Google and Apple may be among the world’s biggest companies, regularly appearing near the top of Fortune 500 lists1, but they share something in common with countless smaller businesses when it comes to software development. Despite being tech leaders, they are increasingly outsourcing more of their development and maintenance projects to external providers that specialize in such areas.
In the words of one top executive whose tech services firm manages software projects for Google: “(They) see greater value in outsourcing non-core parts of the business as it is more cost-effective.”2 Endorsements do not come much bigger and reinforce why the software outsourcing industry is expected to reach $430 billion this year3 and soar to a total value of more than $1 trillion by 20304.
With the digital revolution showing no signs of slowing down, software development is increasingly pivotal to business success and outsourcing is helping many businesses not only keep pace with but stay ahead of their competitors.
What is software development outsourcing?
Software development outsourcing is a business strategy that sees such assignments undertaken by external experts rather than using in-house resources. It can involve delegating specific tasks or assigning an entire project to be completed by an individual or team. Along with supporting the ambitions of large corporations, outsourcing software development has been a game-changer for many small and medium-sized businesses.
Five reasons to outsource software development
In a world where technology is forever evolving, outsourcing offers many benefits to businesses when tackling their software development requirements.
- Access to talent: with the U.S. Labor Department estimating the global shortage of software engineers to reach 85 million by 20305, it is reassuring to know outsourcing providers are continuing to cultivate talent pools filled with highly qualified candidates. Offshore destinations such as the Philippines are home to many experienced and knowledgeable software developers who are skilled in the common tools and languages used to support back-end and front-end development. The recent boom in remote and hybrid work has also broken down the geographic barriers that for too long stopped Western businesses from looking outside their own four walls for talent.
- Faster delivery: speed is of the essence when it comes to software development but that is not always an option for businesses juggling other priorities. Outsourcing can rapidly accelerate the process by avoiding the need to recruit and onboard staff, and engaging third-party employees who can focus solely on the assigned project. The process of establishing an entire outsourced software team can be equal or less than how long it takes to hire a single in-house developer and, as the saying goes, time is money.
- Scalability: it is not uncommon for software development projects to encounter variables that make the process more expensive, longer, cheaper or shorter than originally planned. Whether urgently needing more developers to complete a project or having underutilized workers when one wraps up early, outsourcing provides businesses with the flexibility to scale with maximum efficiency and for minimal cost. Looking offshore is also an excellent way to complement in-house development teams with external talent when demand requires.
- Focus on core business: history is littered with tales of entrepreneurs and small business owners who had a great idea but soon found themselves diverting their limited time and resources to managing the development of websites, apps and other digital solutions. Outsourcing software development puts those tasks firmly in the hands of experts and allows businesses to focus on their core products and key activities such as brand building and customer service. Likewise, handing time-consuming and repetitive software tasks to offshore staff means in-house developers can dedicate their time to more valuable and rewarding work.
- Cost savings: no conversation about outsourcing is complete without highlighting the number one reason businesses choose the strategy. Partnering with a quality provider in a low-cost economy such as the Philippines can reduce labor costs by up to 70%, with factors such as onboarding, training, equipment and office space no longer on your books. Better still, these savings can allow you to bring more people on to a project to deliver faster results and, in turn, more financial gains.
Summary
The modern tech landscape has many hurdles for businesses to overcome. From skills shortages and budget constraints to ever-evolving technologies, there is a real risk of businesses falling behind on their software development projects or simply putting them in the too-hard basket. There is another option though and it starts with opening one’s eyes to the power of outsourcing and tapping into the benefits that are gained by linking with a quality offshore partner who can source, recruit and manage highly skilled and experienced software developers.
Many organizations have faced the predicament of needing to grow a critical area of its business but being hamstrung by the cost of doing so locally. Learn how a global software company utilized outsourcing to provide 24/7 technical support coverage.
