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Businesses are always searching for cost-efficient and convenient approaches to software development, and the software outsourcing market is expanding incredibly to meet this demand. With technologies evolving quickly, what is innovative today becomes outdated tomorrow. Companies that fail to keep up with recent advances quickly get left behind, losing out in the profit race.
To stay ahead of the competition, businesses shift their strategies towards outsourcing, achieving the flexibility an in-house development team would never provide. Outsourcing provides modern businesses with a cost-efficient and effective way to develop software while keeping a large staff of in-house employees to a minimum.
The whole idea of letting someone else do your job raises questions. Yet, outsourcing allows businesses to delegate some of the software-related tasks to a third party, which can provide A-grade services in supporting areas.
So, what is software outsourcing? In simple terms, it's a form of arrangement where a company hires an independent team of programmers to work on a software-related project instead of performing all tasks in-house. Typically, the outsourcing vendor is better equipped and experienced to handle the project than the client’s staff, ensuring high development speed and a shorter time to market.
Today, technologies dictate the rules, and tech-savvy companies win customers, earn a reputation, and go international in a couple of years. Businesses that fail to adopt innovative strategies such as outsourcing risk being left behind in today's fast-paced and ever-changing market.
Types of Software Outsourcing
Companies have three different options to choose from when they decide to outsource software development services: local, nearshore, and offshore. Each of the types shows great efficiency, depending on the task you delegate.
Local
Local outsourcing refers to outsourcing software-related tasks to a contractor located within the same geographical area as the client company. The proximity of the outsourcing vendor is the key feature of local outsourcing; the hired team is “around the corner,” which means you won’t have to deal with problems like the language barrier or different time zones. This allows you and the contractor to work in sync, resulting in better productivity, as you can work out challenges together. As a bonus, you can arrange occasional meet-ups with the vendor without traveling half the planet.
Nearshore
Nearshore outsourcing is the middle ground between local and offshore outsourcing, with lower costs compared to local vendors and more affordable rates compared to offshore outsourcing vendors. The proximity of the nearshore contractor means fewer headaches when organizing the development process. You’re guaranteed to have at least four hours of shared working time. Communication and traveling also shouldn’t be a problem.
Offshore
Offshore outsourcing is popular among large companies worldwide, allowing for cost-efficiency and a wider range of services. Offshore outsourcing vendors can deliver on all sorts of tasks and provide any type of specialist you need for the project. However, offshore operations are harder to control, and language and cultural barriers may arise. Each of the outsourcing types comes with certain operational issues that need to be considered when choosing the appropriate type of outsourcing.
In conclusion, to choose the appropriate type of outsourcing, it is essential to first accurately determine your needs and expectations. The right research and consideration of the advantages and disadvantages of each type can provide businesses with a cost-efficient way to develop software while staying ahead of the competition.
Why Outsource Software Development?
Globalization and IT innovations offer companies the chance to save resources and optimize business processes. But why outsource software-related projects instead of forming an ultimate development team? Delegating some functions to third-party businesses cuts costs and shifts your focus toward developing the main areas of activity. Outsourcing attracts external resources -- knowledge, experience, and assets -- with minimal administrative obligations and risks.
- Outsourcing saves time and lets you focus on development. For small and medium-sized businesses, outsourcing helps focus on administrative and operational tasks, taking some load off of staff and using resources more efficiently.
- New connections and business opportunities. Depending on the outsourcing type, you may get access to a foreign market with its useful contacts, talent pool, technologies, potential revenues, and growth prospects.
- Cohesive and motivated team. Software development is a business for outsourcing companies, not a job. To stay ahead of the competition, they keep up with high standards of quality. It's difficult to gain the same level of dedication from in-house employees.
- Cost-efficiency. Outsourcing certain functions reduces operating costs and increases profits. Opting for an independent IT software outsourcing company translates fixed costs into variable ones, making you more flexible and competitive.
- Better management. Large-scale projects require intense problem-solving. With so much pressure, your team will eventually make mistakes. Hiring a contractor means fewer tasks for your company to perform, reducing pressure on your management team to give you space for developing core business areas.
- Compact business. Large staff brings down efficiency. With a separate team working on your project remotely, handling your own crew won't be much of a hassle. Outsourcing might also be your go-to option if you plan to reorganize your business or optimize operating costs.
- Faster development. Third-party IT firms easily keep up with tight deadlines thanks to years of experience and experienced team members, delivering results in the shortest terms.
The scale of outsourcing depends on the company's needs and financial capabilities. However, the major reasons why companies outsource a software development agency are to boost the flexibility of their business model and bring down operating costs. Considering the growing popularity of outsourcing, it does a pretty good job of delivering on both promises.
How to Outsource Software Development
So you've decided it's time to outsource. The next question is who you can trust with this important task, considering the risks. Make sure you approach the choice of an outsourcing vendor carefully. The process shouldn't be too hard if you follow these steps.
Define your project requirements and goals
Before choosing a contractor, decide on the functions you're going to outsource. A clear understanding of the tasks required results, and deadlines will make collaboration more efficient, reducing risks in key processes and boosting your competitiveness in the long run.
Research for outsourcing vendors
There are thousands of IT companies out there. How to choose the right one? Start by googling, just like you always do when looking for other products or services. But be prepared to pile through a hundred pages. As an alternative, you can also refer to websites like Clutch or Top Tech Biz. They provide all the info you need on the best IT companies on the market, such as costs and customer reviews. There are also links to company websites where you'll find plenty of information to help you choose.
Research the provider's background
While putting together a list of potential outsourcing partners that meet your requirements, start communicating with some of them. Take your time to talk with managers, discuss the terms of possible cooperation, and get more information for making an informed decision:
- Check their accounts on Dribbble, GitHub, and Facebook.
- Ask for a video call and get them to arrange a tour around the office for you.
- Chat with key people who will be involved in your project.
- If you have technical expertise, ask them to show you snippets of their code.
Evaluate capabilities and expertise
The next step is to figure out if the vendors you choose are up for the task. Here's the fastest way to do this:
- Check their portfolio. Explore their projects. Is there something from your industry? If there are websites, visit a few and see if they look great. If there are mobile apps, it would be a good idea to test them, and see what rating they have. And if you have an opportunity, feel free to chat with previous clients, especially if they're from your niche.
- Check their technologies. A decent software development outsourcing company keeps its tech up-to-date, constantly expands its field of expertise, and invests heavily in courses for employees.
- Get in touch with the team. Find out what certificates they have. For IT outsourcing, the company must provide a full range of services (this includes design, coding, testing, and all types of tasks).
- A blog may also provide a lot of info about all the aspects of a company, from workflows to English skills.
An outsourcing company is also positively characterized by its openness to dialogue and cooperation with colleagues.
Make a shortlist of candidates
It'll take a lot more than a day to find the right team for the job. Be sure to consider the following factors when sorting through vendors:
- Is the vendor's pricing policy adequate?
- Has the vendor shown steady growth over the years of work?
- What's the situation with their location, tax regulations, and time zone?
Discuss the project with the selected candidates
It's great when the team has expertise in your industry. But the ability to ask and listen is just as valuable. So be sure to start cooperation with a discussion of a business idea and carefully work out all proposals and preferences.
Test the candidate
A small test task will help you decide who'll be your contractor. However, keep in mind that reputable outsourcing developers never do test tasks for free.
Discuss the specifics of the contract
The legal aspects of business require special attention. There may be various requirements, depending on the project specifics, but the most common one is data security. Usually, contracts are negotiable. This is the last stage before getting your project outsourced.
How to Save Time on Searching for Software Outsourcing
Are you looking for ways to optimize your business processes and cut costs? Outsourcing your software development needs may be the solution you need. At Celadon, we provide top-notch software development services that cater to your unique business needs. Our team of skilled software developers has years of experience in delivering quality software solutions that meet and exceed industry standards.
Our outsourcing services come with numerous benefits, including time and cost savings, access to a pool of talented developers, new business opportunities, and better management of large-scale projects. We also prioritize quality and timely delivery, ensuring that your project is completed according to your specifications and within the agreed timeframe.
So, if you're ready to take your business to the next level, trust our team at Celadon for your software development needs.