Software Development Outsourcing

Outsourcing Software Development Initiatives Can Offer Benefits – When Managed Correctly

With technological advancements allowing more and more contractors and agencies to offer services worldwide, outsourcing is a viable option used by many companies today. Originally only seen as a means to reduce operational costs, it is now used to gain a competitive advantage in the marketplace.

Non-core processes are often outsourced, which offer no competitive advantage but help a company run successfully. Computer programmers and software engineers were listed as the most outsourced careers in 2015, areas that are increasingly in demand, but it is not necessarily required in-house. Outsourcing is slowly changing how many companies run their businesses.

Here are some benefits of outsourcing vs. using in-house resources for software development initiatives:

Save Money On Staff Augmentation

The cost of hiring, training and housing staff adds up. Whether you require a team of five or 1,000, it is much cheaper to outsource an entire project than to hire each contractor individually and place them on internal teams.

Less Internal Management Requirements

Hiring new staff also requires the hiring of new managers. When a project is outsourced, built-in management can effectively guide a project. This reduces the likelihood of running into common issues, such as over budgeting or missed deadlines when trying to manage everything internally without appropriate expertise.

Lower Overhead

In one study, 30% of IT companies stated that outsourcing is effective for cost reduction. Another 55% of companies surveyed suggested it is somewhat effective for cost reduction. Lower overhead is one of the main reasons why companies outsource today.

Consistency, Consistency, Consistency

When you hire staff in-house, you may run the risk of higher employee turnover rates. This provides a challenge for software development initiatives, where consistency is critical to complete a project successfully. Outsourcing allows you to return to the same company, time and time again, maintaining consistency in domain expertise.

Efficient, Focused Work

While employees may be discouraged by internal issues such as efficiency losses, outsourcing offers efficient, focused work to a virtual contractor or team. Companies or contractors that provide outsourcing solutions are often more committed and motivated to exceed time and budget expectations.

Ability To Concentrate On Core Business Processes

Outsourcing supportive, non-core processes will allow key management more time to strengthen core processes and focus on the business.

Fill Knowledge Gaps

Partnering with an outsourced contractor or agency will help you gain expertise in areas where you may not be familiar or leverage capabilities that you don’t possess internally.

While taking the first steps towards outsourcing might be daunting at first, it can substantially help your company develop in areas where in-house expertise may be lacking. If you’re interested in saving time, money, and resources while augmenting the domain expertise on your project teams, contact Performance today to talk about about many flexible outsourcing options.

Global-local outsourcingDO-178C