10 Reasons Why Top Software Companies Are Outsourcing Software Development

10 Reasons Why Top Software Companies Are Outsourcing Software Development

  • Many software companies in the US are now outsourcing their software development, which is the practice of delegating your company's software functions to third party contractors or outside agencies that either do it better or more cost efficiently. Smart choices in this space can provide benefits such as lower labor costs, improved quality, faster productions, or innovations to products and services and avoiding the hiring process. If companies decide to go outside the US and engage firms or individuals beyond national boundaries, it is often referred to as offshoring. While there are pros and cons to outsourcing and offshoring, these options have, without question, a direct impact on profitability and have become a common feature in business and tech strategies. If implemented effectively, they can be a key component of success in many top software companies or divisions. Here are 10 reasons why:

    1. Reduced Cost

    One of the greatest benefits is lowering the labor and operational expenses of development. Teams with broader skillsets and more experienced professionals can deliver in shorter timeframes and without the overhead of in-house resources and extensive re-coding. Proven methodologies like Agile development are already in place and efficiently executed for a streamlined process. Professional developers can provide outcomes that minimize effort and lower cost. A full team of experienced developers will accomplish more in any given time frame than a limited team of in-house programmers that have other obligations.

    2. Preserve Focus

    Many technology companies choose to outsource development so that their teams can remain focused on core business functions like marketing and customer service. The more time-consuming processes that can be outsourced, the more business teams can focus on growth. Most small-to-medium companies, and even large enterprises, find it increasingly difficult to keep up with technical change and consumer expectations. Outsourced development makes this much easier with no loss of emphasis in developing core business competencies. Well-architected software will provide greater flexibility, potential, and accuracy to you and your customers.

    3. Wider Talent Pool

    Rather than being restricted to local employees or contractors, offshoring allows companies to utilize the skills of software developers anywhere in the world. Successful third-party developers will already have the best talent and organization for providing quality results in a global marketplace. Some companies spend a great deal of money on recruiting, training, and retention of highly skilled programmers. This isn't a good strategy if there isn't a continuing need. By contracting for development services, you get the best talent available without a long-term investment.

    4. Conservation of Resources

    One of the benefits of outsourcing software development is that company resources can be fully committed to other operations or initiatives that are done affordably on-site. Even software companies may already be engaged with high-priority projects and may choose to outsource other projects to external providers when they don't have the resources to fulfill them. Through hiring a third-party that already has the tools and talent, you can budget for development without spending on new software tools, enhancement of infrastructure, or increased payroll and benefit expenses.

    5. Greater Resources

    Many small companies won't have the systems or IT skills for effective development. It might require a costly investment in tools and personnel to even get started and with no guarantee of deadlines or results. By working with a reputable developer, however, you are assured of delivery with no concerns about budgeting for the appropriate tools and talent. A leading software development company such as Venture Aviator is already utilizing a global team of developers and project managers to meet the growing demands of modern business.

    6. Investment

    The money saved by outsourcing software projects can be put to other uses, such as external investments or as capital funds. For growing software programming companies, the failure to realize and leverage savings wherever possible is equivalent to waste. It's bad for business. Offshoring practices provide access to remote teams from foreign markets in Eastern Europe or Asia where the labor costs are lower. This means even greater savings to lower your investment and grow your buffer capital for business operations.

    7. Easier Management

    Delegating complex responsibilities like software development to external parties frees companies from the burdens of tracking and controlling progress. They can realize all the benefits with none of the challenges and obstacles. It also frees up often over-burdened in-house IT teams from devoting their time and concentration to prolonged development projects. Instead, they can continue to support other issues like network maintenance, cyber security, business continuity, and end-user support that are critical to smooth company operations every day.

    8. Risk Assessment

    Software outsourcing to a capable development firm is a means for reducing risk. This is one of the main reasons companies pursue this option. The outside agency takes responsibility for delivering a quality product to your specifications, so producing software that adds value to your business is a low-risk proposition. Knowledgeable, dedicated developers will also assume accountability and ensure that your digital systems remain compliant with increasing government regulations. This helps to mitigate the risks of fines or even possible lawsuits in the event that customer or patient records are mismanaged or exposed through poor design.

    9. Reengineering

    As Roy Malkin, President of a leading software development company, Venture Aviator, says: "There's something special that happens when developers and innovators come together around a compelling vision." Reengineering enables software companies to refactor existing code for quick deployment of changes providing new features or incorporating innovative functions and designs. Outsourcing to a professional software development company helps businesses collaborate and leverage the concept of reengineering for affecting even significant changes with faster time-to-market.

    10. Market Expansion

    One of the top reasons companies choose to create proprietary software is to expand into new markets or to provide additional services to their customers. Solutions like free or affordable mobile apps improve brand recognition and customer loyalty while bringing services to customers in a convenient and easily accessible format. Experts in website development and design will also help grow your internet presence by incorporating the latest technologies while engineering for performance, security, stability, SEO, and other critical aspects of the online experience.

    Business leaders choose software outsourcing and offshoring for a variety of reasons and for any scope of project. Costs and requirements will vary widely, but the benefits are clear among most of the world's top companies. Connecting with audiences, saving money, and providing greater value to consumers and shareholders are all worthwhile and realistic objectives. With some thoughtful planning and selection of the right external agency to meet your needs, your company is bound to experience improvement.