All the Good Reasons Why Outsource Software Development

Trung Tran

Trung Tran | 07/05/2024

All the Good Reasons Why Outsource Software Development

Software outsourcing is nothing new in the IT sector. On the contrary, it has long become a prevalent business practice or model when it comes to solving the conundrum of balancing between budget constraints, tech talent shortages, and project deadlines.

In recent years, the world of tech business has seen a massive surge in companies and organizations outsourcing a part of their business processes or entrusting their entire software development projects to a third party with sufficient resources and expertise.

The wave of outsourcing is due to the advantages this business strategy offers. Thus, software or IT outsourcing (ITO) has become an attractive option - a no-better way to tap into the world of great tech talent, reduce operational costs, increase efficiency, and many more benefits - for a wide range of organizations, including small companies and even global corporations.

According to Statista, the revenue of the segment software development outsourcing is projected to increase and soon reach $430 billion by 2023, and it is expected to hit $586.3 billion by 2027 by 2027 with an annual growth rate of 8.07% (CAGR 2023 – 2027).

For those who are reluctant to jump on the bandwagon or consider it as an optional option, this article will be a helpful guide in understanding the reasons why companies outsource software development and why you should do so, too. Perhaps these reasons can blow your mind.

Key Takeaways:

Software outsourcing has grown into a prevalent business strategy trusted by more and more businesses, including small, medium, and large companies or enterprises. The substantial benefits are indeed the primary reasons why outsource software development:

  • Cost Reduction: Outsourcing potentially facilitates 50% to 90% of development cost savings compared to in-house development methods.
  • Global Talent: Companies that outsource can tap into an extensive pool of world-class tech talent at a lower cost.
  • Flexibility and Scalability: It offers much more flexible staffing options and pricing models.
  • Core Competencies: By outsourcing, business owners can dedicate full attention and resources to primary business activities while leaving the non-core ones to external experts.
  • Quick Market Entry: Working with an outsourcing partner can speed up the turn-around time for products and services.
  • Technological Advancement: An IT partner helps businesses stay abreast of emerging technologies and provides them with a competitive edge through the adoption of the latest innovations in the tech world.
  • Security and Quality Assurance: Outsourcing firms have robust security measures and comprehensive quality assurance processes in place to ensure the best quality and security for the deployed solutions.
  • Commitment to Excellence: Firms specializing in software outsourcing help you mitigate risks, minimize the chances of project failure, and ultimately support you in achieving your long-term business goals.

The Key Benefits of Outsourcing Software Development

Oftentimes, software development companies have their own reasons for outsourcing their work. While many choose outsourcing services as their last resort, some opt for outsourced software development partnerships as their innovative solutions to accelerate their business growth in the long run. Despite their reasons, their targets are nearly the same: To tap into a wide range of benefits they otherwise would not have access to if they conduct their projects in house.

Reduce the Overall Cost of Software Development Project

Reduce the Overall Cost of Software Development Project

Many companies nowadays are driven to outsource software development tasks due to the benefits of cost reduction.

In some cases, outsourcing software development can provide a 50% - 80% deduction in overall costs compared to traditional methods. This is the result of cost-cutting in multiple areas of your software project. You have to agree that developing software solutions from A to Z in house can be prohibitive as you have to bear costly upfront investments in setting up in-house development teams, ranging from salaries, equipment, and office infrastructure to other expenditures.

Meanwhile, by partnering with a service provider for a dedicated software development team, you can save a significant amount of operational costs and leave some of the financial burdens to the outsourcing companies, allowing you to facilitate cost efficiency.

In addition, hiring onshore software developers or an experienced team is expensive and competitive at the same time, which is a huge challenge for small to medium-sized businesses or even large, well-established companies. However, if you contract a nearshore or offshore outsourced team, you can benefit from the economic labor costs as the outsourced talent in different destinations charges lesser hourly rates for their services.

Vietnam, for example, is one of the most cost-effective countries for software development outsourcing services, with developers charging an average rate of around $20 and $50 per hour. When outsourcing to Vietnam, businesses can cut up to 90% of development costs compared to the U.S.

Gain Access to a Sizeable Pool of World-class Talent

Outsourcing enables any software development company (of any size) to access highly skilled professionals not only outside of your company wall but also across geographic borders.

Through software development outsourcing companies, you can tap into the local talent pool from different countries and gain access to experienced, world-class developers who specialize in a wide range of skills, technologies, and capabilities that can be hard to find in your in-house team or even unavailable in your local area. With reinforcement from an outsourcing partner, your in-house development team can be more efficient and productive as they are supported with adequate resources.

Bring in Expert Domain Knowledge & Ideas

You can take your software development project to the next level with expert knowledge and creative ideas from a reliable outsourcing company. A dedicated team of highly skilled developers can provide you with fresh perspectives, new methods, innovative approaches, and insights into different technologies and development tools that are not familiar or within reach of your in-house team. In this way, you can have experts providing on-the-job training for your internal staff while enriching your in-house intellectual capital.

More often than not, any software outsourcing company has vast experience in working on various types of software projects, so they are well-equipped with the in-depth knowledge and expertise to handle your specific business operations. This is highly beneficial, as you don’t have to invest time and money in training your team on these technologies or risk dealing with rookie mistakes and delays. However, watch out for company culture fit when choosing the right outsourcing partner to ensure both inbound and outbound teams can work harmoniously.

Flexible Staffing Option & Team Structure

Flexible Staffing Option & Team Structure

A product development cycle can last longer than expected and consume more resources, or vice versa. And there are variables that could affect the work process, such as market trends, customer expectations, and project scope. Moreover, when working on complex software engineering projects with a long list of requirements, you need to have clear control over staffing decisions.

With a software outsourcing team, business owners can adjust their team size and model on demand. You can scale up or down during different stages of the project depending on the current situation. This is because you can hire developers on a non-permanent basis.

You can either choose to contract a dedicated development team to conduct long-term projects or augment staff temporarily. The flexibility enables you to cut spending on idle staff while saving your in-house team from being overloaded and burned out due to the shortage of human resources.

Focus on Core Competencies & Business Priorities

One of the most significant advantages when delegating parts or the entire project to an outsourcing development partner is that you can shift your focus to the core business activities while letting the experts take over non-core expertise and tasks. For example, you will not need to be involved in hiring specialists yourself or invest in staff training.

This allows you to concentrate on the growth of your business and other priorities while outsourcing teams handle software development challenges. You can then use your in-house resources more effectively and efficiently on tasks that are essential for product success and company performance.

Shorten Time-to-market

Obviously, it takes much longer to set up a full-fledged development team all alone. Instead, you can cut to the chase with an outsourced team of skilled and experienced developers and get your project off the ground without delays. You can also leverage their expertise, best practices, and industry knowledge to accelerate the development process.

Since you do not need to muddle through the issue of manpower and resource availability, you can get the work done on a tight timeline and deliver solutions at a much shorter time-to-market. Quick market entry buys you more opportunities to grow the business, reduce product risks, and strengthen the position of your brand as well as your product in the marketplace. In the meantime, you can boost the ROI of your business operations.

In addition, when working with offshore developers, you can also take advantage of the time zone difference to have your project running 24/7 and accelerate the completion of your project.

Stay Up-to-date with the Emerging Technologies

Digital transformation is taking our business realm by storm, leaving today’s organizations and companies no choice but to embrace advanced technologies in order to survive and thrive. The latest technologies, development frameworks, and project management tools are continuously evolving, which makes it difficult for most companies and their in-house teams to keep up with them. Especially when it comes to the popularization of artificial intelligence and machine learning and the tools empowered by this duo, the demand for knowledge and expertise in future-proof technologies surges incessantly.

Through an outsourcing company, you can leverage the domain knowledge and technical know-how of its teams. You can access dedicated resources with expertise in various development technologies, such as cloud computing, mobile app engineering, DevOps automation, artificial intelligence, blockchain technology, and so forth. Additionally, these teams come equipped with tools and processes required to manage the software engineering process smoothly from start to finish. This ensures that you can stay relevant in the global market and keep up with the ever-changing demands of your customers.

Enhanced Security & Quality Assurance

Enhanced Security & Quality Assurance

In software development, security and quality assurance are the top priorities, and it may become a bigger concern when it comes to outsourcing.

Outsourcing companies come with their own set of stringent processes and security measures to ensure that your code is protected against cyber threats. They are also equipped with sophisticated testing procedures to guarantee product reliability in terms of performance, scalability, compatibility, and other aspects. Additionally, they have comprehensive quality assurance processes in place to deliver bug-free software applications that meet your quality standards. With their expertise, attention to detail, and commitment to delivering the best-in-class solutions, you can trust them to develop software that meets and exceeds your expectations.

You can rely on their expertise and experience to reduce the risk of potential vulnerabilities, data breaches, and other security issues. Consequently, you can rest assured that your project is safe in the hands of professionals who are devoted to protecting your app against any malicious activities or cyber threats.

Mitigate Risks & Assure Success

A self-developed project may fail for one or multiple causes, and yours may stand in front of various challenges and risks. Even if you are an elder in the software engineering domain and have been dealing with many homegrown software systems before, the rate of risks and failure will never be zero. Get ready to face common problems, such as conflicting requirements, unrealistic timelines, communication gaps, budget overruns, ambiguous requirements, delays, etc. If not proceed with caution, only a minor mistake could turn out to be a major setback for your project.

This is the right time to find an expert hand for a collab. Instead of working with uncertainties, you can rely on an experienced and credible outsourcing company that can provide professional advice, guidance, or tips and lead you through all the potential roadblocks along the SDLC toward success. These service vendors have the resources to handle large and complex projects like yours, as well as the flexibility to adapt to the changing project’s requirements and technical needs. Even in the worst scenarios, they will have contingency plans ready to keep the project on track and deliver it with optimal efficiency.

Once again, keep in mind that the risks will never be zero; however, you stand a better chance of mitigating them and taking firm steps if you do have an outsourcing partner to rely on for support.

Software Development Outsourcing with Orient Software

Orient Software is a reputable company specializing in software development outsourcing, and we have almost two decades of providing top-notch services for all-sized businesses across the globe.

Why should you partner with us? Being in the industry for almost two decades, we understand the unique needs of each customer, so our teams strive to create bespoke software that meets their exact requirements. Our experienced developers are experts in various programming languages and technologies, such as Java, JavaScript, PHP, Python, iOS/Android app development, DevOps automation, and more. We take pride in our ability to deliver high-quality products on time so that you can stay ahead of the competition.

At Orient Software, we understand that trust is essential when it comes to outsourcing your software development projects. That is why we maintain total transparency throughout the entire process – from requirements gathering and project planning to development and deployment. Our teams are always available to answer any questions or provide updates regarding the progress of your project.

With our commitment to quality assurance, security compliance, customer satisfaction, and agile methodology, you can trust us to provide you with high-quality products that help your business gain a competitive edge in the market. Contact us today to learn more about what we offer.

Content Map

Related articles