Software Development Outsourcing

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Chudovo OU
  • Date Published
  • Categories Blog
  • Reading Time 4-Minute Read

After modern businesses decided to break new ground in the form of websites and applications, software development became the big cheese.

Outsourcing’s definition implies the exercise in which the company delegates the software development project to third-party vendors. Today, many small and large firms hire external human resources to accomplish their information technology functions with utter proficiency and effectiveness. The best part about the concept of software development outsourcing is that it lets various professionals collaborate, work, and grow together.

The key factors that drive the companies to outsource their project are reduced business costs, access to world-class capabilities, saving time on finding and hiring local specialists, increased flexibility and scalability, and reduction in risks.

Advantages and Disadvantages of Outsourcing

Needless to say, outsourcing is the key solution to allocate the responsibility of a project that is not possible to be completed within the internal range of a company. However, as it is said, ‘There are always two sides of a story,’ outsourcing software development possesses both pros and cons that need to be considered before choosing an IT outsourcing company.

Advantages of Outsourcing

  • Enhanced Expertise – One of the major reasons behind collaborating with outsourcing companies is harnessing the expertise of vendors who are specialized in the field. Moreover, in most cases, specialized external developers also own state-of-the-art equipment and tools that aren’t available in the organization. Ultimately, all this helps in the effective completion of software projects.
  • Bigger Talent Pool – Another plus point of outsourcing development is wider reach to talent and top-notch technological resources. With this being the reason, a company can opt for the most suitable talent for their organizational functions.
  • Cost Reduction – Outsourcing helps to save at least 60% of the in-house team budget of an organization. This is why many bigger organizations plump for external employees that help them provide quality work at less price.
  • Flexible Payment Methods – Unlike internal team members, organizations do not need to pay within a specific duration. Based on the amount of work done and the duration of the project, they can choose comfortable payment terms for the best of organizations. Opting for hourly rates is one of the common approaches that companies prefer the most.
  • Additional Advantages – In addition to the aforesaid, there are various other benefits of outsourcing software development that help companies be on the crest of waves. These are faster turnaround, ample engagement models, reduced time-to-market, flexibility, scalability, risk-sharing, and more concentration towards core processes.

Disadvantages of Outsourcing

  • Risk Of Data Security – In most cases, companies have to face a threat of data security. This holds especially true when they have to share any confidential information with the IT outsourcing company regarding the project or company itself.
  • Hidden Costs – No doubt, outsourced software development projects are generally cost-effective. However, sometimes there is a hidden cost that the company has to bear when signing a contract. Secondly, choosing outsourcing services across the boundaries is often cost-ineffective for the organization.
  • The difference in Distances and Time Zone – Another major con of outsourcing a crucial project is mismanagement of distance and time zone differences, especially when an outsourcing company is located in another country. Not only this brings a gap in communication, but it also emerges the chances of misunderstandings.
  • Cultural and Language Disparities – A business alliance is often ineffective when there are cultural and language barriers between two collaborators. Choosing an outsourcing company that is either located in a different state or country usually leads to this problem.
  • Troubles In Delegation – The biggest threat when working with an external specialist is a trust issue. As a consequence, there is always a problem in delegating the bigger responsibility that holds utter value for an organization. This is why it is said to be careful and patient when selecting outsourcing resources.