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SOFTWARE DEVELOPMENT OUTSOURCING: THE EXTRA PUSH YOUR COMPANY NEEDS

Software development outsourcing is becoming more popular, and this is for good reason. In 2021, the global IT outsourcing market was estimated to be worth $109 billion and is projected to grow to $141 billion. This shows that more businesses are looking to outsource IT-related tasks such as software development. It is easy to understand why.

The software industry is becoming more saturated and competitive. This means that for companies to survive, they must churn out quality software products. The problem, however, is that it is becoming more challenging for companies to onboard and maintain a skilled workforce. These companies have to commit a lot in terms of training and human resources management. Against this backdrop, software development outsourcing has become an appealing alternative.

WHAT IS SOFTWARE DEVELOPMENT OUTSOURCING?

Software Development Outsourcing describes an arrangement in which a company chooses to employ the services of an external software development agency as opposed to an in-house team to carry out tasks of a software development project. A 2017 survey by Statista revealed that software development was the most outsourced IT function, showing the strong demand for software outsourcing.

WHY OUTSOURCE SOFTWARE DEVELOPMENT? THE PROS AND CONS

Clearly, software development outsourcing is getting more adoption because of its merits. Here are some of the benefits your company can gain from outsourcing software development.

PROS:

  • Access to Top Expertise

    It can be challenging to recruit needed talent directly into your company. Outsourcing allows you to access such talented engineers easily and get them on your project. For instance, with a company like YouDigital, you gain access to a pool of well-trained engineers that can deliver top-notch execution for your projects.

  • Flexibility

    Outsourcing allows you to scale up and scale down as necessary. This means you only have to engage third-party software development teams when needed and on a project-by-project basis. As opposed to permanent employment, you do not have to pay these teams all year round, even when you might not require their services as much.

  • Lower Cost

    A primary motivation for most companies to outsource is lower overhead spending. With outsourcing, you do not have to spend on salaries and other employee costs for a large in-house team. Instead, you can simply outsource to third-party teams at competitive rates. YouDigital, for instance, reduces software development costs by 30-50%.

While outsourcing definitely has a lot of advantages, it is not without its risks. Here are some possible drawbacks of outsourcing software development:

CONS:

  • Security Risks

    Given that many software development projects involve handling confidential customer information, outsourcing may increase the risk of leaks for your business.

  • Quality Standards

    Low-quality standards are an inherent risk when outsourcing software development to external agencies. This is because you do not have direct control over the training standards of engineers. Similarly, it is challenging to manage an outsourced project directly.

  • Language & Cultural Barriers:

    An external software development might not be very proficient in English, severely impacting communication. Similarly, time zone differences could constitute an issue, particularly with respect to remote teams.

As with anything, outsourcing software development has its risks. Nevertheless, these risks are easily managed, and overall, outsourcing software development remains a great option.

MODELS OF SOFTWARE DEVELOPMENT OUTSOURCING

There are three popular models of outsourcing. These are Staff Augmentation, Dedicated Team, and Project-Based models. Each of these models is suitable for different business stages and structures. In subsequent paragraphs, we will take a closer look at these models.

Staff Augmentation

Staff augmentation is an outsourcing model that involves adding skilled technical expertise to your in-house team, either short- or long-term. In essence, the goal of outsourcing in this model is to complement your existing in-house software development team. This might be in the form of hiring experts with skill sets your in-house team doesn’t have or simply getting more technical resources for projects beyond your in-house capacity. This model allows you to directly manage your team and project.

Dedicated Team

This refers to a model in which an outsourcing agency provides an onsite or remote team exclusively dedicated to a particular project. This model is typically used for long-term projects where the scope is dynamic as opposed to strictly defined. The external team typically keeps the in-house team updated on the project's progress on a daily basis. This model also allows you to maintain close control of the team and the project. However, it might be unsuitable for short-term projects.

Project-Based Model

This refers to a model in which an outsourcing agency provides an onsite or remote team exclusively dedicated to a particular project. This model is typically used for long-term projects where the scope is dynamic as opposed to strictly defined. The external team typically keeps the in-house team updated on the project's progress on a daily basis. This model also allows you to maintain close control of the team and the project. However, it might be unsuitable for short-term projects.

SOFTWARE DEVELOPMENT LIFECYCLE

There are many stages involved in the development of a software product. Many aspects of the software development lifecycle can be outsourced. Let’s look at these various stages, what they entail and how they can be outsourced.

  • Planning

    This involves setting out the functions of the software development team and setting timelines. While this might seem like the least activity to be outsourced, there might be some merit to outsourcing planning. Large companies often engage third-party vendors to handle aspects of software development planning.

  • Requirements

    Requirements refer to the description of what a software product does and how it connects with the needs of relevant stakeholders. This is another stage of software development that can be outsourced to an external specialist.

  • Design & Prototyping

    Often, an in-house IT team might not have the necessary creative professionals to handle the design and prototyping of the software properly. In such scenarios, outsourcing to a digital design agency with the required skill set could be a great option.

  • Software application development

    This refers to the actual software programming aspect of a project. As explained in this article, there are many reasons to outsource software development. These include cost efficiency and lack of expertise or capacity.

  • Testing

    Testing is often viewed as a source of delay during software development projects. The in-house team can carry out testing while software development is outsourced. However, this could lead to communication hitches, causing further delay. As such, where the outsourcing engagement is large enough, testing could also be outsourced to the vendor.

  • Deployment

    This refers to how the code progresses from testing to production. When outsourcing software development, creating a continuous delivery pipeline might be necessary to reduce organisational risk.

FINAL THOUGHTS

Undoubtedly, software development outsourcing is an activity that could make all the difference for your business. It is, however, crucial that you consider the specific situation and requirements of your business to determine the best outsourcing model to adopt.

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