Why do we need to choose software development outsourcing instead of in-house?  Key reasons to outsource software development

choose software development outsourcing instead of in-house
Dec 20
Read 6 Min

Companies of all sizes share a common goal. They all seek (an easy) way to succeed & conquer the market. Many of them face the same puzzle on this path – should they outsource or hire professionals internally? Well, admittedly, both options offer some perks. However, now is the time to choose software development outsourcing instead of in-house. That’s right: 92% of the US companies had outsourced some of their IT roles in the past few years. And for a good reason! Now, get ready for a few proven benefits that will help you decide to work with a reliable BPO company and boost your business in no time! 

Learn the basic terms: What is in-house and outsourcing

There are two equally widespread and super efficacious practices to build a software product: in-house or insourcing & outsourcing. The first one entails using the tech proficiency you have within your company. The second alternative is to pick a dependable dev team outside your business. Outsourced tech teams take charge of the assignments from a location outside of your typical office space. 

In addition, there is a different type of agreement involved. Lastly, there’s another possibility for you. You could team up with a freelance software engineer and assign some of the duties to them.  

Which one will work best for you? Let’s have a look at the perks you’d get. 

Why is outsourcing better than in-house? [And how to make it work]

There’s a never-ending dilemma when it comes to software development: in-house vs. outsourcing, a tale as old as time. Or at least as old as the 4th industrial revolution and a massive ongoing tech boom. So, it’s crucial to grasp the pros and cons of outsourcing first. Yes, there are a few liabilities that could pop up and slow down or weaken your endeavor. But there are ways to prevent these negative outcomes from happening in the first place! How so? Well, just be careful and do lots of research. 

Selecting a suitable third-party tech team isn’t all easy-peasy. But it will secure a smooth collaboration and awesome results. Follow these steps:

  • Read the comments, reviews, and testimonials,
  • Have a close look at their portfolio and conduct meticulous screenings,
  • Pay attention to the products they have developed, including their design, responsibility, and more,
  • Demand a word or two from previous clients,
  • Be transparent and discuss the finances, scope of work, and deadlines ASAP,
  • Compose an agreement that suits both of your needs.

Lastly, make the best call by taking a test ride. Give your external helpers a small chunk of work to finalize. First, see if they’ll get on with it timely. Then, watch how dedicated they are. Here’s a great thing about working with a BPO company: there are no miss-hires. If you do your homework, they will undoubtedly do theirs. 

Astonishing advantages of outsourcing

Innumerable businesses choose to outsource to get the best results – fast! How so? Well, there are countless reasons to hire a skilled third-party team. These are the main benefits of outsourcing you must keep in mind: 

  • Gaining access to more talents worldwide and relying on their valuable skills and industry knowledge,
  • Cutting down on hiring and operational costs,
  • Saving a lot of time from setting up a team, through building an amazing product and launching it,
  • Boosting productivity and lowering churn rate
  • Speeding up the drill by covering various areas and time zones. 

These are some of the key advantages that you’d get if you find the most fitting BPO company. With the right partner, everything will be a smooth sale. Now, let’s see some setbacks and challenges you might face when you choose to outsource. 

Downsides of outsourcing to keep in mind

According to Statista, more than 45% of ITO took place because of a lack of relevant tech skills within a team. So, it’s true: being determined to outsource certain job functions can be more than helpful. Still, there could be a few drawbacks to beware of: 

  • A lack of communication due to a physical distance, unclear agenda, or differences in time zones, 
  • Misunderstandings that take a while to be resolved,
  • A decrease in quality if you don’t choose a BPO partner very wisely,
  • Stretched deadlines and lateness,
  • The inability to monitor all the processes,
  • Potential security risks. 

These are some of the primary risks and challenges a business can encounter when teaming up with external partners. Nevertheless, the good news is that most of these problems won’t happen if you pick an ally carefully. 

Know the three key reasons: Why should you outsource software development?

So, why do we need to choose software development outsourcing instead of in-house? It’s simple. This business method is more efficient, practical, and cost-effective. See for yourself. Here’s a detailed comparison of these two practices. 

Software development outsourcing will reduce turnover rates and hiring mistakes

Company culture is a big deal for many. No arguments here – it should be that way. Now, hold on to that fact for a while. Let’s have a look at a stat to remember. According to DevKillers, it takes approximately 43 days to hire a new and qualified developer. In the meantime, a company could lose over $20k. So, once you do hire an in-house pro, you’d probably be ecstatic. But what if it turns out to be a mistake? What if they fail to deliver or come to be brilliant jerks? Will you suffer the consequences and hope for a miracle, or start the whole expensive and tiring process from scratch? Neither of these options seems appealing, right? Well, that’s exactly why working with a BPO company pays off. No missteps and miscalculations in hiring = no drama. 

You will gain super important tech skills in a snap when 

So, when speaking of in-house software development vs. outsourcing, we need to count in several variables. One of them is the hiring process. Anyone who hired a developer or any tech professional in the past knows how lengthy and costly this process can get. Sourcing can be tricky, and then several rounds of interviews await. Lastly, once they accept the job offer, you will have to take some more time to onboard them. And it’s not just about the time. Employee growth and training need to be consistent. Sure, the onboarding takes around 90 days. But what happens after? Your staff members need to stay up-to-date. That means they will need more education, courses, conferences, meetup, tutorials, and whatnot. And that means more resources. 

But, with a BPO company, all of these pieces of training will be their internal objective. What do you get? You get a superbly qualified dev team in charge of their own knowledge, learning opportunities, and career development. You can just relax and enjoy the newly obtained skill sets that will drive the outcomes you hoped for. 

Outsourcing cuts costs & saves time 

Outsourcing software development brings numerous benefits. And even though outsourcing has evolved and started to grant way more than cost-cutting opportunities, this particular advantage is still it. Once again – we are back to hiring. It all starts right there. Did you care to calculate the cost of an empty seat? If not, good for you, because these expenses can quickly skyrocket! Then, if you have some in-house tech experts, they will need to take their time to assess the skills of potential candidates. Also, when it comes to senior roles, the number of qualified applicants is oh so teeny. 

Then, the whole drama is behind you. You’ve found the perfect match. And they started working with you. Here are more costs to brace yourself for: employment taxes, employee benefits, the rent for the office, equipment, + non-billable hours like meetings, and more. How costly does it all sound? Well, just about enough to make you consider to outsource, right? 

Famous companies that outsource tech roles

Many companies use BPO services to get the best results. In fact, outsourcing is no longer a practice made for the titans. On the contrary, more than one-third of small businesses outsource parts of their work. That way, they can avoid burning huge amounts of cash instantly. Also, they outsource to shorten the time-to-market, become more efficient, and outwit the competition. 

Now, what about the gigantic corporations and their experiences with third-party techies? Here’s a list of those who have done it – and hit the jackpot: 

  • Alibaba
  • Apple
  • WhatsApp
  • Skype
  • Slack
  • GitHub
  • MySQL

And even Google! So, regardless of the niche you chose and the tech stack you plan to use, handing parts of your work over to skilled external collaborators is definitely a smart choice! 

Know why you should choose software development outsourcing instead of in-house

So, now you’ve seen why you need to choose software development outsourcing instead of in-house. The results you can get are astonishing! Just set the aims, assess your needs, establish a precise scope of work, and pick a tech stack. Then, do the research. And here’s a good place to start. A reputable and skilled BPO company is right here. 

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Tatjana Zotovic