What is outsourcing?
Outsourcing refers to going “out” to find a necessary “source” (usually employees). In the matter of software development, outsourcing means an arrangement in which a company has some of its tasks done with the help of an outside partner.
Depending on the distance between a company and and its outsourcing vendor, there are 3 types of outsourcing:
- Onshore – services are provided from the same location or country
- Nearshore – from another country on the same continent
- Offshore – from another country, on another continent
Software development outsourcing has become an integral part of the modern IT industry as an important driver of business processes. It is a tried-and-tested model that gives long term competitive advantages. Below are the most common reasons why software development companies outsource.
Top 5 reason for software development outsourcing
- Focus on core functions
- Reduce costs
- Improve quality
- Increase speed to market
- Foster innovation
The pros and cons of outsourcing software development project
The scope of outsourced projects can range from a single large contract to hiring several individual contractors. It depends on the size of a client company and its business needs. The pros and cons of outsourcing are the true battleground for endless discussion, so let’s consider them.
The benefits of software development outsourcing
- Expertise and speed – Special tasks can be outsourced to vendors with the necessary equipment and experience you don’t have.
- Concentration on your core business – Outsourcing frees up your specialists so they can focus on developing the core functions and frees you for primary business tasks instead of managing the team.
- Reduced operational and recruitment costs – You don’t have to maintain in-house specialists. Moreover, you don’t have to hire your own personnel; you just choose a team to work with.
The disadvantages of software development outsourcing
- Risk of data breach
- Risk of receiving low-quality deliverables
- Lack of focus on your project
- Risk of subcontracting your project to third-parties
What is important? All of these disadvantages and risks can be neutralized just by choosing a reliable, trustworthy, service providing company able to handle your processes like its own.