The software outsourcing industry has taken off in recent years primarily because it is a cost-effective way for companies to access individualized software development talent without needing expensive office space, hardware equipment, and on-site managers. However, the latest trends show that it will continue to grow more rapidly in Asia and Western Europe as the industry embraces a more agile approach to software development.
If you’re looking for bespoke Software Development Solutions to get work done outside your company, keep these factors in mind before hiring someone overseas or outsourcing work here at home. Let’s get started with some basics, and it will help you figure out everything you need to know about software outsourcing and its future.
What is Software Outsourcing?
There are many different ways to define the term “software outsourcing.” Still, it is generally outsourcing software development projects from a company’s internal development team (dev team) to an external team that is often built on a global network of software developers. Another way to look at this is as the “globalisation” of software development, but more later.
On the surface, this process sounds simple: companies outsource software development to third-party vendors because they can’t afford to do it themselves and find the need for low-cost outsourced services in their business operations. But this model has more to it and much more complexity.
Let’s do a quick turn-around: outsourcing is transferring work, responsibilities, and risk to a vendor that performs services on behalf of another party. Outsourcing allows a company to gain access to top-tier talent with specialized expertise that is not easily obtainable in-house while still retaining enough control over its software development processes to ensure quality and stability. This reduces the risk of problems being caught too late, which can seriously harm the company.
What are the best ways to outsource software development?
So you don’t think you need to hire someone else to do your software development work, but this is a severe mistake. Regarding outsourcing, several factors are involved in ensuring the relationship is flourishing. For starters, a company has to know the software development process inside and out to adequately describe the scope of the task and understand what parts of their business may be impacted by outsourcing.
Even if you have an experienced software developer on board, you will want to bring in an outside team for at least part of your next project. The adage “too many cooks in the kitchen” applies here: Keep your software developers focused on what they do best.
Take care of communication: Outsource software development is a two-way street, and much of the assignment’s success depends on how regularly you and your vendor communicate. It’s straightforward for a project to get out of hand if you aren’t careful, so work with your vendor to ensure each person knows the objectives and boundaries of their role and how their contributions affect the larger goals.
It’s in everyone’s best interest for this process to be smooth, so communication must be at the top of your list regarding outsourcing software development.
Detailed feedback: When you hire Custom Software Development Agency for an outsourcing project, you may be surprised at how many people will be involved with the assignment. It’s essential to ensure that everyone who participates in your project understands how their contributions fit into the enormous scope of the task.
This includes your internal team and anyone you bring on during the process. Feedback is critical because it keeps communication channels open and helps everyone stay on task even if they’re working on separate project elements.
Is software development outsourcing right for my business?
Are you looking to outsource Software Development or other business aspects of your company? If so, you may want to consider the following points before agreeing to any specific arrangements with an outsourcing company:
- Do you have a solid product roadmap for the coming months and quarters? Without it, you may rely on an external vendor for features that may not make it into your app.
- How do you define success? As mentioned above, communication is critical, but you must be sure that all your team members (and vendors) are on equal footing. If one person doesn’t understand how their work fits into the larger goal, then confusion and missed deadlines may ensue.
- How likely will someone else be hired to replace your current team? In another work assignment, if you were to hire a replacement, how many months would it take for that person to learn enough about your existing processes and company goals to be effective in their role?
- Is the cost of outsourcing a small fraction of your time and budget and not adding high additional cost to your bottom line? If so, then you have found the right place to start.
What are the benefits of software outsourcing?
You’ll save time and money if Outsource Software Development is the solution you’re looking for, but there may be other reasons you decide to outsource. Let’s look at some of the possible benefits of outsourcing software development:
Time: Project management can become very complex as your software development team grows and plateaus. You will spend more effort on the projects themselves and less on other company goals. Outsourcing will take some of this burden off your staff so that you can focus on more critical aspects of your business because it will be more straightforward to manage. This could reduce costs in many ways because you will not need to hire people for tasks that are not important.
Quality: With outsourced services, you can bring in experts with the necessary skill sets to ensure quality over time. This allows your in-house team to focus on bigger-picture goals rather than the fine details associated with each project.
Resources: Outsourcing software development services will allow you to bring in an expert team to take over the job without bringing full-time employees into your company. In other words, you can fill gaps in your team without hiring full-time staff members.
Technology: Outsourced Software Development will also give you access to new or emerging technologies that may not be available to your local team or company. This opens up many possibilities for your business because of the advantage it may give you over other companies in the area.
What do you need to know before outsourcing software development?
Before you start outsourcing your software development, you should go through a checklist that will help to make sure that you stay on budget and that the quality remains high. Here is what it should include:
Verify your requirements document: is it thorough? Is it clear? Are any gaps or unknowns in the requirements that need to be explained beforehand? The more information you have, the better.
Don’t forget about legal agreements: What are all the terms involved in outsourcing? You want to ensure that anything covered in the contract is clearly stated. This will help avoid unexpected costs and ensure that all your goals are met.
Review the vendor’s portfolio: Before starting working with a new service provider, it’s a good idea to look at their portfolio. See what they have done before and how they have satisfied other clients. This will give you an idea of who you should be working with.
Check their references: Get to know their past clients and ensure they have not done anything illegal. You don’t want to bring a company into your business that has done something that could come back to bite you later.
The final step is to check the budget: not only will this help you to understand how much you need for your software project, but it will also allow you to see what your potential vendor can provide within your budget range.
What types of software development outsourcing are there?
There are several different strategies that you can use when outsourcing software development services. Below, we’ll discuss some of the most common methods of software development outsourcing:
Offshore Outsourcing / International Outsourcing
Remote Offshore Software Development
What is the future of software outsourcing?
According to GrandViewResearch, the global IT services market (in-house and third-party) is expected to be worth $715.93 billion in 2020. In 2020, the global IT Outsourcing (ITO) market was worth $556.67 billion, accounting for 77.75 percent of the total market.
The CARG for the IT services market is estimated to be 8.4 percent, while the CARG for the ITO market is 7.7 percent. The IT services sector is expected to be worth approximately $1,070.28 billion by 2025, with the ITO market valued at roughly $806.63 billion. That would still be more than 75% (75.37%) of the total IT services market.
Software Outsourcing is here to stay. However, the technology industry is expanding rapidly, and as a result, these companies are trying to further streamline their processes by looking to outsource their software development. This is only likely to get more prominent over the next decade.
The Future of Software Outsourcing is promising. The Software Development process is going through a revolution with the emergence of Agile Methodologies and innovative Players. With the advancement in technology, it’s crucial to leverage the best available tools and methodologies to facilitate faster development cycles, continuous integration, and continuous delivery, leading to higher levels of quality software development.
However, the process is still far from optimized, and there is a long way to go for the industry to succeed.
What are the best countries to outsource software to?
You can hire the Best Software Developers by outsourcing from countries with low labor costs. But which countries are best for outsourcing software development? Various factors, such as health care, education, infrastructure, and taxes, will influence your decision. Below we discuss 3 of the Best countries for outsourcing software development.
India: India is the leading country in the cost of outsourcing IT services at a globally affordable level with over 300 million highly skilled, English-speaking employees and an extremely well-developed system and infrastructure. It is a country full of intelligent, hardworking individuals with a robust service-oriented mindset and close ties to the global economy.
India is leading the pack for software outsourcing platforms with the most highly skilled technical professionals available. Unfortunately, the cost of operations there is meager, partly due to India’s living standard has increased significantly within the past decade.
Philippines: If you want to outsource software development services but want a more stable environment, you should consider outsourcing to the Philippines. Also known as “The Pearl Of Asia,” this island nation offers many international businesses outsourced services, including software development.
Labor costs are low, and English is spoken nationwide, making communication and training easier for foreign companies. Outsource software development services in the Philippines for one of the most developed outsourcing options available.
Vietnam: Vietnam’s economy has dramatically improved over the past decade, including its outsourcing sector. This makes it an excellent option for companies exporting software development services abroad to grow their company export revenue through marketing and technology.
Vietnam is a fascinating country with great potential to grow its industry and challenging but exciting opportunities to outsource software development services in this South-East Asian market.
Russia: Software development outsourcing in Russia is a growing market. Russia has an economy that is still strong and developing as well as an incredibly well-educated workforce. Over the coming years, software development outsourcing in Russia will continue to grow.
Many companies are experimenting with this option while using Russian developers. However, you can try to benefit from this growing market by trying to outsource your software development projects in the future.
Germany: If you want to outsource your software development services but do not want to deal with high labor costs and an unstable political climate, you should consider Germany a good option for your business’s expansion.
Germany has a well-educated workforce, a stable economy, and jobs that are not being taken away from the workforce by outsourcing. So suppose you want to outsource software development services in Germany. In that case, there is a good chance you will succeed as this is one of the most popular outsourcing locations for software development services.
China: China has a huge market for software development outsourcing, and you can use this vast potential to expand your business’s market abroad. Pioneering technology companies such as Huawei, Xiaomi, and Suntech are all based in China, so they have an advantage when outsourcing software development projects.
When outsourcing software development services in China, you must consider your current and future needs. If you are interested in this option, you will want to contact outsourcing companies for further information about starting an agreement.
Poland: Outsourcing software development services in Poland has been top-rated among American companies. It is one of the most highly developed outsourcing platforms, with a well-educated workforce available at a lower cost than in other Western countries.
How much does it cost to outsource software development?
Hiring a software outsourcing company from the best Software Outsourcing Industry is an investment. The cost of outsourcing software development services depends on the company’s location, type of project, and current market demand for outsourced activities.
Two main factors will determine how much it will cost to outsource software development services. First, before attempting to hire an outsourcing company for your next software development project, you need to understand these factors.
Location: Where is the software outsourcing company located? It costs more to hire companies in developed economies like the USA or European countries because these economies have a high regional cost for things such as insurance, infrastructure, education, and healthcare, which all add up when hiring external companies.
Project Complexity: There is no way to predict the project complexity without a firm idea of what you are trying to accomplish. The start-up costs for software outsourcing companies can vary greatly.
You need to understand that there are many types of software outsourcing projects, and each one requires a different level of support from the software outsourcer. Try not to underestimate the project costs, as many more costs can arise while working with an outsourced enterprise.
Other factors contributing to costs include:
Contractual framework agreements: This is the main factor contributing to the cost of outsourcing software development services. Who will be in charge of monitoring the project throughout its life cycle?
What are your quality standards required for the project? What is your deadline for the project?
We offer exceptional quality standards. To deliver quality, we follow the process.
Requirements Analysis: If you have already developed the requirements, it is in your interest to contact us, and we will analyze your needs and provide recommendations.
Execution of the job: We are a team of developers, quality specialists, and project managers who will help you implement software according to your expectations. To improve our work processes in the most efficient way, we are constantly reviewing the design process and software code improvement methods.
Quality Control: Our development team works with continuous feedback from customers during all stages of project implementation. All development activities are monitored and controlled to ensure the timely delivery of high-quality products.
All our developers have passed exams to ensure quality, permanent growth, and constant improvement of our quality standards. We are a comprehensive outsourcing service provider company, and we are constantly looking for talented software developers, managers, and project and software managers who want to develop their business or work with us as an outsourcer.
The deadline of the project depends on the following factors:
The complexity of the project: A complex project is more difficult to implement than a simple project. As a result, the project takes more time to complete. If you need to complete your software quickly, additional charges (Rush Fees) will be added for increased support.
The efficiency of the team: The efficiency of our teams is one of our main strengths. Our top priority is meeting our customer’s needs and expectations within scheduled deadlines and budgets.
Technology Stack: We have the necessary knowledge to develop your software using different technologies and tools that allow us to meet any deadline or budget requirements.
Your Expectations: Our customers usually have difficulty deciding which software development company and outsourcing services provider to choose, as there are so many different companies with different prices and services. This is why we offer customized solutions for each client.
There are thousands of software development companies, but only a few offer the best offshore outsourcing services that are flexible and innovative to help business owners outsource their software development projects.
How many resources do you need for your project, and how frequently will you need them?
Resource allocation depends on the complexity of the project. Each project requires a certain number of IT personnel, which will determine how long it will take to implement the project. Suppose you agree to provide us with business and technical documentation. In that case, we will be able to use your documentation so that we can properly estimate the time and cost required to complete your project.
By the project type:
According to our experience, each type of company has its own requirements for software development, and all companies have different features. We have a great team of experts with many years of experience developing software systems that different companies need.
We are ready to do every required task – from creating an ERP solution for large enterprises to web applications for small businesses – as long as there is a demand for your product in the market.
The project needs: The development team can quickly adapt to any task and considers the customer’s wishes. The company has a flexible approach so that customers are more satisfied with the final product. Our offshore outsourcing company can handle any software development project and meet your business objectives in a cost-effective way.
By the application type: Each type of application a customer plans to implement requires a different level of assistance from our side, which can generate additional costs for our services or make them more affordable. You can select the level of assistance in development projects and get the final product you require.
By the project size: The following factors are important in determining the costs of outsourcing software development services:
The required number of resources and their experience;
The complexity of the project and its duration;
The resources you provide us with to implement your software, which includes directly employed specialists, third-party consultants, developers;
What commitment on time do you make for the delivery of your software project? If a company wants a new solution that is created in just six months, but if it takes eight months, there will be additional costs for additional employees and personnel performance.
By the industry you are in:
The nature of the industry, business size, the scope of matching, and other characteristics may significantly affect the final cost for your project. The company will define the business solution according to your requirements, and many projects in different industries may be transferred to us successfully. You can share your software engineering project with a company like AGS with highly competent and unmatched quality standards.
What assistance do you require from the outsourced enterprise during the development process?
This can include any number of additional features such as translations, graphic design, or multimedia development. For example, how will quality control be handled, and what must they deliver to you on a monthly basis? All these factors contribute to outsourcing costs.
Why should you consider hiring Auxano Global Services(AGS) as your software outsourcing partner?
We are here to help your businesses with outsourcing software development services.
AGS is a company that has been providing software development outsourcing services for over 15+ years. We can help you develop your business and achieve your goals by outsourcing software development services from our established divisions in various locations and providing high-quality support services throughout the project life cycle.
In addition, our company is an expert at outsourcing enterprise-level software projects with our qualified staff of engineers, developers, and managers that are ready to begin working on your project today.
Our top reasons why AGS is the best Outsourcing partner for you:
AGS is one of the leading outsourcing companies in Europe and the USA, with thousands of satisfied customers:
AGS has outsourced enterprise solutions for Fortune 500 companies, MNCs and SMEs. We have been providing services to clients across the globe. Our skills can help you develop your business and achieve your goals, while our experience and knowledge can ensure that your project runs smoothly throughout its life cycle.
AGS has a large team of highly skilled professionals:
Our professional team is ready to work on your software project to meet your quality standards as quickly as possible. Our employees are experienced and have the skills to complete your project successfully. Our contracts allow you to control the entire development process, including interface design and quality assurance.
AGS offers various cost-saving solutions for our customers:
AGS offers Top Offshore Software Development Services at a low cost and a wide range of other benefits that will help you achieve your business goals. Why not take advantage of our low-cost outsourcing options and enjoy their benefits?
AGS has a project management team that can provide high-quality expertise and consultancy services:
Our project management team will be able to provide detailed feedback on your business needs and offer appropriate solutions that maximize your potential. This team is dedicated to providing high-quality service and ongoing support during the life cycle of your software development project.
AGS can help you with all phases of your development process:
AGS has been developing businesses for over 15+ years, providing services throughout the entire software outsourcing process. We understand the needs of our clients and are always ready to share our professional knowledge and expertise with you.
Outsourcing software development services from AGS can help you achieve your business and personal goals faster.
AGS is here to help your businesses with outsourcing software development services. We are your Outsourcing Partner for all types of offshore applications and software solutions.
We have been providing software development outsourcing services for over 15+ years and can offer solutions to your business needs. You can contact us anytime to get a free consultation by filling out our Contact Us form, and we’ll call you back.
Frequently Asked Questions
1. Is outsourcing software project development safe?
Yes, it is safe because we have a team of experts developing and implementing software projects. We offer a complete solution to our clients.
2. What are the benefits of outsourcing software development?
Outsourcing software development provides many benefits to your business, including cost-effectiveness, improved efficiency, faster delivery and reduced risk. Our focus is on quality execution and timely delivery at competitive prices, with high-quality service throughout the life cycle of your contract.
3. What is the advantage of working with AGS?
Our top advantage is that we have been providing outsourced enterprise solutions for Fortune 500 companies, MNCs and SMEs. We have been providing services to clients across the globe. Our skills can help your business achieve your goals, while our experience and knowledge ensure that your project runs smoothly throughout its life cycle.
4. Why should you consider AGS for your next outsourcing project?
In addition to cost-effectiveness, efficiency, speed, and risk reduction, we also provide several benefits to our clients. First, we pride ourselves on the quality execution and timely delivery of your contract at competitive prices and high-quality service throughout the agreement term.