The Pros and Cons of Outsourcing Your Software Development

Introduction

We live in the era of automation and artificial intelligence, which makes informational technologies a critical factor for successful business development.

However, small and medium-sized businesses tend to overlook its importance and go with some quick ready-made solutions that fail to satisfy them and their clients. When the stage of DIY hits rock bottom, some try putting up a tech squat on their own, which is definitely not the best decision for a company that does not specialize in technologies. All the hassle and money spent on the developing and maintaining of a separate IT division will not bring the desired result, as it requires resources, time and training to get a dream tech team.

By the time you finish, the marketplace will be overcrowded with something you have thought of a couple of years ago.

Well, by now some of you may be devastated. Neither this nor that suits you. Fortunately, there is always a hero coming from the shadow – Outsourcing.

It has a lot to offer, but there are also weak spots that should be considered. In this article we are going to give you an outline of everything good and bad about outsourcing your IT needs, leaving the decision making to you.

Why outsource? Pros of outsourcing software development.

1. Control over costs and predictable billing.

The one and only most significant reason for going with outsourcing is, of course, cost efficiency. Enterprise will obviously benefit from cutting down capital and operational expenses.

There is no need to hire and support an on-site team of tech specialists and spend money on the payroll taxes, personnel training, bonuses and social protection package. All of that can eat a hole in corporate’s budget.

Moreover, you will not have to purchase expensive necessary hardware, software tools, and services for the team to work with. All of it will be taken care of by the outsourcing company you hire.

Finally, outsourcing gives the opportunity to plan expenses monthly or even annually. As a rule, service providers sum up the total cost of the project and split it into monthly bills, so there would be no surprises.

2. Attention to core competencies.

There is no way one company can manage to cover all aspects of the product supply chain successfully. Something is going to fall back, while another part will prosper.

For instance, take a look at the huge commercial enterprise that deals with the production of beverages. It deals with regulating manufacturing and meeting world standards of quality, continuous researched for improving chemical formula and support of the personnel. Would it be okay to include transportation and delivery of the finished product, or maybe it would be better to hire a specialized company to do the job?

Same can be said about outsourcing the development of new technologies. Entrusting a certain task to experts and focusing on one’s core competencies will do business more good than harm.

3. Access to relevant set of skills and experience.

Hiring an external vendor for the implementation of the product gives access to the team of talented techies that know what they are doing and how to achieve the desired result. Outsourcing companies pay attention to the level of employee’s competency. As a rule, each staff member is properly trained and certified in the technologies they offer.

Going with outsourcing is getting a team of experts that are going to guide the client through the process of development and consult them in making right technological decisions for their business.

In short, apart from working hours, you will be paying for accessing the knowledge of how to apply the latest technologies to your benefit.

4. Flexibility.

It is quite costly to take a wrong turn in the development of new technology. An experienced outsourcing service provider will become a guide in making correct technological decisions that will benefit the business.

In addition, if the project is going to suddenly change a different course or require additional functionality, they have everything to implement it without rebuilding the project from scratch.

Moreover, all charges stop once the project is finished and launched. Unless you decide to continue your partnership for further product support and development, there will be no additional financing included.

5. Quality and reliability.

Vendors carry full responsibility for the quality and performance of products they develop. They prepare an agreement that regulates deadlines, payments, and penalties for both parties, covers intellectual property rights and other additional aspects of partner cooperation. This way both parties of the deal will be fully protected.

Why not outsource? Cons of outsourcing software development.

Delegating some of your business processes or tasks to an external service provider sounds like a good idea considering the perspectives of finding a super understandable team with low rates, amazing quality, and tech expertise. However, we have to shed light on some shortcomings of the whole outsourcing process and how it can impact your business in a bad way.

1. Communication restrictions.

When looking for an outsourcing developer company, it is important to think about time zones and linguistic differences. These two things can become one of the biggest drawbacks on your way to project realization.

Huge difference in time-zones can ruin the whole communication process. This is the reason calls and meetings get postponed or do not happen at all. Moreover, if the company you are working with fails to understand what you and your business want, is it even worth trying? Remember that comfortable working process begins with such small things.

A $5 or $10 difference in hourly rates seems attractive, but in the end, it is going to cost time and nerves that are irrecoverable.

2. Different business philosophy.

All companies have an established working pace that perfectly fits that particular business. However, it can feel unusual to an outsider. The tech team is accustomed to a certain management system and a set of progress tracking tools, which may weird out the other party. As a client, facing a radically different approach to management may feel like you are losing control over the situation and no longer know where it is heading.

Of course, this can be easily avoided by discussing the preferred structure of the business process at the very beginning. This way you can rest assured that cooperation between your firm and the outsourcing vendor will match your expectations.

3. Risk of data theft.

All in all, outsourcing always comes with risks. You share ideas, innovations, and data with third party vendors that can “borrow” or use it however they like. Even if the remote team you work with has signed the nondisclosure agreement, you will not be able to have absolute control over an outsourced project.

4. Hidden costs.

While companies seek to outsource to save money and receive a final product of exceptional quality, there is always a risk of getting a huge bill compiled of hidden fees. Especially if you have decided to outsource out of the country.

Some companies hoax the client with double-billing or give out false overestimation. Hidden costs may also include phone calls, meetings, additional consultations and even the travel expenses. In the end it all piles up, but when you are in the middle of work, there is no backing out.