Rising Traction of Software Outsourcing Services
In the past few decades, the software industry has seen immense growth. With legions of organizations trying to come up with their software, lack of development and building knowledge stands as a hindrance. There is no denying that developing software from scratch requires a lot of skill. Still, that skill may not be present in every organization, even if they have a revolutionary software idea. In that case, software outsourcing is the service they need to opt for.
Software outsourcing is hiring an external organization to develop and manage software on your behalf. The outsourcing company will handle all the tasks involved in the software development process. The software industry is currently valued at over $92 billion and is expected to grow nearly five percent every year. Having a significant share in the IT industry, leaving behind software development can be catastrophic for an organization in the long run. Over 60 percent of organizations outsource software development in the USA and Canada.
Software Outsourcing Models:
Software outsourcing can be done in different ways depending on the project and the organization’s requirements. Onshore, offshore, and near-shore are the three software outsourcing models explained below.
Type 1: Onshore Software Outsourcing:
Onshore software outsourcing means both the organization hiring the company and the outsourcing company are located in the same country. The reason why certain organizations prefer onshore software development companies is the eradication of communication barriers due to language. However, the downside of this outsourcing type is the extra hiring cost. Though it does not apply to every nation, as companies prefer outsourcing to reduce software development costs, the onshore method may not work for them.
Type 2: Offshore Software Outsourcing:
Opposite to onshore, offshore software outsourcing is when the outsourcing company is located in another nation. Offshore outsourcing is the most preferred method by organizations as it is highly cost-saving without compromising service quality. However, some may feel a communication gap due to different time zones and languages. Several communication tools and applications can help in minimizing this gap.
Type 3: Nearshore Software Outsourcing:
Nearshore outsourcing is similar to offshore, but the outsourcing company is located in one of the neighboring nations. Being located nearby, communication is a bit less complicated, but there is only a marginal difference in the service cost.
Cost of Software Outsourcing in Different Regions:
There are currently five regions leading the software outsourcing industry: Asia, South America, Eastern Europe, Western Europe, and North America. Below are the characteristics and the cost of hiring this service in these regions.
- Asia: The prominent countries offering software outsourcing services in Asia are China, the Philippines, Singapore, Indonesia, and India. The majority of the western world prefers Asia for this service due to the highly skilled talent pool at the least cost among all the regions. With the rapid IT development in these regions, the quality standard of the service is maintained as well. The average cost of software outsourcing in Asia is $25-30 per hour.
- South America: South America, Argentina, Brazil, Chile, and Colombia have dominated this industry. Companies in North America prefer to hire outsourcing companies from these regions as there is a minimal time difference, acceptable service quality, and cheaper costs. However, the region is still growing in terms of offering outsourcing services, due to which in-depth analysis of a service vendor is necessary to get the right service. Here, software outsourcing costs between $40 and-50 per hour.
- Eastern Europe: Hungary, Ukraine, Romania, Bulgaria, and Poland are the countries offering outsourcing services from Eastern Europe. The low operating expenses have helped these countries offer some of the best software development services at affordable prices. An organization can get its services at a budget-friendly rate of $30-55 per hour.
- Western Europe: The countries offering software outsourcing services in Western Europe are the UK, Austria, Switzerland, Germany, and Belgium. The high cost of attaining this service from Western European nations is the biggest reason organizations from different parts of the world avoid these nations. However, all of these are English-speaking nations, eradicating both parties’ language and cultural barriers. The per-hour cost of getting these services from this region is $60.
- North America: The most expensive of all regions, North American nations, including Canada, Mexico, and the United States, offer software outsourcing services at over $100 per hour. Undeniably, the cost of this service is on the higher side in this region which is why organizations with a limited budget go for Asia or South America rather than North America.
Benefits of Software Outsourcing:
- Cost Saving: In an organization, whenever a new product is developed, the first thing considered before commencing the actual work on that project is its budget, and the same applies while developing software. Outsourcing software development from Asia and South America is comparatively cheaper than North America or Europe. A Deloitte study revealed that over 70 percent of companies who outsource software development end up saving money on the project.
- High Flexibility: There are stances when an organization’s priority is not software development. In that case, their core team might not remain productive. On the other hand, there can be a spike in the development workload that the existing team may not handle. Software development outsourcing can handle both these situations as you will have the flexibility to attain professionals as per the project’s requirements. Whether you want more human resources or less, outsourcing will give you the flexibility to get what you want.
- Efficient Workflow: When you outsource software development, you give your work to someone else. You have to spend minimal effort in software development, but your time is also saved. This splitting of tasks grants you some additional time that can be used in other tasks, leading to efficient workflow.
- Timely Project Delivery: Most outsourcing companies work round the clock to meet specific deadlines and complete the project. When a custom software development company manages your project, you are ensured that they will deliver the software within the given time and without compromising code quality.
Cons of Software Outsourcing Services:
- Communication: The most common outsourcing method is the offshore method, where the outsourcing company is located in an entirely different region. Due to a different nation, language and time zones can be a major barrier to establishing clear communication. If there is improper communication, there is a possibility of misconceptions that can influence the final software.
- Data Security: In the present times, data leakage has become extremely common. Sometimes, organizations do not seek compliance or sign an NDA before finalizing the deal. Doing so can put the project’s data and the entire organization’s data in jeopardy. It is always advised to investigate whether the outsourcing company follows any data security compliances, has certain privacy policies, and uses its practices for data security.
- Differences in Business Viewpoint : To work in perfect sync, both the organization hiring the outsourcing company and the vendor should have the same business philosophy. Several stances have occurred where the two parties could not agree to a certain task later in the development stage. This difference can spike your overall cost and time as well. It’s why many experts advise looking for a flexible and best software company to work with so that they can adjust as per the needs of their clients.
In-house VS Outsourcing Software Development:
- Cost: Hiring a full-time employee in an organization comes with the professional’s salary and many expenses due to several processes in the procedure like HR and onboarding. Sometimes, finding the right candidate whose way of working aligns with the organization may consume additional time, increasing the cost. When combined with the infrastructure and tools cost, the overall expense of hiring an in-house software development team can go high. On the other hand, outsourcing does not require hiring full-time personnel or expensive infrastructure. All you have to do is lookout for the best software development services company as per your needs, and you are good to go. There are no hidden costs, and you may get the same services at affordable rates.
- Performance: An in-house development team may work for a limited time and may even take leaves, due to which the entire project could be stalled. In that case, you do not have any other option but to wait for the team to come back and resume the work on the software. However, that is not the case with an outsourcing software development company. The work on a project is never stalled, no matter what happens. In case of the unavailability of a developer for your project, the vendor will provide a substitute so that your project is completed on or before the stipulated deadline.
- Communication: The area where the in-house software development team is a clear winner is maintaining regular communication. There are no physical or language barriers within the team. On the contrary, outsourcing may come with a communication challenge for organizations. Though communication is not a skirmish in onshore and Nearshore outsourcing models, they are the least used outsourcing models. The offshore model is the most frequently followed model, and it may bring a major communication gap between the two parties. It is the responsibility of the hiring organization to ensure that good communication is maintained between the two parties.
Do You Need Software Outsourcing Services?
Often people remain dubious whether they should connect with a software development outsourcing company or not. There are both benefits and disadvantages to getting these services, as explained earlier. When it comes to making the right decisions, it all depends on the requirements or situations you are currently in. Here are some of the reasons you should get these services for your next software development.
- Time Constraint: Developing software is not a one-day task. Rather it requires a lot of time and effort. There can be stances when you are occupied in single or multiple projects but still want to ensure that the work on the new project is carried out. In that case, connect with a top software company that can do your software work. Not only will you have perfectly working software, but without spending too much time.
- Tight Budget: Having an in-house software development team is expensive, especially for small and medium-sized enterprises. If you are a startup or can only spend limited finances on software development, outsourcing the development process is the right thing to do. Rather than paying full-time to the employees, you will only be paying for the desired project, making it perfect for organizations with a tight budget.
- Need an Experienced Team: Not everyone is highly knowledgeable in the beginning. New organizations may not have the right experience to hire the right professionals as per their needs. Rather than spending their time looking for the right personnel, it is suitable to look for the right outsourcing company. These companies are extremely clear on the skills they want in a software developer, and their expertise will help you get the right software development service.
Software Outsourcing Best Practices:
Rather than hiring a custom software development company that you like, it is best to follow certain practices that will reduce the risk and ensure that you get the best services from the vendor.
- Search for an All-Rounder: Software development requires specific skillsets for the best outcome. Ensure that the outsourcing company you are hiring should possess all the basic and advanced skill sets to get the job done. Apart from that, if they offer additional services like DevOps and DevSecOps, they can benefit your organization in the long run.
- Calculate Overall Costs: One of the biggest reasons organizations prefers offshore outsourcing is that it is highly cost-effective. Even though it is significantly less expensive, it is still best to calculate the project’s overall costs. Sometimes, two organizations may not have much difference in the service; their overall cost may vary. Calculating the cost of getting outsourcing services may reduce the cost significantly.
- Determine the Infrastructure and Technologies: Knowing about the existing infrastructure and technologies of the software development company in the USA will allow you to determine the quality of their services. Make sure that they have the latest tools and infrastructure for software development. Moreover, know about their plans for implementing or introducing any new technology with their services.
- Always Communicate: Often organizations end up losing tons of their money in software outsourcing solely because they are not communicating enough with the vendor. If there is insufficient communication, the software quality will be compromised. Always make sure that there is ample communication regarding the project and QnA with the software development team for the best outcome during software development.
ThinkSys Software Outsourcing Services:
Software quality depends heavily on the developer. ThinkSys is one of the major software services companies with legions of services under their portfolio. Being a renowned software outsourcing company, ThinkSys has worked with companies located in different parts of the world. With over a decade of working experience in the software industry combined with the best practices, ThinkSys has established itself as the pioneer in software outsourcing. Hers the list of software development outsourcing services we offer:
Create and manage custom software with the custom software development services by ThinkSys for reliable, agile applications. Be it cross-platform app or application integration; we can help you create as per your requirements.
Get mobile applications for Android and iOS to leverage the rising number of smartphone users globally. From idea curation to release on the respective app store, the mobile application development service will manage every step of the process.
Our QA Experts provides manual and automated solutions for both application/website and ensure smooth and efficient software testing throughout complete software development lifecycle.
Eradicate the complexities of your software and make it more user-friendly with ThinkSys’ user experience service to ensure all the technical requirements are fulfilled without compromising the user experience.
Implement DevOps in your organization with ThinkSys to bring a cultural change that will reduce the software development lifecycle and improve the software quality. Know more about our detailed DevOps Consulting Services.
Eradicate the possibility of human error in software delivery with the seamless implementation of CI/CD pipelines from ThinkSys CI/CD Experts.
Add a layer of security in DevOps by implementing Security as Code for developing secure software with ThinkSys DevSecOps Experts.
ThinkSys Software Outsourcing Strategies:
At ThinkSys, we follow a systematic approach to ensure the best software outsourcing services. Below explained is the strategy that we follow in our outsourcing service.
Strategy #1: Connecting with the Client-
The first step towards successful software outsourcing is connecting with the client to understand their needs. During this part, we also provide the information and goals that we can achieve in the given time. By using cutting-edge technologies combined with the expertise of our professionals, we make sure that the software meets the expectations of our clients.
Strategy #2: Constant Improvement-
ThinkSys believes in continually improving the software outsourcing and the development process for building robust software. Our professionals adapt to the industry’s ever-changing needs, ensuring that your software remains future-ready.
Strategy #3: Automation-
Automation is the key to reducing the development time while minimizing the error possibility. We always try to implement automation in the processes as much as possible to enhance efficiency and reduce manual work in the process.
Strategy #4: Agile Methodology-
Agile methodology is renowned for releasing software quickly without compromising the software quality. With that in mind, ThinkSys Inc always prefers to use agile methods in software development outsourcing to make sure that the team’s core focus remains on collaboration, enhancing the quality, and testing the software.
Software outsourcing service by ThinkSys is all about helping organizations build software for the betterment of their business. With the ThinkSys software development expertise by your side, your software will be built, optimized, and maintained effectively. ThinkSys has helped organizations of different industries, including:
- Financial and Banking.
- Real Estate.
- Social Media.
ThinkSys Inc has a proven track record of providing software outsourcing. If your organization belongs to this or any other industry and is looking for software outsourcing services.
Frequently Asked Questions(FAQ) Software Development:
Many organizations prefer software outsourcing solely due to its affordability. Rather than looking for the best developer in your geographical area, you will be getting the right software development from a region where the same service is more affordable.
Nearshore outsourcing is when the software outsourcing vendor is located in a neighboring country. Depending on the location, a Nearshore outsourcing vendor can be cheaper or more expensive.
Though both the options may give you the results you were hoping for, software outsourcing can be more affordable. Furthermore, it is time-saving, grants access to the best talent around the globe, and allows the organization to focus on its goals.