Companies now adopt automation to keep up with ever-changing market trends. Nevertheless, digital transformation is a must for automating company processes.
Businesses with in-house software developers can easily undergo such a transformation. However, businesses with a limited budget for building an in-house team rely on outsourcing.
If you plan to hire a third-party partner to achieve your digital transformation goals, read on to discover the pros and cons of outsourcing software development.
Advantages of Outsourcing Software Development
When outsourcing, you trust a third-party agency to build a software product. While this sounds risky, it can also yield excellent results when done right.
These are the benefits of outsourcing software development:
1. Access to Expert Talents
Outsourcing means no longer being confined to limited local talents. Instead, you gain access to global talents, allowing you to work with expert software developers, which adds value to your business.
Moreover, software developers from outsourcing firms undergo training and skill-improvement courses. They have also been in the industry for years, making them professional enough to handle your needs.
2. Reduced Costs
One of the primary reasons why companies outsource is because it lets them control the project’s cost. Outsourcing software development means you no longer have to invest in training, equipment, and office space, all of which are needed if you’re hiring an in-house team.
Outsourcing talents from countries with a lower cost of living further reduces your project’s cost. Software developers from these countries can charge a lower salary without affecting their livelihood.
3. Flexibility
Outsourcing software development lets you adjust the number of employees based on the project’s demand or market conditions. On the contrary, you can’t easily lay off some of your software developers if you hire them internally.
You also gain geographic flexibility when outsourcing, as you can take advantage of time zone differences. For instance, your software developer can work on your product based on their timezone. Once it’s your work hours, the progress will be ready for you to check.
4. Quicker Product Release
Another benefit of outsourcing software development is quicker time-to-market. Third-party outsourcing firms will focus on your project once you close the deal with them. They also have the best techniques and practices to finish your product quickly without sacrificing quality.
Additionally, the amount of time outsourced talents have worked in the industry allows them to provide better support throughout the creation of your software product.
5. Better Risk Management
Many outsourcing firms offer product testing services where they test your product before its public release. This way, you can spot any errors and fix them before your customers can use your software.
Outsourcing providers, especially those that have established their names in the software development industry, also have tight security measures. Because of this, you can ensure that their security and compliance standards will reduce your software product’s risk for data breaches.
Forbes also has a list of benefits of outsourcing software development.
Disadvantages of Outsourcing Software Development
Of course, all business models come with some risk. While the pros of outsourcing software development can bring your business to new heights, they also come with disadvantages. Without proper planning and execution, the cons can outweigh the pros of outsourcing software development.
That said, it’s crucial to understand the disadvantages of this business model to ensure proper execution.
Here are the disadvantages of outsourcing software development:
1. Security Risk
Risk management is both a pro and a con of software development outsourcing. If you don’t pick the right partner, you’ll likely jeopardize the personal data involved in creating your product. They may even access and misuse your customers’ data once the product is on the market.
To prevent this risk, you must choose an outsourcing partner with a proven track record. You can also check for testimonials from their former clients to see if they were satisfied with the firm’s services.
2. Poor Communication
While remote communication tools are available, there can still be communication barriers associated with outsourcing software development. For instance, your software developer may confuse your instructions, leading to incorrect task delivery.
Communicating with your outsourcing partner via phone or email can also affect how they receive your instructions. Fortunately, you can avoid this risk.
For instance, you can use project management tools and explain your project goals to your outsourcing partner before they start working on it.
3. Limited Control
Hiring a third-party partner to work on your software product means you are entrusting them with the entire process. Unlike working with software developers in-house, outsourcing provides you with only a little control over your product’s quality.
You may have a poor-quality product if you partner with the wrong vendor. This will cause you to work on your software again, doubling your expenses.
To ensure your software’s quality, conduct frequent check-ins and progress checkups. You may also set quality measures, so your outsourcing partner knows your expectations.
Ready to outsource? Check out LinkedIn’s list of the best outsourcing practices to help you achieve your goals.
4. Timezone Differences
True enough, working with people in different time zones can provide your clients with 24/7 support once your software is on the market. However, it can also be a disadvantage.
For instance, if you have an urgent project or a question that requires an immediate answer, your software developer may be unable to answer it.
5. Hidden Costs
Hiring a poorly managed outsourcing firm can inflate your budget. This is because when they don’t work on your product well enough, there can be project scope changes or even product rework. This article can help you avoid the hidden costs of outsourcing.
Understanding Outsourcing Software Development Pros & Cons
Outsourcing software development can help your business achieve its goals while spending less budget. However, this is only achievable if done correctly.
Ensure your outsourcing partner is trustworthy and has a good reputation in building software for businesses.
