Software Development Outsourcing – The Definitive Guide

In a world where people depend on applications, it can be costly to keep an in-house team of developers, that’s why most organizations opt to outsource software development. You’re already familiar with outsourcing services but probably aren’t much informed about how software outsourcing goes.

Do you think outsourcing software development is something worth trying out or do you have doubts about whether it will suit your firm’s software development needs? this post offers deep insight into everything you’d like to understand about outsourcing your software development needs.

What’s Software Development Outsourcing?

In simple terms, outsourcing software development is allowing an external company with skilled developers to take charge of certain tasks instead of using an in-house resource. Almost every industry today has switched to delegating its processes to other firms.

The software development industry ranks top in outsourcing services as reported by Statista. Why is it so rampant today? It eliminates the limitations of a firm by allowing them to focus on their core business rather than the technicalities of software development.

Developed Fortune 500 companies and startups alike, rely on software outsourcing services to create and maintain their products.

Why you should choose to outsource software development?

Outsourcing is a great option for the growth of companies because of the various critical reasons.

1. Saves Time and Delivers Faster

It takes less time to develop software when specialized people are dedicatedly working to develop your application. It speeds up the delivery time so that you can do product marketing much faster than your competitors. As timing or tight deadlines is a key, it has become more important than ever to overtake competitors with the right market entry at the right time.

Since software development is a lengthy process, it demands utmost care at every step. It’s a tough situation for sales & marketing departments looking to release new products in the market. This as a consequence puts the burden on the coders, thus preventing them from delivering their best performance. And which ultimately affects the whole team. In such scenarios, it’s better to hire a software development outsourcing company that will provide you with the quick programming help that’s totally worth it. It will help your organization focus on rapid collaborative efforts, timely delivering and adaptive planning. AAPNA deploys dedicated teams, which work as a commando unit, to seamlessly reduce your cost of owning IT by allowing you to focus on your core business.

2. Trims Down Operating Costs

You know that the function you perform, or the product you release will cost you a lot. However, software development outsourcing not only trims down the costs but reduces your workload as well. It provides access to top-notch experts at lower prices. Do you know your actual employee cost? According to a study, an in-house developer costs around 2.7 times the base salary. And if you also add the employment benefits, taxes, rent, resources and equipment, it could cost you a fortune.

But, on the other hand, outsourcing allows you to save a lot. As it is similar to an on-demand service, you know exactly what you need to spend on the basis of costs/hour or a labor/day for each outsourced developer. 

So, the cost is the first factor that most of the companies look into when outsourcing software development.

3. The Absence of In-house Expertise

The lack of in-house talent is one of the key drivers that restrict the growth of a business. Outsourcing brings you the opportunity to fill in the gaps according to the skill set they require. As per a Gartner report, there is a high IT talent shortage in the USA. The report suggests that by 2020, more than 1.4 million job openings for computer specialist. And it’s impossible for universities to fill this gap by even 30 percent.

Outsourcing will provide you with immediate access to a well-qualified workforce. It will allow you to expand your portfolio while playing an important role in the longevity of your company. Their market-related knowledge will completely remove your need for valuable investment in research. You also get an added advantage to improve the skills and scalability of your team. AAPNA has over a decade of experience in conceiving, architecting and delivering enterprise applications built upon standard platforms and frameworks. To outsource your requirement or know more please visit: https://www.aapnainfotech.com/enterprise-application-development-company/

4. Focus on Core Business Activities

Outsourcing allows your team to remain focused on more fundamental activities. This means you get the time to look upon the aspects that make you unique and distinguishes your company to stand ahead of its competitors. The software team you outsource will efficiently take care of the big chunks of the work that doesn’t belong to your core expertise. For example, if you do not have core expertise in programming, it makes no sense to perform this task in the house. This is because it will only lead to the wastage of your precious time and money that can be better located anywhere else. One of the effective ways to upgrade the standards of software project is through offshore software development

5. Flexibility

By outsourcing your needs, you save a huge amount of time that would be otherwise spent on training, hiring and recruiting employees for short duration projects. It gives you the flexibility to hire the developers possessing proficiency in technologies you want for a particular project. Moreover, unlike in-house team, you don’t need to pay outsourcing developers as per full-time job. You have to pay just for hours they work to finish certain tasks.

Connect with AAPNA Infotech, a custom software development company to know more about benefits of hiring offshore software development company

What Software Development Services can Your Company Outsource?

Whether you’re having issues with your codebase or simply want to get the best production-ready software with the safest and most efficient shipping, hiring a dedicated team of software engineers can make all the difference.

But is it okay to outsource everything, or should you seek software outsourcing for specific services? Here’s what you can delegate to an external firm:

• Enterprise Software Development
  A lot of companies today are turning to software development outsourcing to build their enterprise software. This is because they have an existing system in place and need software to manage their processes. Enterprise software development often seeks the solutions that would model the functioning of the organization and set the tone for how employees do or should do things. Once the software is obtained, it allows enterprises to improve efficiency, productivity, and functionality. Outsourcing the development of such enterprise software will ensure that the project delivers efficiency. It also enables companies to attain higher economic scales while focusing on their main competencies.
•   Software QA
  The SQA process is important because it helps you identify and solve issues before they become significant. It helps you work towards defect prevention, rather than defect detection. Defects are known to cost anywhere from 6-15 times more when fixed post-release than if they were fixed during the developmental stages. Software QA is crucial in every part of software development, right from determining requirements, and programming, to the final release. It aims to achieve quality end software. When you outsource SQA from a reliable development firm, it guarantees that whichever application your organization works on will attain the intended objective.
• Web Design and Development
  Outsourcing web design, development, and marketing is a great way for small businesses to establish a strong online presence — including a well-designed website that highlights your products or services. By working with an experienced software development outsourcing firm on a project-by-project basis, businesses can increase their efficiency. You also stand to enhance your business’ popularity, attractiveness, and overall effectiveness.
• Mobile App Development
  While mobile application development might be outsourced, the success of these applications depends heavily on how much is thought about before development begins. Understanding how much in-app purchases, social media integration, and so forth an app needs to be successful requires a clear understanding of consumer behavior. Something that can only come from upfront planning. If you don’t know the technicalities of mobile app development, software development outsourcing can save you a headache
• Game Development
  Outsourced game development isn’t only for big studios anymore. Today, lots of small developers overseas are providing high-quality services that rival the work of their North American and European counterparts. If you have a brilliant game idea but don’t know the technicalities of developing it, outsourcing the development to an experienced firm can get your project up and running to completion.
• AI and Robotics
  Today, so many firms have expressed interest in implementing AI and robotics in their solutions. AI developers can switch to outsourcing software development to other firms whether IT-based or not, to handle all their AI development needs. since learning robotics and AI can be intense, you can get a ready team to implement whatever idea you have.
• Virtual Reality (VR) development
  VR has widespread use today, from education, shopping, and entertainment to many other areas. If you have a VR solution you’d like to develop, you don’t have to waste time learning or recruiting an in-house team to build it for you. Many experienced outsourcing firms can carry out rendering, object scaling, head tracking, and sphere mapping to create lifelike 3D models

Challenges of Outsourcing Software Development

While outsourcing software development sounds like a powerful solution to all your problems, it isn’t always a soft process. There are challenges that you must be aware of so you’re prepared to tackle them beforehand or when they happen.

• Inability to list down all project details
  Whether you create the project specifications or the outsourced team does it for you, there will always be details that left out at the start. There are always going to be obstacles when starting. It’s hard to plan for all the problems that might come up, or predict how well things will go in the future.The solution to this is to ensure that you create additional cushion time for your project timeline. This will allow the outsourced development team to carry out tests or go engage users more. In some scenarios, developers can underestimate the given task, and providing additional caution time can give them the allowance to release the anxiety and pressure.
• Possible communication gaps
  Even the most prepared teams will sometimes face issues with communication breakdown. If you don’t know your requirements well and the outsourced team isn’t notified of the same, there could be possible challenges in implementing the project.If the communication channel and the management setup aren’t well synchronized, it will create huge communication gaps that affect the project. The best solution is to ensure that the project is managed through project management software with efficient collaboration features, such as Jira, Trello, Zoho, and Basecamp. That way, teams can easily communicate through instant chats and video calling,
• Project costs can change with project requirements
  As mentioned earlier, knowing all the requirements at once isn’t always possible. Project-based outsourcing can present lots of challenges. For one thing, there can be a lot of negotiations and back-and-forth to get the price and scope of a job just right.If your project does not have definite requirements, then you’re better off working with an software development outsourcing firm that uses the Agile development methodology. Additionally, they should be able to deliver a Minimum Viable Product (MVP) to allow you to use the software and make changes as per the requirements. With such a project, the cost of the project should include an estimated budget to implement the requirements.
• Security risks
  The issue of security is one of the biggest because you’ll be giving external parties access to your data, scope, and certain business secrets. That’s especially true if you don’t have control of the project workflow.
  As such, there’s a serious need to sign a robust NDA or work with white label contracts to avoid a data security breach. A non-disclosure agreement should list the repercussions of a breach and what should be done to counter the challenge. Also, there should be stringent data management protocols in place, detailing every aspect of data access and hierarchies necessary. The software development outsourcing must also be held to the letter to take caution and ensure that data breach doesn’t occur without their knowledge or negligence.
• The hidden costs factor
  Even when project-based models are used, there will always be hidden costs that you must bear. These are in the form of energy, time, and resources used in monitoring the project implementation by the outsourced firm. Monitoring is a must-do to ensure that the vendor sticks to the quality standards agreed upon and delivers according to the stipulated timelines.To counter this challenge, you can opt for the outsourcing software development team  to work together with your team at your premises. This way, you’ll eliminate the need to dig deeper into your pocket to pay for the additional costs. If teams work remotely, then ensure that the contract agreement with the outsourced firm mentions who will cover the hidden costs depending on where it is coming from. Since this is an aspect that might not be avoided entirely, you should also have a miscellaneous expenditure budget set aside for the project.
• Unexpected delays from the outsourced firm
  Delays can occur due to so many reasons, one of them is crashed systems. Even if the signed contract caters to such through financial compensation, there’s no denying that your entire project is stalled. You won’t be able to calculate the estimated losses incurred due to the delay.If the delays are due to changes in the requirements, you should find a software development outsourcing firm that will deliver a Minimum Viable Product (MVP) through agile methodology. This is especially important if you’re not certain about the project specifications .An MVP will deliver sufficient features to meet the needs of the project and allow you to use it and generate feedback for further improvements.

Common Software Development Outsourcing Models

When deciding how to start outsourcing development, you need to follow an outsourcing model to ensure the process achieves the required success. Normally, companies, both startups, and multinational enterprises rely on three main software development outsourcing models.

The model adopted will majorly depend on your project complexity, timeframe, budget, and your involvement level.

1. Staff augmentation

This is the simplest software outsourcing model. It involves your in-house team coordinating with the outsourced team to create the required software. This approach offers your staff a one-on-one contact with the outsourcing firm, where both teams work within your premises until the completion of the project.

This model is best suited for situations where you have an adept engineering team but with gaps in skills required. Also, if working on a task that requires specific skills that your team does not have, staff augmentation can fill the gap, allowing you to boost your efficiency.

Advantages of staff augmentation

• Reduced costs – Staff augmentation is cost-effective, allowing you to eliminate the need to hire more skilled personnel on top of your existing team. Depending on your agreement with the outsourced firm, you can pay them according to the time spent working, therefore avoiding expenditures on taxes and benefits. Additionally, you’ll eliminate the need to train your in-house team as they can learn from the outsourced firm.
• Better project control – staff augmentation gives you total control of the project at every step of the way. You can directly monitor how things are being done therefore putting you in charge of the quality of the software being built.Plus, you’ll be able to position your team at any required point to be vigilant and avoid potential security and privacy risks associated with dedicated outsourcing.
• More flexibility – It allows you to be highly flexible and scalable. That way, you can handle projects of any magnitude without turning down your customers’ requests. You’ll be able to scale the teams according to the available demand.

2. Dedicated team outsourcing

This outsourcing software development model puts the outsourced firm’s team with more talent in charge of the entire development process. They will provide the project management structure, specific tasks allocation, and workflow monitoring, among others.

This model is quite powerful, but it also requires you to have an in-house team of experts who understand what’s required and the processes involved. You’re better off with a dedicated model if you also want assistance on a specific task.

Advantages of dedicated team outsourcing

• Benefit fully from an experienced team – One of the benefits of this model is that your project will benefit a lot from a team that is highly experienced. That way, you won’t limit them, therefore allowing the outsourced team to deliver their best.
• Economically viable – Dedicated teams work remotely, therefore eliminating the need to make changes to your premises to accommodate them. You won’t be involved with administration, which in most cases is hectic.
• Faster turnaround time – Since the outsourcing isn’t being monitored to the core, their workflow and speed are usually higher. You’ll only need to assign a few of your staff to coordinate with the outsourced firm and give you status updates, therefore allowing the project to flow smoothly.

3.Project-based outsourcing model

Here, the outsourced firm takes full control of the entire project, starting with defining specifications, task allocation, timeframe monitoring, to quality testing. Your agreement with the firm is that they will handle the project at a fixed budget and fee. The outsourced firm will be mandated to deliver the project exactly how you want it according to the defined timeframes.

Project-based models are suitable in situations where the project is simple, well structured, and is highly unlikely to undergo any change. As such, your outsourced firm will work on the specifications without requiring your input or guidance.  If your team is not a software development firm, this approach is the best to choose.

Advantages of the project-based model

This approach has the benefit of saving you from incurring extra costs outside what you had budgeted for. As such, the outsourced firm has the responsibility to ensure that the whole project fits the given contract cost.

Whichever model you choose to work with, outsourcing software development saves you a lot of headaches. None of the models is inefficient as you’ll only choose one that best fits your needs.

Common Process of Software Development

Whether you’re a professional software development firm or not, it’s always prudent to understand the software development process before outsourcing. Today, the most used methodology is the Agile software development process.

The agile model refers to a collection of development methodologies following an iterative strategy. In this approach, the requirements and developed solutions evolve as the development team and stakeholders collaborate.

Here are the key stages of the agile model you need to be conversant with:

1. Planning

You as the owner, plans the requirements and project scope, which will act as a foundation for the software development. You may also engage the software development outsourcing contracted to help you with the planning phase, but ensure that product specialists are also part of the planning.

2.Inception

After outlining the requirements, the next phase involves building the team that will work on the project. You’ll check the availability and skills of your team whether they best suit the project. If not, you’ll have to outsource the expertise.

3.Construction/Iteration

At this phase, the real coding begins. It’s the most demanding and has a lot of input into developing the prototype of the software. The development teams, UX designers, front-end developers, and backend developers will combine the requirements and user feedback to build the software. This phase will greatly benefit with outsourcing software development if you’re not an software development firm.

4.Release and QA

At this phase, the software is ready to be released but quality assurance tests must be done to ascertain the product readiness. Any potential bugs identified are sorted out and user training conducted. Once all these activities are complete, the product will be ready for deployment.

The outsourcing software development team will coordinate with the in-house team to ensure everything is set for production.

5.Maintenance

After deployment and users begin using the system, the maintenance stage kicks in. the development team will offer continuous support to ensure everything is running as intended. New bugs identified will also be fixed during this phase.
Users can also receive additional training to ensure they understand how the product works and can guide fellow users.

6.Retirement

Every software will eventually become obsolete at some point and will need to be laid to rest.  When another software is introduced because the organization’s operations have changed, the existing system will be retired.

Users will be notified accordingly about the retirement so they can prepare. If a replacement system already exists, migration of users to the new system will also take place. The software development outsourcing team will provide any extra support needed and finally phase out the system completely.

Choosing a Competent Software Development Outsourcing Firm

With so many outsourcing development firms in the market, it can be daunting to pick the right firm to work with. But with proper guidance on what to look for and do, you can easily pick a qualified and experienced software outsourcing firm to handle any project for you.

Here are the three key steps to follow when choosing an outsourcing firm:

a. What are your requirements?

Knowing and understanding your software requirements will help you to determine whether the outsourced partner understands what is to be implemented. If you don’t know or understand your needs, it’ll be difficult to grill any software developer.

As such, you have to evaluate each problem and analyze the possible solutions before reaching out to an outsourcing firm. If you have no software development experience to determine your requirements, it’s best to first engage a software requirements analyst beforehand.

b. How Capable Is Your In-house Team?

Before outsourcing software development, you must decide what expertise you need. The capabilities of your in-house team are important to consider since their skills can also help slash your outsourcing costs. Once you know the capabilities of your team, you can create a project specification that describes what the product should do and how the work should be done.

c. How competent is the outsourcing firm?

It is important to do proper research before hiring an outsourcing software development firm. It’s not just about looking for the most affordable option or the highest number of recommendations online. Before you make the decision, ask yourself what it is you want from your developer. What type of experience do they have? Are they interested in growing and learning? How good are they at working with other people? Are they skilled in the languages you are using?

One way of answering these questions is by looking at the case studies on their websites. If possible, request referrals to find out about their satisfaction rate working with the firm.

d. Will you manage the project yourself?

The success of any project depends on how effective the management process is. While using software development outsourcing, it’s important to oversee the management process. Even if not, you should ensure that the outsourcing firm uses project management software that you are part of to know exactly what is happening.

A good project management software, such as Basecamp, Jira, or Trello can help your team and the outsourced team collaborates effectively so everyone is on the same page.  The outsourcing firm should assign a project manager and respective team leaders so that milestones are met and everyone achieves their mandate on time. The main determinant of success in project management is how effective is the communication process.

Summary

Whether you’re a full-fledged software development firm, a startup or simply need to build a custom enterprise solution, you can benefit immensely from outsourcing software development. The approach eliminates the costly approach of keeping an in-house team with the required software development technology.

If your product line is entirely different from software, you can outsource a software development firm to build an app, implement AI, or develop an enterprise system. For software development firms just getting started, software development outsourcing eliminates the need to recruit experts when you land on a demanding project. Whatever your need for outsourcing is, the success of the project will greatly depend on the competence of the hired firm and how well the project is managed.

Check out our related articles on successful outsourcing.

Offshore Software Development	Challenges of outsourcing