Many companies rely on software development outsourcing to get work done more quickly, and demand continues to increase. In 2019, the global outsourcing market was worth $92.5 billion. Some reports even note that outsourcing will be critical to stay competitive in the worldwide economy. This is, in large part, because of what is now possible with nearshore and offshore outsourcing services.
However, this doesn’t mean that outsourcing doesn’t come with challenges. This post will talk about why companies choose offshore software development and how you can make it work for your next project.
Why Companies do Software Development Outsourcing?
In today’s fast-paced digital landscape, companies are constantly seeking ways to innovate, scale, and stay ahead of the competition. One strategy that has gained significant traction is outsourcing software development. But what drives businesses to take this route? Here are some compelling reasons:
- Cost Savings: One of the primary motivations for outsourcing is the potential for significant cost savings. By outsourcing, companies can avoid the expenses associated with hiring full-time employees, such as salaries, benefits, and training costs. Instead, they can tap into a pool of skilled developers at a fraction of the cost, often in regions where the cost of living—and consequently, development rates—are lower.
- Access to a High-Quality Development Team: Outsourcing allows companies to access top-tier talent without the constraints of geographical boundaries. These development teams bring a wealth of experience, expertise, and specialized skills to the table, ensuring that projects are executed to the highest standards.
- Time Savings in Hiring: The hiring process can be time-consuming and challenging, especially when searching for specialized skills. Outsourcing bypasses this lengthy process, granting businesses immediate access to experts who are ready to jump into projects without the typical onboarding delays.
- Access to Global Talent: The world is brimming with talented software developers. Outsourcing breaks down geographical barriers, allowing companies to scout and collaborate with the best minds globally. This global perspective can also introduce diverse viewpoints and innovative solutions that might not have been considered otherwise.
Outsourcing software development is not just a trend—it’s a strategic move that offers tangible benefits. From cost savings to accessing global expertise, it empowers companies to achieve their goals efficiently and effectively. Whether it’s launching a groundbreaking app or optimizing internal processes, outsourcing is the key to unlocking a world of possibilities.
Why offshore software development outsourcing?
Before we talk about how you can make offshore outsourcing work, it’s important to discuss why this type of outsourcing is effective. Outsourcing serves as a great way to adapt to changing needs or bring in additional expertise. That isn’t a new concept, but offshore outsourcing is relatively new.
This outsourcing method is only possible in the way we know it today because of advancements in technology. It expands the talent pool that your company can access while reducing the total costs to complete a software development project. Many companies also choose “nearshore” outsourcing, which can offer similar benefits while reducing the risk of some common issues.
What is nearshore software development outsourcing?
Nearshore is similar to offshore development in that it requires outsourcing to another country. However, the difference here is that the location you outsource to is near your own. It serves as a great balance between onshore and offshore options and often allows you to maximize outsourcing benefits.
If you’d like to know more about the different types of outsourcing, check out our guide to build a solid foundation for software development. It covers outsourcing methods and the pros and cons you can expect.
Both of these options require you to approach your software development project with specific considerations in mind. Here’s how you can make offshore software development work for your next project.
How to choose between offshore and nearshore software outsourcing services
If you go entirely offshore, be sure to make accommodations for the time zone and cultural differences. This will reduce or eliminate any overlap in remote and home team work schedules. These differences are manageable but can take time to adapt. Some of your team members will likely have to shift their hours to minimize communication delays. Leaders need to both understand and support these schedule modifications.
Nearshore remote teams in the Americas and Europe, on the other hand, can generally offer a nearly complete workday overlap. That simplifies real-time synchronization and collaborative problem-solving.
Software Development Outsourcing Models
In the realm of software development outsourcing, there isn’t a one-size-fits-all approach. Different projects and organizational needs call for different engagement models. Understanding these models is crucial for businesses to make informed decisions and select the one that aligns best with their objectives. Here’s a deep dive into the three primary software development outsourcing models:
| Outsourcing Model | Definition | Key Features | Benefits |
|---|---|---|---|
| Staff Augmentation | External experts are integrated into an existing in-house team to supplement specific skills for a defined period. | – Direct control over augmented staff. – Flexibility to scale the team. – Ideal for short-term projects. | – Quick onboarding. – Cost-effective. – Seamless integration with existing workflows. |
| Managed Team | The provider assembles, manages, and oversees a dedicated team tailored to the client’s project. | – Provider handles administrative tasks. – Regular updates and checkpoints. – Team operates as an extension of the client’s organization. | – Reduces administrative overhead. – Access to a cohesive team. – Consistent quality and performance. |
| Project-based | The client outsources an entire project or module to an external provider who delivers within the agreed scope, time, and budget. | – Clear and well-defined project scope. – Fixed pricing. – Provider takes full ownership of execution and delivery. | – Ideal for clear-scope projects. – Minimizes risks. – Allows focus on core business activities. |
Each of these models offers unique advantages and can cater to varying project needs and organizational structures. By understanding the nuances of each, businesses can make strategic decisions that drive successful software development outcomes.
4 Key concepts to focus on when working with outsourcing software development companies
Want your outsourced software development project to be a success? Here’s what you should focus on when choosing an outsourcing partner.
Understanding the talent
To make offshore or nearshore software development work, you need to understand two things regarding talent. The first is what qualities you’re looking for in the people you outsource to. You need to communicate with your vendor or outsourcing partner to understand if what they offer is the right fit for you.
Companies often outsource because they need to supplement the talent they have inside their organization. When you understand the talent available to you and their specific knowledge, you increase your chances of having a successful project.
For example, here at Unosquare we train our developers, Scrum Masters, QA Experts, and business analysts on the agile philosophy. We know that adaptability and collaboration are essential in an outsourced software development project.
Prioritize communication
If you’ve seen any of our other blogs on outsourcing, you may know that we believe communication is a critical component. The same applies to offshore software development outsourcing. Before you choose offshore, think about how your team will communicate with the people you’re outsourcing to.
If possible, create a plan for getting or giving feedback and checking in. You should be confident that you’ll always be “in the loop” on your project. In addition, ask your outsourcing vendor or partner about their communication style with clients.
Begin with the end in mind
If you want offshore software development to work for you, you need to begin with the end in mind. That may seem counter-intuitive, but this approach can help you simplify project management. Think about what you want the end goal to be and what kind of support you need to get there.
This will allow you to build a clear project plan and ensure that everyone is on the same page. It will also help you set expectations and milestones that lead to the results you want in the project.
The lifecycle of an offshore software development project
Every software development project is going to look a little bit different. However, with offshore or nearshore software development, it’s key to ensure that everyone follows the same framework or methodology. Agile is usually the best fit for these projects because it focuses on continuous feedback and iterations. That can help your internal team, and your outsourcing partner works together more effectively. Statistics also show that agile projects are the most successful. A report from PWC shows that agile projects are, in fact, 28% more successful than traditional projects.
That said, being on the same page about methodology isn’t the only thing you should concern yourself with throughout the life cycle of a project. You should also set your own benchmarks and milestones throughout the development life cycle. That will help you gain visibility into where the project stands.
Ready to outsource software development?
We’re here to help. At Unosquare, we focus on finding the best talent in the world. That way, you can outsource with confidence and bring in the expertise you need to get your software development project done. Let us provide expertise for your teams in a way that is fast, transparent, and efficient. To find out more about what Unosquare can do for your organization, check out our blog.
