5 Top Benefits of Outsourcing Software Development

Are you wondering why companies outsource software development?

Most companies struggle with managing costs, finding skilled developers, and balancing core business activities. That’s where software development outsourcing steps in.

As a leading software development company, we know the ins and outs of outsourcing. Read this blog post on the benefits of outsourcing software development to get answers to your questions.

5 Core Benefits Why Companies Outsource Software Development

Learn about the following key benefits of software development outsourcing. Let’s first start with cost savings.

  1. Cost Savings in Outsourcing Software Development

    Due to major cost savings, outsourcing software development has become a top choice today for businesses to lead in the market. Compared to hiring an in-house software development team or individual developers, outsourcing is less costly.

    There are several areas where cost savings can be achieved with outsourcing. Learn about each in detail. When you outsource software development, you get the following cost benefits.

    Lower Labor Costs

    When you hire an in-house software developer to develop software, you need to offer a salary ranging from $90,000 to $120,000 annually. In addition, you also need to offer benefits like health insurance, vacations, infrastructure, and additional resources.

    All of these factors contribute to the overall cost of your software development. However, you can bring in more software developers and build a skilled team if you outsource within the same amount.

    Reduced Infrastructure Expenses

    When outsourcing, companies don’t have to invest in infrastructure, software, and other resources. These are managed by the outsourcing provider. No need to allocate funds for workspaces, utilities, and equipment. This way, as a software company, you get savings of thousands of dollars which could be utilized in your core project and business development.

    Training and Recruitment Costs

    On average, recruitment can cost businesses around 20% of the candidate’s annual salary. In addition, training new hires might add more to the expenses, as you need to provide them with a mentor, and invest time, and more resources to get your work done. However, outsourcing eliminates all of these costs. All the training and skill enhancement lies with a software development company with whom you contract.

    Operational Cost Savings

    When you build an in-house team, you need to invest in operational costs, including utilities, rent, and administrative expenses, which can make up to 5% to 15% of a company’s total expenses. By outsourcing, all your operations costs are often considered in a contract.

    Avoidance of Software and Licensing Costs

    While developing software solutions, you need to provide the software tools and licenses that are important in development. And, these tools and licenses add to your project development when you are working with in-house software development. On the other hand, top outsourcing software development services providers have access to tools due to their work requirements.

    With outsourcing software development, you save all these costs even getting the best software experts onboard for your project development. In addition, you don’t need to compromise with the quality of work due to cheaper hourly rates. This way, outsourcing becomes a strategic move for businesses aiming for growth without extreme expenditure.

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  3. Flexibility in Outsourcing Software Development

    Delegate your technical work to software development outsourcing companies. Imagine getting a dedicated team that solely focuses on the technical work of your business. It’s a bit like ordering a meal from your favourite restaurant instead of cooking at home.

    As outsourcing software agencies specialize in all the required technical facilities, they have all the necessary resources and development teams to get your work done. This way, you get the utmost flexible approach. Let’s understand what amount of flexibility you get.

    Adjusting to Changing Requirements

    In the tech industry, software projects do not remain the same size. When you are launching your product, you might just need an MVP version of the software. As your business grows, you need to add more features and enhance your software application. Due to frequent changes in requirements, outsourcing helps you change the size of your team.

    Perfect for All Project Lengths

    Not all software projects take the same time. As the software project size differs, so does the time for development. At this stage, outsourcing fits both of the requirements. You can hire junior or senior developers for a month or year-long software development project. This way, you get flexibility in managing resources and costs as per your requirements.

    Balancing Business Risk and Resource Allocation

    Imagine you start a new business and we all know starting a new business is risky. At this stage, when you hire or bring supplies more than required, they might go to waste. However, if you bring fewer resources, you might fail to meet your deadlines. In business, hiring too many or too few people is a risk. This is where outsourcing reduces this risk. You can scale your team based on real-time needs. If you want to learn in detail about the differences between outsourcing and in-house, check our dedicated blog on in-house vs outsourced software development.

    Continuous Work Cycle

    Outsourcing often involves teams from different parts of the world. This is great because while one team sleeps another can work when you hire highly quality talent accordingly. Thus, when you want a faster launch of new functionalities of your software, you have teams who can work around the clocks.

  4. Access to Experts for Your Project Development

    When you choose to outsource software development, you are not just hiring a team. Instead, you are accessing a global pool of talent who are well-versed in different technologies. Whether you want to develop a mobile app, web, or software application, you need experts who are experienced in the same domain. But, what if you get experienced and skilled enough who surplus the basic requirements?

    You may hire local skilled developers, but are your developers experts in the specific technology or domain you need? Outsourcing excludes geographical limitations and helps you get access to top-tier professional software developers.

    For example, when you need a React Native developer for your project, rather than searching for suitable and skilled candidates, outsourcing firms have experts in their firms. This way, you find your specialist within a few hours for software development projects.

    In addition, as the tech industry evolves, so do the software developers. By tapping into global talent, you ensure that your project benefits from the latest methodologies and technologies.
    According to a Deloitte survey, 49% of companies choose to outsource as it provides access to experts who are well-versed in multiple technologies. This speaks volumes about the expertise available outside one’s immediate surroundings.

    When you want excellence in software, mobile, or web development within budget, outsourcing is a strategic move. By software outsourcing, you ensure your projects are in the bands of the best, no matter where your team works in the world.

  5. Focus on Your Core Business Activities

    When you start with a clear vision, you have limited responsibilities and work to complete. But as your business grows, you find yourself mired in tasks far from your core objective. This is where software outsourcing helps to achieve your targets.

    Outsourcing is not just about delegating tasks. The game of outsourcing is about assigning specialists with activities where they truly excel to provide expected results. By doing so, you reclaim your focus and position yourself for greater success.

    Here’s how outsourcing strengthens your focus on core business operations:

    • Save time: Instead of investing your time in tech issues, spend your hours strategizing and innovating for your brand.
    • Use resources Wisely: By outsourcing, you ensure your team focuses on what they’re truly passionate about and skilled in.
    • Stay agile: Without the weight of peripheral tasks, you can pivot and adapt to market changes faster than your competitors.
    • Easy scaling: Outsourcing development allows you to grow your operations seamlessly, without overwhelming in-house teams.
    • Gain better results: Consider this – 78% of global businesses are thrilled with their outsourcing partnerships. It’s not just about saving money; it’s about optimizing operations and gearing up for growth.
  6. Scale the Development Teams Size Based on Project Needs

    Outsourcing provides you with a unique advantage: scalability. Imagine you’re launching software. Initially, you might need a small team for development. But as the project grows, so does the need for diverse skills. Instead of undergoing the lengthy process of hiring and training new personnel, outsourcing allows you to swiftly adjust the team size. You can expand or reduce your outsourced team in tune with project demands.

    Here’s why this matters to you:

    • Save money: Hiring full-time employees involves significant costs – from salaries to benefits. By scaling your outsourced team, you only pay for the exact expertise and hours you need. This approach translates to considerable savings.
    • Adaptive resource management: Software development is rarely linear. Some phases demand intensive manpower, while others require a lean team. Outsourcing grants you this flexibility, ensuring you’re never overstaffed or understaffed.
    • Swift project execution: Time is often the core element in software development. With the ability to quickly onboard experts from your outsourcing partner, you can expedite project timelines, ensuring timely deliveries.

    For instance, a startup aiming to launch a software product might initially need a team of five developers, designers, testers, and a project manager. As the software gains traction and you get user feedback, you might need ten more developers, designers, and two project managers for new features and improvements. Instead of scrambling to hire internally, outsourcing offers immediate access to these additional resources.

These are the core advantages of outsourcing software development. If you have more questions, check the following section.

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FAQ About Benefits of Outsourcing Software Development

  1. How does outsourcing affect business risks?

  2. Outsourcing helps you to balance business risks, especially resource allocation. By scaling teams based on real-time needs, businesses can avoid the loss with over or under-staffing.

  3. Can outsourcing lead to faster project execution?

  4. Yes. Outsourcing ensures continuous work cycles. As one team rests, another can continue, resulting in faster project timelines if you have to hire teams accordingly.

  5. Is communication a challenge when outsourcing to different time zones?

  6. While time differences can be a concern, many software development outsourcing providers adapt to the client’s preferred working hours and ensure smooth communication and collaboration.

  7. How do companies ensure data security when outsourcing?

  8. Reputable outsourcing partners adhere to global data security standards and use encrypted channels, NDAs, and secure platforms to protect client data. As a leading software development company, we sign an NDA for developing software solutions as per client’s requirements.

Choose Software Development Outsourcing for Your Business

As said, outsourcing software development goes beyond just saving money. Businesses get flexibility, access to global talent, and the ability to focus on core objectives. With the agility to scale teams as needed, companies can adapt to market changes efficiently. These benefits make outsourcing a strategic choice for any forward-thinking business.

If you are looking to outsource software development, connect with us. As a reputable software development company in Canada, we have developed over 300 custom web and software solutions. Let’s connect to discuss this further.

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Rakesh Patel

Written by

Rakesh Patel is the Founder and CEO of Space-O Technologies (Canada). He has 28 years of IT experience in business strategies, operations & information technology. He has expertise in various aspects of business like project planning, sales, and marketing, and has successfully defined flawless business models for the clients. A techie by mind and a writer at heart, he has authored two books – Enterprise Mobility: Strategy & Solutions and A Guide To Open311

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