staff. Whatever the outcome of the arrangement, managing change is critical to the success of the process. Assessing the requirements of the stakeholder is the first part of the process. Furthermore, having open communication channels during this time are relevant. Everyone concerned must be involved in the process.
WHAT MAKES SOFTWARE OUTSOURCING SO POPULAR?
The following are some of the reasons for the popularity of outsourcing and the reasons for outsourcing today.
- Offshore development access. Opportunities provided to a business gets limitless due to the different developments in the software. If one has an advanced infrastructure, along with an agile software development firm, definitely, more and more advancement would be achieved wherein a company could have a robust foundation for opportunity acquisition.
- Profound advertisement strategies. Today, everything tends to be much faster, more convenient and easier via the concept of the IoT, wherein marketing strategies are highly benefited. There are several agile software developers that could help greatly when it comes t the advertisement as well as internet promotion. Thus, software development is a great help in boosting business advantage.
- Utmost expertise and professional skills. There would be more emphasis in obtaining all the results desired, and at the same time could deliver the core requirements of the business.
- Freedom. Software development outsourcing would also provide freedom in providing specifications as well as discussing important details, along with the offshore team to have a satisfying and complete project. Moreover, one could set realistic goals.
- Innovative techniques. If the business has a reliable and excellent software developer, chances are, there would be better aces to feature-rich and effective software to obtain all the results desired.
HOW TO FIND THE RIGHT SOFTWARE OUTSOURCING PARTNER
When deciding to go with an outsourcing development model for a startup, the next step is to look for the right outsourcing partner. The quality of the product and eventual success greatly depends on who develops it. How to narrow down the thousands of choices of service providers is a nightmare. The following are three rules of choosing the right software development outsourcing partner.
- Do research. Begin with a Google search and make use of the right keywords when it comes to industry sector, technology and location of companies to work with. Broaden the search with job marketplaces such as Upwork. Also, LinkedIn offers terrific value if used correctly. Check out employees of the company in mind and determine their background as well as skills. At the end of this stage, an organization should be able to narrow down the list to five or seven service providers.
- Look at the provider from the point of view of structure, history and projects. It’s similar to interviewing a job applicant. Thus, the first thing is to check out the portfolio, such as what the work entails, who their former clients were, what technology they typically use. A good service provider makes it easy for one to navigate the portfolio and find answers to the questions. Other things to take into account include the size of the team. Also, don’t forget to ask references from three companies that have hired the service provider in the past.
- Consider if the software development partner add value to the business. Consider if the provider has done their research on the business and if they are familiar with the competition. Determine if they offer interesting ideas when it comes to tech stack implementation as well as strategy. There are several things to take into account to determine if the team would bring added value to a company.
TWO MAJOR CONTRACT TYPES
Choosing the right software outsourcing partner is more than a formality. It defines the basic principles of collaboration between the company and the software development partner. There are two major contract types, namely, Fixed Price and Dedicated Team.
FIXED PRICE SOFTWARE DEVELOPMENT CONTRACT
Fixed price presupposes the delivery of a turn-key product. This best works for startups, which are mostly smaller projects that has to enter the market. For this purpose, the product itself should be defined clearly. The essential requirements include UI/UX design that helps to understand fully how the product works, acceptance criteria, spec with detailed requirements. Once the documentation is elaborated with the development team, the product could be estimated precisely. The price and scope would then be approve and development commences.
DEDICATED TEAM APPROACH
In contrast to Fixed Price, the flexible approach of a dedicated team is perfect for software product development that’s ongoing. This is the optimal solution for huge projects, like ERP systems as well as for established startups that need to grow their tech department.
There are indeed tremendous benefits of outsourcing as a business grows. The outsourcing or offshore partner should provide with advanced technology expertise, processes, effective communication and flexibility to help achieve business goals.