Software outsourcing has blossomed primarily because it yields significant benefits in operational cost reduction as compared to similar work done in-house. Though it is a very well adopted measure in recent times, there are challenges of cultural and language barriers that make delivery models for global software development difficult to execute.
In its simplest definition, software outsourcing is an arrangement where any organisation can choose to hire an external service provider for effective planning and management of all the aspects of a software development project, rather than getting the job done by in-house developers. It is a practice by which the control of a project is entrusted to an external agency who are qualified and experienced to handle the task.
The decision of software outsourcing is hugely impacted by the pros and cons of outsourcing. This blog attempts to explore some of the benefits and downsides of outsourcing.
Pros of software development outsourcing
1. Reduction in overhead and development cost
Reduced development cost is one of the primary reasons that lead an organization to outsource a software development project. Reduced expenses help them to stay within budget, which in turn helps in business growth and scalability. Also, hiring a third party vendor helps an organization to save on various employee benefit costs like insurance, training etc., which accumulates as labour costs. The cost savings can be utilized for providing a competitive rate for the best outsourced talent in the industry.
2. Flexible contract
The customer organization has the flexibility to engage with the outsourcing agency as and when necessary. Since this is not a permanent employment, there are limited legal obligations for a long term contract in terms of engagement or payments. This arrangement of software outsourcing is mainly beneficial if compared to hiring permanent employees where labour costs cannot be avoided even if their expertise may not be required after completion of the project. Additionally, the flexibility of working remotely adds the benefit of hiring talents from all over the globe.
3. Improve business with emerging technologies
Engaging with a remote software development team brings a whole range of opportunities backed by new technologies such as Artificial Intelligence, Blockchain technology and many more to make the most out of knowledge and best practice transfer. Easy and fast access to IT talent pool allows organizations, especially the non-IT industry to focus their time on other important revenue generating processes.
4. Reduced product development time
Another benefit of working with a hired software outsourcing team is the experience pool which is well acquainted with the tools and technologies applicable to the development process. Also, a considerable amount of time is saved which would otherwise be spent on hiring and training process of in-house developers.
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1. Unsatisfactory quality standards
Though not very rampant, sometimes the provocation of hiring labour at reduced cost might have consequences of compromised quality product. Additionally, the reduced scope of direct management of the project development and personnel increases the risk of problem identification.
2. Barriers of language and culture
Working with remote software outsourcing teams can pose challenges due to language and cultural boundaries. Besides, difference in time zones can be a hurdle in maintaining effective communication and feedback.
3. Security
Modern organizations consider their data, consisting of confidential information, to be an asset of high value. Providing access to that valuable data to a third party involves many risks to the business. Hence, it is very critical for the client organization to consider the detailed data security risks and hire the right vendor who abides by data security laws and regulations.
Taking advantage of technology and sustainable business growth are the main objectives of any business. There can be many models that a client organization may choose to engage with a software outsourcing agency. Irrespective of the model chosen, new age software development vendors have the core skills and competencies to handle and deliver projects of any scale and type on time and within budget.
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