The 21st century is a digital era, probably heard about the rise of the software development industry. In recent years, technology has huge impact on all our lives, the software industry revolutionized the way of doing business.
What is software development Outsourcing?
Software development outsourcing is a process when companies choose another company to develop software for them. Basically, a company hires an external software team to handle the responsibility of software development. Outsourcing has many advantages including improving customer service, saving time and money, reducing risk, and enhancing security.
Benefits of outsourcing software development
Accessing new skills and expertise
Outsource your software development will be able to find an expert team that will help your organization to grow. By outsourcing, you are not limited by your geolocation, you have access to superior-tech talent worldwide. When you go for an outsourcing software development company browse the company’s portfolio, check the reviews, customers’ feedback you will find a good team for your project needs.
When you go for outsourcing software development you only pay for the expertise you need. Companies that are growing rapidly meet new requirements and finding resources for tasks within the team is expensive and inappropriate. The one of primary advantages companies seeks when outsourcing software development is an increase in project resources in a short time.
Lower costs and save time
If a company goes to hire an in-house team for software development this will be too costly, time-consuming, and hectic. Software outsourcing reduces the office, software, hardware, and infrastructure costs, and saves time so you can focus on your core business.
Improved quality and reduce risk
When you outsourced an experienced and professional software development team they will help you to achieve the best product quality. The skilled team identifies bugs and issues easily, this will help reduce the risk of errors.
Focus on core business
It is easy to distract by dividing your time into different activities, like hiring an in-house team, training them, and so on. Outsourcing is the solution to all these problems and helps business leaders focus on their core business.
Innostax is a leading offshore software development company in India, with more than 10 years of experience delivering highly scalable and affordable software. As software experts, build web and mobile applications, help in choosing the right development technology important for a business.
Software outsourcing types
There are different types of software outsourcing methods like:
In Onsite outsourcing, the agency sends their experienced and high skilled employees to the client location. The period of onsite is limited and work conditions (place of work, assets, duration, control functions) can be agreed upon flexibility.
In onshore outsourcing, the business can contract with any other software development company whose premises are based in the same country. Its several benefits to consider, communication is easier(native language, time zone), and no dealing with cultural differences.
Nearshore outsourcing refers to services delivered from another country, usually in the same continent, neighbor, or a very similar time zone. For instance, a company based in the United Kingdom outsources software development services to nearby countries like Belgium, Denmark, Poland, etc.
Offshore outsourcing is the process of hiring a software development company from any feasible country. This outsourcing model prefers to hire talented resources across the globe, where they deliver high-performing superior-quality services at a cost-effective budget. Businesses around the world reach crossroads for outsourcing and take benefit of offshore software development services.
Out of these nearshore and offshore outsourcing are the two most largely accepted, both models play an extensive role in delivering profitable results to the client.
How to choose the right software development company
Choosing a software development company for your project needs is a tough task. The wrong choice of an outsourced partner leads to delays, and badly build software, and apps. When business leaders are looking to outsource software development there are a few things to keep in mind:
Check portfolio and expertise
When you contact many companies, now it’s time to compare software companies’ portfolios and customer reviews. Your main objective in outsourcing is to choose the best agency that has the experience and the ability to work on your project. Company previous work experience and client feedback give you an idea about how they work.
Good communication is key to maintaining a good work relationship. Don’t choose a company that only does coding, and talks in only complex technical language. Make sure the agency you outsource provides a systematic communication process, always able to discuss, share and clarify ideas.
The purpose of choosing an outsourcing software development company is to hand over projects to experienced skilled developers who built quality software. Check your outsource partner’s previous projects feedback, and include user testing, ongoing testing, and scale solutions on your project.
Agile software development seeks to deliver the right product, with incremental and regular delivery of small pieces of functionality. Choose a software development company that corporate with you even after finishing the project. Agile methods are differently understood by every company, so you should clarify everything beforehand.
Understand your goals, objectives, and timeframe
A good outsourcing company should understand your goals, objectives, and what you want from them. Having development knowledge is not enough, you and your software outsourcing partner be on the same page for the project scope. It saves your time if the outsourcing company knows your goals, objective, and timeframe when to deliver.
Reasons why startups should outsource software development?
As per research, approximately 45% of startups fail because of funds shortage. In the early stage of a startup, it is hard to afford in-house software development and huge expenses for different works, and no guarantee of positive results. Software Outsourcing is the only solution through which you can solve these problems, you don’t need to set up office space, hire employees, or distract your time. Your outsourcing partner builds a quality product for you in your agreed budget.
Access to talented resources
Outsourcing software is a great decision through this you can access the best global skilled, talented developers. Through outsourcing, you are not bounded to top talents in your area, you have access to world talent and an opportunity to hire the best for your project. With outsourcing your geolocation is not limited you can hire the best team from popular outsourcing countries like India, Ukraine, Poland, Argentina, and so on.
No need to micromanage
Micromanaging destroy companies, if you are the boss of a company and control every part of your company then it will have negative effects. When you hire a outsource software company, you’re free from your responsibility of micromanaging the team. Now you can focus on your core work and other important tasks, the outsourcing company project manager ensures that everything is on right track. And in case of any issues, it’s their responsibility to take care of all matters.
Minimum risk maximum flexibility
Risk is always there whether it is in-house or outsourced but generally, the risk is lower when you choose to outsource. You only outsource a software company to develop your business after testing their skills and capabilities. Outsourced developers are experienced they refresh their skills to meet the demands of all their clients. Outsourced developers are more flexible than in-house, they understand clients’ requirements may change during the project.
Faster time to market
Software development outsourcing helps you to dictate timelines as per your plan. Global tech corporations have gradually realized the importance of speed to leverage their competitive edge. The software development outsourcing team launches your product faster time to market, you don’t have to rely upon an in-house team and spend much time on project management.
Best offshore software development countries
Outsourcing software development helps businesses to reduce cost spending without losing the quality of the project. A qualified outsourcing software team can perfect partner for both startups and settled companies, low cost is one of the main edges of outsourcing software development.
There are many popular offshore software development countries around the world. These countries are from the regions: Asia, Europe, and Latin America.
Asia offshore software development countries include India, Vietnam, China, and Philippines.
Europe offshore software development countries include Ukraine, Hungary, Romania, Bulgaria, Poland.
Latin America offshore software development countries include Argentina and Brazil.
Software development outsourcing contract details
You choose your software development partner, now the next important step is to sign the software development outsourcing contract.
Project Time and Budget
You should identify the cost of projects, development phases, milestones and their deadlines, responsibilities for the delay, and so on. Decide the exact budget of working hours staunch to your project.
Services to be provided
The sections should describe the detailed services you need for your project, and what you expect from your outsourcing partner. As well as the process for changes to the extent in the future regarding your software.
Intellectual property rights
IP rights are crucial in every outsourcing agreement, the end product is the client property, it does not belong to the developer or the outsourcing company. Make sure to use your clauses, and ensure IP rights.
The confidential engagement section specifies which information is confidential and the responsibility and consequences of its disclosure. Ensure the most favorable extent of your confidentiality engagement.
Personal data protection and final provisions
This is the outsourcing partner’s responsibility to protect the personal data of the client. Final provisions may include contact details and choice of applicable law and jurisdiction.
Future of software development industry
Revenue in the software industry is projected to reach more than US$608 billion in 2022.
The industry’s largest segment is enterprise software with a projected market volume of more than US$243 billion in 2022.
Revenue is expected to grow to a market volume of US$806 billion by 2027.
Businesses get outsource software development services to effectively cut costs and get a good outcome in their projects. According to research by Commit (ICT research community), software development outsourcing at startups is expected to increase between 2022 and 2023. The global software development outsourcing market will expect to grow to US$103 billion by 2027, according to Statista reports.
The IT outsourcing market value expects to grow at a 5% CAGR between 2021 and 2024, according to Global Industry Analytics Report.