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Software development outsourcing
The world of technology has been changing dynamically. If you want to be competitive, you need to keep improving your efficiency and stay on trend. Sometimes, it is impossible to achieve the expected outcome by drawing on ‘own’ home resources and you need to use labor from outside.
Recently, using an external resource for software development processes has become more and more popular. Such a procedure is called just software development outsourcing.
In this article, we’ll explain more about what outsourcing software development means and what types of outsourcing are the most common, as well as what benefits of outsourcing software development are out there.
3 types of IT outsourcing models
Software development outsourcing means transferring certain functions or projects to an external contractor. It allows businesses to build solutions that haven’t been possible to create before, and at the same time, it is economically profitable.
The most widespread reason for software outsourcing development is the lack of resources - it happens when most resources are assigned to other projects. There are three main types of outsourcing.
Onshoring outsourcing
It is the process where tasks or projects are moved to software developers in the same country as yours. Basically, it’s outsourcing to another city in your country. The main reason is a need for more hands-on involvement in the software development project. While choosing onshoring outsourcing, you gain access to qualified employees with the required knowledge and skills and, at the same time, you don’t face the risks associated with moving tasks to a foreign destination (cultural differences, time differences, foreign tax policies). You can find a cheaper option when compared to local developers and still you invest in your country’s economy.
Nearshoring outsourcing
Today, it’s the most popular among types of IT outsourcing models. Nearshoring outsourcing is hiring a software development team in a country that is close to your own. The country should be easily accessible, both in terms of cost and location. Traveling and holding face-to-face meetings regularly is possible and relatively cost-effective. Also, you get more control over your business. Chances of misunderstanding are minimized thanks to cultural compatibility and work coordination is quite simple. There is no time difference (or just a little) so you can collaborate in real-time. On the other hand, sometimes the number of available providers may be lower.
Offshoring outsourcing
Offshoring outsourcing means commissioning software development processes to distant countries. It’s the most cost-cutting approach to outsourcing. Usually, businesses offshore their projects to outsourcing software development companies that offer full talent pools and low expenses. Offshoring outsourcing allows you to run your business at a lower cost. You can expand your team by choosing professionals from a large talent pool. On the other hand, you have to face time differences so scheduling meetings may be more difficult. Since such a form of outsourcing involves working with a team that is far away, sometimes you may feel like you have to always control their actions to know what they are doing. Offshoring outsourcing should be then based on a trustful and long-lasting relationship or controlled by your trusted project manager..
So, to make it fully clear:
If a U.S. company outsources to Lithuania, that’s offshoring.
If a U.S. company outsources to Mexico, that’s nearshoring.
If a company from NY outsources to Hot Springs, that’s onshoring.
Want to know what you’ll get out of it? – Benefits of outsourcing software development
There are many outsourcing software development pros and cons. First, let’s focus on what outsourcing can bring to your business. The most important benefits are:
- Cost-effectiveness. Outsourcing is a great way to save money. You don’t have to invest in an in-house team and allocate money in recruitment processes and other HR expenses, technology, and IT equipment.
- Your productivity skyrockets. As some parts of the project are moved to an external partner, your team can focus on more crucial tasks.
- You get access to the best talents from different regions, countries, and even continents. You can hire experts that may be unavailable locally.
- You can scale up your business quickly as you have more time and resources to work on new projects.
- Better product quality. Agile software development outsourcing ensures greater collaboration which leads to unmatched speed, efficiency, and productivity. Your agile external team focuses on detecting and fixing bugs so that the final product meets your business needs.
Pros and cons of outsourcing software development
As we already know, hiring a software development outsourcing company may be very beneficial. You can decrease and fully control costs and the productivity of your business increases. You get access to the relevant set of skills and experience that you couldn’t find locally. However, there are also some risks and challenges you should be aware of.
- There may be communication issues, especially if you collaborate with a partner with a different culture. Sometimes, the insufficient English level or time zone difference can also be problematic.
- Before choosing an external partner, you have to conduct proper research to make sure you avoid the risk of data leaks and security issues.
- In some cases, unexpected costs may occur. Some companies hoax their clients with double-billing or give out false overestimations.
- You may have limited control over the development team, especially if you hire freelancers or gig workers.
The good thing is that you can avoid the above-mentioned risks by choosing a reliable, verified partner.
At BrainForge IT, we believe in long-term collaboration, so we do anything to make our clients satisfied. Learn more about us.
In-house vs outsourcing software development – what will be better for your business?
Having an in-house software development team is very convenient. You have full control over all tasks and processes. You can make sure your team knows exactly how to use the tools and how to adapt to the company’s needs. There is compatibility called cultural fit, as well as direct communication. On the other hand, an in-house team means higher costs. You have to buy equipment, pay for recruitment processes and training, as well as maintain employees. Also, hiring full-time employees usually takes more time than establishing a collaboration with an outsourcing software development company. Finally, the number of employees you can meet in-house doesn’t even compare to the number of people you can meet online. This creates a much larger talent pool of available specialists.
What is the best country to outsource software development?
The most popular locations all over the world for offshore software development outsourcing are Central and Eastern Europe, China, India, and South America. The cheapest countries are usually the Philippines, Brazil, and Indie, however, due to cultural differences and language barriers their popularity has decreased a bit in the last few years. On the other hand, Eastern European countries have become extremely popular among IT companies looking for software development outsourcing services. Software developers from East Europe are known for high-quality and good education, reasonable prices, great communication culture, and a high level of spoken English.
Outsourcing software development trends in 2023
At BrainForge IT, we follow the latest technology trends, also when it comes to software development outsourcing. This is what we expect in 2023:
Trend 1.
Cloud computing will be even more important. It will help companies to outsource important IT functions.
Trend 2.
AI will keep growing – companies will be able to delegate some tasks to the software itself. In some cases, it’s possible that software will perform tasks in a similar manner to human intelligence completing tasks.
Trend 3.
Cybersecurity. Data security is a top priority. Software outsourcing companies will have to offer even more reliable security measures.
Trend 4.
Remote work will be a standard, also when it comes to IT outsourcing. Building global teams is a great way to hire the best talents from all around the world.
Looking for a reliable software development company?
Let’s get in touch! We are ready to help you make the most out of software development outsourcing services. Contact us to get more information!
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BrainForge IT Software & Consulting Sp. z o. o. with its headquarter in: 53-125 Wrocław, al. Kasztanowa 3a-5, Poland, VATPL: 8992879435, registered in the Regional Court Wrocław-Fabryczna VI Commercial Division of the National Court Register, registered in the commercial register (KRS) under no. 0000840335, with share capital: 5.000,00 PLN.