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Software Development Outsourcing: the ultimate Guide to win in 2022

Umut Sönmez

Jul 20, 2022 • 7 min read

There are plenty of reasons why you might want to outsource your software development work. Maybe you’re a startup with limited resources and you need to focus on other priorities. Maybe you work for a company that outsources its software development projects, but you’re not sure how to go about it. Or maybe you just need some help getting started and don’t know where to start. In this article, we’ll cover everything from finding the right outsourcing partner to understanding the various types of software development outsourcing services. So whether you’re thinking about software development outsourcing or you want to make changes to your current process, this guide will help you get started.

1. What is software development outsourcing?

Software development outsourcing (SDO) is the process of contracting a third-party organization to develop software for you. SDO can be used for a variety of software projects, including web applications, mobile apps, and software systems.

The main benefits of using SDO include: reduced project costs, faster turnaround time, and increased flexibility and control over the project. However, there are also some risks associated with SDO, including the possibility that the contractor will not meet your expectations or deliver the desired outcome.

To understand what SDO is and how it works, let's first take a look at the history of software development. Software development has evolved over the years from a purely manual process to one that is increasingly reliant on automation. Early software development methods involved developers writing code by hand on mainframe computers or in collaboration with other developers in a centralized environment. In the 1950s and 1960s, many large companies began adopting automated programming tools such as COBOL (a computer-programming language first developed in 1959) and FORTRAN (a computer-programming language first developed in 1954). These tools made software development more efficient and allowed companies to scale their operations by creating larger programs. However, this early programming needed a lot of effort, resources, and bug fixing. Also, at those times there wasn’t enough talent so this made the process even harder.

2. Should I outsource?

software development outsourcing

The decision of whether or not to outsource software development is a difficult one. There are pros and cons to every option, and no one decision is right for everyone. However, the following tips should help you make an informed decision.

Pros of Outsourcing Software Development:

- Reduced cost: When you outsource software development, you can reduce the cost of your project by hiring a less expensive contractor or subcontractor.

- Increased speed: Outsourcing can speed up the overall process of developing a software project by allowing teams of developers with different skills to work together more quickly.

- Greater flexibility: When you outsource software development, you have more flexibility in how the project is executed. This can allow you to customize the project to meet your specific needs more easily.

- Improved quality: When you outsource software development, you can rely on a team of experienced professionals who will ensure that your software projects are high quality. Choose companies that carry quality in their products and company culture.

Cons of Outsourcing Software Development:

- Reduced quality: Though outsourcing can lead to decreased costs, it also increases the risk that your software projects will be of lower quality than if they were developed in-house. To prevent this, you need to be sure that your contractor gives attention to quality. 

3. How can software development outsourcing help me as a CTO or product manager?

Outsourcing your software development projects can be a great way to free up your time and resources while still meeting project deadlines. This guide will outline the benefits of outsourcing, as well as give you tips on finding the best vendors for your needs.

4. Is outsourcing software development for startups, product companies, or enterprises a good idea?

outsourcing of software development

There is no one-size-fits-all answer to this question, as the decision of whether or not to outsource software development will vary depending on a number of factors specific to your organization. However, there are a few key considerations that should always be taken into account when evaluating the viability of outsourcing:

1. Size and complexity of the project. The bigger the project and the more complex it is, the more likely it is that using an external contractor will be a better option than doing it internally. On the other hand, smaller projects and those with simpler features may be able to be completed more efficiently by working within your own team.

2. The skill set required. If you need specialized skills or experience in order to complete a project, then outsourcing is likely not an option. Conversely, if most of the work can be handled by standard programming tools and techniques, then outsourcing may be a good choice.

3. Cost vs. time savings. In general, costs associated with outsourced development are usually higher than those incurred when developing projects internally, but there can be significant time savings associated with contracting out for software development services. It's important to weigh these time savings against the cost of development. At the end of the day, you need a high-quality software to be successful.

5. How can I ensure success with outsourcing?

When it comes to outsourcing software development, you want to make sure that you are doing everything possible to ensure success. Meet with the contractor's team members. Be sure that there are separate project managers. Also, working with a team full of different types of developers and designers will make your project successful. 

Software Development Outsourcing: the ultimate Guide to win in 2022 1

6. What are the risks of outsourcing software development?

When it comes to outsourcing software development, there are a few things to keep in mind. First and foremost, be aware of the risks associated with this type of work. Second, make sure you have a solid plan in place before starting any negotiations. And finally, be sure to have a contingency plan in place in case something goes wrong. Here are five of the most common risks associated with outsourcing software development:

1. Quality Control Issues

If you outsource software development to an inexperienced or unqualified team, you run the risk of ending up with a product that is buggy or incomplete. This can lead to major headaches down the road when clients start asking for changes or updates, and the project falls behind schedule.

2. Time Commitment Issues

If you outsource software development to a team that lacks the necessary expertise or resources, your project could take longer than expected to complete. This can impact your bottom line in two ways: first, it can lead to additional costs; and second, it can decrease the overall quality of your product.

3. Conflict of Interests

If your outsourced team members have interests that conflict with yours (for example, they are working on projects that overlap with yours) this can be an issue. To overcome this, be open and talk about the details at the beginning of the project.

7. When is the right time to outsource software development?

This question can be difficult to answer because there are so many factors to consider. Factors such as the project's complexity, budget, timeline, and team size all need to be considered. However, some general rules can help guide decision-making.

If the project is complex or time-sensitive, outsourcing may be a better option. Complex projects often require more resources than a small team can provide, so outsourcing can help get the job done in a more timely manner. Additionally, outsourcing can save money on the project. If done correctly, it can also increase the quality of the finished product.

On the other hand, if the project is not very complex or time-sensitive, a small team may be able to handle it. In these cases, outsourcing may not be necessary or even possible. Instead, reducing the project's complexity may improve its chances of success.

In general, it is best to assess a project's complexity and make a decision based on that assessment. There is no one answer that fits all situations.

Software Development Outsourcing: the ultimate Guide to win in 2022 2

8. How do I choose the perfect software development company for outsourcing?

In order to choose the perfect software development company for outsourcing, it is important to understand the different types of outsourcing available and how they work. Below are descriptions of three common types of outsourcing: offshoring and sub-contracting, and licensing.

Offshoring

Offshoring is when a company outsources its software development to a foreign company or country. The benefits of offshoring software development include lower costs and increased flexibility due to the distance between the customer and the developer. However, there are several considerations that must be taken into account before offshoring software development, such as the language barriers between the customer and developer, cultural differences, and regulatory constraints.

Sub-contracting

Sub-contracting is a type of outsourcing where a company contracts out specific tasks or parts of a project to a third party. This type of outsourcing is often used when a company has limited resources or expertise in certain areas, or when it wants to focus on other areas of its business. Sub-contracting can be divided into two main categories: front-end subcontracting (or design and development) and back-end subcontracting (or system administration).

Conclusion

When you decide to outsource your software development, be sure your contractor focuses on quality. Check the previous jobs. Understand how they work. The right software development companies work agile, communicate openly, and deliver high-quality products.

With the right contractor, you can focus on marketing and grow your business while your contractor develops your software.

Read more about why you need a software development firm in 2022.

Umut Sönmez

Umut is a business developer and an entrepreneur with multiple exits. He arrives in Vetrina Live as Chief Business Development Officer after working in different C-level positions across the globe. He lives in Las Palmas with his wife and Yorkshire Terrier.

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