10 Key Benefits of Outsourcing Software Development

The competitive advantages of outsourcing range from massive project scalability to a more strategic and effective use of company resources and in-house tech talent. Outsourcing can help everyone from large enterprises to scrappy startups, and what follows are 10 of the most impressive benefits that outsourcing provides.

• Increased project scalability

  Project scalability is one of the most powerful benefits that come with augmenting an
  in-house team with an outsourced development team’s efforts.

  Once you know exactly what you need to accomplish with a given software
  development project, you can multiply the number of developers in short order by hiring
  outside help. Rather than expanding your in-house development team by hiring internal
  staff one by one, your outsourcing partner can provide a dedicated team for the length
  of the project.

  The increased production leads to faster releases and results in a
  faster time-to-market, and it’s usually more cost-effective than hiring more full-time
  staff. We’ll explore that concept in more detail below. All this amounts to a powerful
  competitive advantage.

  The best part is that once you’ve hit your goals and released the
  product, you can easily scale back down if it makes good business sense. Scaling up and
  down as markets and product cycles demand is an effective business practice, but it
  simply isn’t an option without a strategic IT outsourcing program.

• Cost efficiency

  Working with a high-quality outsourced team is almost always more cost-effective than
  hiring an in-house software development team. There are a number of reasons for this,
  including:

  • Reduced labor costs when working with many offshore developers
  • Eliminating payroll taxes and benefits costs, since outsourcing companies employ
    their own staff
  • No onboarding and hiring costs associated with new employees
  • Fewer managerial costs when working with full-service software development
    outsourcing companies that offer project management services

  All this amounts to significant cost savings when working with an
  outsourcing partner, but there’s one caveat. Outsourcing firms will only save you money
  if they know what they’re doing, follow best practices regarding cybersecurity, and
  strategically engage effective development methodologies like Agile.

  That’s why we don’t recommend going with the cheapest option, unless the
  cheapest development firm happens to come with solid recommendations and brings decades
  of experience to the table.

• One-stop shop

  Working with a full-service outsourcing firm gives you access to an app development team
  that handles every aspect of the design, development, and testing process. If you want a
  dedicated team to take care of large swaths of your development and/or digital
  transformation needs, a full-service firm can help.

  A full-service team can be your one-stop shop for:

  • Project management
  • Market research and business analysis
  • User Interface (UI) and User Experience (UX) design
  • Software product development
  • Quality Assurance (QA) testing

  This approach can be very helpful for both enterprises and startups.
  While enterprises typically have strong in-house teams to handle regular IT projects,
  they can expand their in-house staff’s capacity by handing entire components of their IT
  strategy over to an external team.

  Outsourcing benefits startups as well, often helping them to create
  their Minimum Viable Products (MVPs) from scratch, and helping them develop future
  iterations with features inspired by early adopter feedback. This allows the founders to
  save money and focus on their business strategy.

  Once a startup business is off the ground, they can look into hiring an
  internal team of developers, but that doesn’t need to be the top priority—and often it’s
  a distraction in those early days!

• Access to global talent

  When connecting with outsourced development teams to address your business needs, you
  open yourself to the possibility of sourcing designers and developers from a worldwide
  talent pool.

  Sure, you’re going to find plenty of developers in your own backyard if
  you’re located near a technology hub in the U.S. or Europe. However, when you consider
  the sheer volume of tech talent across the globe, it only makes sense that expanding
  your reach will expand your options.

  Not only are countries like India and China home to exceptional software
  engineers, but the low cost of living and labor amounts to highly competitive
  development costs. India alone has 5.8
  million software engineers, making the world’s
  most populous country an IT hotspot.

  One of the few potential downsides to working with talent across the
  globe is that language and cultural barriers may get in the way of clear communication,
  but that’s easily avoided with thorough vetting.

  If you can clearly communicate with a potential vendor’s team, and you
  see that their website is written in native-level English, communication isn’t likely to
  be an issue.

  The other potential challenge could be time zone differences, but some
  companies will adapt to your time zone—we’ll do that at Net Solutions if it’s something
  you need. Of course, you may choose to work with the time zone difference so production
  carries on around the clock. It’s all up to you!

• Focusing on core business needs

  Technology plays a key role in nearly every business today, but in many cases, its
  primary role is to support a larger business strategy using the latest technologies and
  powerful software solutions.

  Non-technical leaders don’t want to get bogged down in managing the
  development process, and working with an outsourcing partner helps them focus on what
  they do best—things like big-picture strategy, product positioning, getting investors
  onboard, and other key tasks.

  When it comes to technical leaders, it’s perhaps even more important to
  have a quality, full-service development team in place that can successfully manage the
  day-to-day tasks related to software development.

  We say that because technical leaders can sometimes get lost in the
  development weeds, which can be time-consuming and pull them away from tasks that
  require their leadership.

• Reduced HR burden

  Human Resources can cost
  up to 25% of a company’s budget. That may seem expensive, but
  when you consider all the costs associated with recruiting, hiring, onboarding,
  training, managing conflicts, firing, and other HR-related duties, it’s easy to see why
  HR is so costly.

  One way to minimize HR costs is through outsourcing services. An
  outsourced service provider handles all their own HR-related tasks because they hire and
  manage their own employees. That means you can keep your in-house staff lean and
  successfully manage HR costs.

• Access to technology

  Technology stacks are constantly evolving, and assembling the perfect technology stack
  for your business is a challenging process.

  When working with an outsourced team that offers cutting-edge software
  development services, they’re likely to be plugged into the latest and greatest
  technology, and they probably understand all the most beneficial software development
  outsourcing trends. After all, they’re specialists in the field and their livelihoods
  depend on it.

  When hiring an outside vendor, ask them about their technology stack and
  what they believe might be an ideal tech stack for you (at least preliminarily, based on
  how you assess your current needs).

• Expert domain knowledge

  Specialists really do save you time and money, even if you ignore the savings associated
  with lower labor costs. That’s because a professional who specializes in a given task
  will do it more efficiently, and they will minimize the need for rework.

  When building an in-house team, especially in a startup or even a mid-size company, it
  makes sense to fill your IT department with team members who can perform a number of
  different tasks. After all, business demands change daily, and you need professionals
  who can adapt.

  When hiring a good-sized, talented, full-service outsourcing partner, rest assured they
  can assign specialists to each element of your project. That makes for an efficient,
  knowledgeable team that ultimately saves time, saves money, and produces quality
  software products.

• Improved time-to-market

  Time is of the essence with new software products and software releases. The first-mover
  advantage is real because customers don’t like to change vendors unless they see a
  powerful advantage in switches. If you can produce a quality product and beat your
  competitors to the market with new features, it will be that much harder for them to
  poach your customers.

  One of the reasons the software outsourcing market is so strong is that
  working with an outside partner can significantly reduce your time-to-market.

  This circles back to the first benefit we explored—increased project
  scalability. If you can scale a project quickly, you can speed up the development
  process and hopefully beat your competitors to the punch.

• Maximized resource utilization

  A key benefit of outsourcing comes down to using your tech talent for what they do best,
  which is why many companies use a staff augmentation model. If you’ve got talented
  senior developers on staff, you don’t want to squander their talents on simple tasks
  that a junior developer could handle.

  Companies that don’t work with outsourcing partners often struggle with
  resource optimization since their top staff gets pulled away from more challenging and
  important tasks—those that meet their pay grade and warrant the salaries you’re paying
  them.

  This isn’t just bad business from a cost-benefit standpoint—it’s likely
  to impact employee retention because top talent will get bored doing mundane tasks. Like
  all skilled professionals, they like to be challenged.

  Hiring an outsourcing partner connects you to a team of professionals
  who can free up your most prized human resources to do what they do best—solving complex
  problems and adding massive value at every step.