Scenarios where outsourcing software development might make more sense than delivering internally

Posted by Success Software Services

‘Do what you do best and outsource the rest.’ - Pete Drucker, Business management consultant

Product managers don’t have it easy. Trying to complete software development projects you face time constraints, technical limitations, skill gaps, and more. With all that bearing down on you and your product teams, it’s no wonder outsourcing is such a popular route to take. Doing so can cut costs, increase scalability and reduce your time-to-market.

However, it’s important to understand that each software company's decision to outsource development resources is unique. It might not always be right for you. That’s why recognizing the situations where outsourcing will bring value is key.

So, let’s look at scenarios where outsourcing might be the right decision.

4 scenarios when outsourcing could be the answer

1. You need to get your product to market faster than you can do internally

Slow time-to-market can lower your market position and put you behind other software companies. But that’s not all. Lengthy delays also frustrate your clients. You might even end up pushing them back into the buy cycle. And, if they choose to buy out-of-the-box instead of waiting for your bespoke software, you’ll lose out on business.

Outsourcing isn’t the only way to speed up time to market. But if you’re looking to speed up your delivery for the same spend it makes sense to outsource. For the same budget, you can often get more done, helping you keep your competitive advantage.

2. You want to scale resources up and down without the negative consequences

Outsourcing allows you to scale up or down as you need. Whether it’s front or backend developers, UI experts, or QA/QC testers, outsourcing enables you to meet demand and say ‘yes’ to new projects. All without overwhelming your in-house product teams.

On the other hand, in rough economic times, outsourcing also allows you to scale back when you need to, without hitting morale (or the headlines).

3. You can’t find the right talent for the project

Forty five percent ****of companies plan to increase their outsourcing, focusing on finding skillsets they can’t access in-house.

If you’re struggling to hire or retain specific talent for a project outsourcing may be for you. It gives you access to top technical experts and technologies to align with the project requirements.

You may have other reasons for choosing not to hire in-house, such as:

  • Not having the budget to take on another full-time developer, or an entire development team.
  • Worrying about over-resourcing in the long-term.
  • Needing a level of stability that you can’t guarantee in a high-turnover geography.

Outsourcing means you can scale up teams from an existing bench of trained talent. You can focus on outsourcing to environments, like Vietnam, where turnover is much lower than places like North America. And you can bolster your in-house teams without the time and costs associated with hiring.

4. You want to lower your costs and make a business model more compelling

Cost saving is the primary driver behind outsourcing decisions, according to research by the National Outsourcing Association. It keeps costs low internally (and, by association, for your clients) in a few ways:

  • Keeping things transparent. Outsourcing is often a clear-cut process that comes with a breakdown of the costs. This helps you budget effectively and only pay for what you need. The right outsourcing partner will discuss your requirements with you and create a bespoke quote.
  • Mitigating internal and infrastructure costs. Hiring several new developers for individual projects quickly adds up. Beyond their salaries, consider the cost of the recruitment and onboarding process. This cost is often unnecessary if you’re only scaling up capacity for one product.
  • Providing you with the latest tech for lower prices. By outsourcing, you’re gaining access to cutting-edge software development technologies for a far more reasonable price than you would if you kitted out all your developers.
  • Flexibility. Your contract doesn’t have to last forever. If you find you can’t justify the cost of outsourced development, you can choose to cut it out of future projects.

It’s important to note, however, that hourly rates aren’t always indicative of cost. If quality or time to market suffers, you may not actually be saving money. So, make sure you work with a team that gets the work done right at a velocity ****that allows you to realise these savings.

Right time, right resources

Do any of these scenarios ring true for you? If your answer’s yes, you might want to consider outsourcing.

But be mindful; it’s not the only solution. Every project is different, so you should carefully assess your situation to understand if outsourcing is the right route. If it is, you’ll need a trusted partner, with a tried and tested methodology.

At Success Software Services, our AIM model provides a firm foundation for a valued outsourcing partnership by integrating with your teams and learning your product. This makes sure you have the right people on board to bring your software projects to market.

Ready to learn more? Get in touch today to discuss your software challenges with one of our specialists.

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