What does it mean to outsource software development?
Outsourcing is a business practice in which certain functions or duties are done by service providers outside of the company rather than performed in-house. With software development, companies seek additional help for their development goals and may engage in a partial or total outsource agreement, depending on their needs.
At LTC, we work with companies as either a part of their development team, focused on specific responsibilities or as the core development team fully managing the project.
Why outsource software development?
There are many reasons a company would choose to outsource software development. Though there are many advantages, most outsourcing is done so the company can stay focused on core business goals, save time on projects, and save money. However, we’ve broken it out into what we’ve viewed in our experience as the top 5 reasons to outsource software development:
1. Cost reduction
There are many variables overlooked when starting to employ a large software team. Of course, salary is a consideration, but cost is also incurred in hiring, training, accommodating, and equipping a growing development team. Labor costs in some countries, such as the United States, may far outweigh those in other locations, especially for low-level tasks.
At LTC, our core business and project management teams are located in the United States. However, our core development team is located in the Philippines. Not only are both teams experienced and knowledgeable in agile software methodologies, due to this setup, they are also available at a lower cost than you’ll find with other outsourced software development providers.
2. Better control over expenses
As we briefly discussed in the first point, employing a development team of 1-1000 comes with a lot of incurred costs. In addition, there are many other expenses that may be unforeseen. Benefit costs, wages, and ongoing training tend to increase over time. However, working with an outsourced team puts a firm budget in place every month. If an additional expense or hours are to be incurred, they will be discussed well before and communicated with all members of the team.
3. Lack of available IT talent
According to the Bureau of Labor Statistics, IT jobs are expected to grow 22% through 2020. Experienced IT professionals and developers are being sought after as the technology boom shows no signs of fading anytime soon. Along with this experience, comes high and competitive wages as potential employees are pursued by recruiting companies.
The lack of availability of software developers on the open job market leaves available positions open for months, which fuels a lack of resources and in turn, a project delay. By utilizing an outsourced company with well-staffed development teams, you save the months required to identify, recruit, and integrate a potential candidate into your team and focus that time instead on moving forward with your development project.
4. Free up company workforce & management resources
Already have an in-house development team? Like most IT professions, many programmers face burn-out due to high-pressure situations and consistent demands. By pushing lower-priority or low-skill tasks to outsourced professionals, you can free up the workforce to work on projects highlighting their given experience and talents.
Similarly, knowing you need a custom software application and hiring an internal development team are two situations that don’t often go hand-in-hand. To improve your business focus, it may be best to leave the software development (and management) elsewhere and do what you do best.
5. Acceleration of digital transformation & faster project development
As the world continues to be more digital and mobile-focused, companies are having to adapt quickly to meet customers’ expectations. If you’re looking for a custom platform for either internal or external use, it’s likely you need it as soon as possible. Outsourced project development allows you to have a team that is constantly pushing development toward the end goal, without getting distracted by day-to-day business objectives.
To choose an outsource software development company to partner with, the first place to start is defining your goals and expectations. Next, reach out to request a quote and get more information! We would appreciate an opportunity to connect with you and establish a partnership. Feel free to contact us with your information, and we’ll be in touch shortly!
