It is not always economically viable for a company to solve secondary business tasks like software development on its own. Exclusively large companies with substantial resources are capable of creating and efficiently developing their own IT departments. For most businesses, however, it would be more profitable to outsource their software development.
Hiring contractors will often allow you to do the necessary work more cheaply, avoid expanding your staff, and consequently, get a higher quality product. In turn, the entrepreneurs can focus on their business development ensuring the basis for their future growth.
Outsourcing software development has obvious advantages, but how do we know it is time to do it? We have compiled a list of key signs indicating that the time has come for you to make that decision.
It is a one-time or secondary task for you
It makes no sense to hire software developers or even worse, to create an IT department from scratch if the product development is a one-time task which will not take too much time.
This is the main advantage of outsourced development – the possibility to quickly involve dedicated experts and pay only for the hours worked without hiring them as office employees.
The same thing applies to the task which is secondary for your company. For example, your company specializes in e-commerce development, but you have a task in the machine learning area. In that case, outsourcing is there to help you.
You do not want to expand your staff
Many companies outsource software development for the simple reason that the team available is not capable of doing more work, and at the same time, hiring and training additional employees requires too large a budget.
Using the third-party contractors’ services, you also get a high level of flexibility, as you can set up as many working hours as you need depending on the budget and other factors.
You lack the necessary expertise
To reach certain objectives, you may need top specialists not available in your city. In addition, you may need something extremely specific and exclusively for a particular development stage.
In this case, the choice actually is reduced to two options only: either you outsource this task or simply give up your implementation plans.
Your budget and deadlines are limited
According to IBM, 27% of the companies resorting to IT outsourcing do it primarily to reduce costs. US and Canadian developers’ services are twice (or even more) as expensive as hourly rates of a Ukrainian software engineer of a similar level. Now imagine that you have a project requiring several thousand hours…
When you are short of time and have a clear product release deadline, it is worth considering using outsourced services. Solving the problem on your own, you may spend many years to reach the objective which a third party core company will manage to do within a few months with no trouble. Having more experience in implementing diverse projects, contractors will be able to assess the necessary time more accurately as well.
You do not want to distract your employees from more important things
The basic principle for all companies is as follows: it is best to outsource everything that is not included in the company’s expertise that provides competitive advantages.
Even if you have a sufficient number of experts in your office necessary to implement your project, it is not always the case that it would be a good reason to divert them from other tasks. Their time may cost you much more than the cost of outsourcing developers.
Your project is small or, on the contrary, too large
Everything is quite simple here, and this paragraph can logically be derived based on the previous ones presented in this article:
- if your project is small, for example, you have to create a small module for CRM/ERP, it would be simply unprofitable to hire more employees;
- on the contrary, if the project is huge and you have to create a whole separate department to implement it on your own, it should also be outsourced to reduce costs and risks.
Otherwise, you can apply a proven strategy: outsource a small piece of work to a service provider to primarily verify quality and responsibility, and then delegate the entire work on a large project to them.
So… Is it time to outsource your business development needs?
Saving the budget, involving an experienced development team, quick scaling up, and releasing your product within a short time frame – these are only the most obvious outsourcing advantages which are crucial for business development.
If you conclude that outsourced software development is the best model for your company, we recommend you read our article on this topic: 7 Best Practices for Successful Offshore Software Development. These tips will help you make your collaboration with the service provider maximally efficient.
We hope our article will help you to come to the right decision. If you are looking for a reliable partner capable of implementing IT projects, contact us, and Lvivity professionals will advise you on all issues.