How to Outsource Software Development Profitably in 2021

How to Outsource Software Development Profitably in 2021
Photo by Alex Kotliarskyi on Unsplash

For 2020 and beyond, companies of every size and scope must adapt to the latest tech trends if they want to survive and thrive. Embracing this paradigm shift is crucial to enhancing company capabilities and delivering real value. This is precisely where software development outsourcing can make a difference!  

Why Outsource Software Development? 

Software development outsourcing, when done right, allows you to access expertise at your budget. Established development agencies hire top talent. Their professionals are up-to-date with the latest industry trends and best practices. 

They’ve already worked with a vast clientele on a wide range of projects. You can capitalize on their experience to develop the best software solutions while saving time and cutting costs.  With the right software development partners, you can eliminate all the roadblocks and create a technology advantage. 

Creating this edge in-house is challenging, time-consuming and costly. Additionally, if you are located in a country with a skills shortage, access to top development professionals does not come easy because the competition is fierce. 

If yours is a growing company, finding this sort of experience and expertise in a specific timeframe and at your budget can be an uphill task. While outsourcing does not come cheap, it is undoubtedly a profitable strategy for getting the expertise you need to sustain and succeed in the long-term. 

Why Not Hire an In-house Software Development Team?

  • You may have the adequate IT infrastructure to run your internal operations, but you may not have the capacity to accommodate the network, hardware, technology and software solutions needed by your development team 
  • If your project deadlines are specifically stringent, outsourcing makes more sense as you can deliver projects on time without compromising on quality standards 
  • You can expand your development team or scale down depending on your project needs 
  • Eliminate the cost, hassle & risk of hiring a full-time staff
  • When you are particularly busy for a specific period, outsourcing empowers you to ensure both team flexibility and speedy delivery 
  • Even if you have a team of developers in-house, they may or may not have the required resources or experience needed for a specific project 
  • The licensing costs of software development tools are high
  • The cost of hiring an in-house team for software development is high & the process is pretty daunting 
  • It expands your talent pool and gives you easy access to experts from across the globe

In simple words, software development partners bring you the speed, agility and quality that help you stand apart from the rest. 

What are My Options?

If you want to outsource software development, you need to understand the different outsourcing models you can use. 

  1. Onshore – Partner with an agency in your own country 
  2. Offshore - Outsource to a company in a distant country in a different time zone 
  3. Nearshore – Outsource to a company that is located nearby 

Each of these models has its pros and cons, and the right choice really depends on your project needs, budget, and how your company works with its vendors. Essentially, offshore outsourcing is the most affordable option for companies located in the US or Europe. Additionally, the difference in time zone enables you to operate round-the-clock! 

Which is the Best Outsourcing Model for My Business?

When finalizing a company for software development outsourcing, you can choose from the following 3 models: 

  1. Fixed-price Model: In this model, the business enterprise and its partners agree upon a predetermined timeframe and a fixed cost. The solutions are to be developed. Any other requirement from the client’s end is re-evaluated in terms of cost and time. This is an apt solution when you are clear about your project needs & there is little scope for deviation. 
  2. Time and Material Model: When you are not clear about your project needs, your software development partner can help you implement this model. According to this model, the client is required to pay based on the resources utilized. This would include the working hour and technologies used.  
  3. Dedicated Team and Resources Model: This model is suitable if you have a long-term project and need experts willing to work flexibly. This model is also beneficial when you need support and maintenance services post-development. In this model, your development partners assign a team of experts whom you can treat as your in-house team. 

 How to Choose the Right Agency for Your Software Development Needs

Your software development partners can make or break your reputation, relationships, and revenue. Get it right, and you have an expert team that understands your vision and executes it to perfection. 

To zero down on a software development partner that you can rely on to deliver on-time, every time, it is important to do your due diligence when they pitch. Ideally, you can count on your chosen agency if:

  • They have case studies from clients similar to you
  • The specialize in helping clients from your niche 
  • They can show you the end result of the projects they’ve recently worked on 
  • They have an impressive client portfolio 
  • They have credible testimonials and verified reviews on sites like Clutch 
  • They have the tools and the technical competency to bring your vision to life 
  • Their past projects reflect their commitment to go the extra mile 
  • They are easily accessible and can communicate in your preferred language   

Any software development project's success depends on a collaborative approach, transparent communication, commitment to quality, and the willingness to go above and beyond. So, try and choose client-centric software development partners that have innovative ideas to build better products. 

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