What is Outsourcing Software Development

Outsourcing is the process of hiring a third party to complete work on behalf of your business. Outsourcing software development utilizes an outsourcing provider to develop the software your business needs. 

You can outsource software development starting from scratch or only outsource parts of the project. 

Benefits of Outsourcing Software Development for Startups

Most startup companies have a tight budget and many moving parts that take from the limited funds to get the business idea to come to life. To make it in our competitive and tech-savvy business market, a startup must have the modern software consumers today expect. 

Outsourcing software development allows startups to complete their essential development projects at a fraction of the cost. Putting the software development in the hands of experts also means it gets completed successfully and quickly. 

Let’s look at all the benefits of outsourcing software development for startups. 

1. You’ll Save On Costs

The cost savings is typically the primary reason startups outsource software development. The cost of hiring an expert developer in-house is not cheap and can eat up a large portion of many startups' budgets. 

In-sourcing software development isn't feasible for most startups, paying the high salaries of experienced developers, benefits, office space, and up-to-date technology. 

When you outsource, you also benefit from only paying for the services needed when you need them – nothing more, nothing less. So when your software development is completed, the contract is made. You don’t have the developer on staff, so you don’t have to let them go or pay for salaries of developers you no longer have a need for.

The outsourcing software development provider is responsible for providing the expensive modern technology needed for the project, saving a startup company from making that large investment. 

2. You’ll Save Time

Let’s face it, getting a business off the ground takes a lot of time that most business owners can never get enough of. If a startup business insources software development, they would need to go through the dreaded recruitment process to find, vet, hire, and onboard a developer, which can be extremely time-consuming, stressful, and costly. 

Expert developers are in-demand and hard to find. When you are lucky enough to find an experienced developer, you can be sure they come with a high price tag. 

When a startup business outsources software development, it can start its software projects right away. Outsourcing providers have developers on staff ready to take on their next project. 

3. You Have Improved Focus

Outsourcing your software development for your startup business allows you to remain focused on core functions and tasks needed to scale your business quickly and successfully. 

You can rest assured your critical software development project is in the hands of the pros, so you don’t spend your time worrying about it. 

When you outsource software development, you can spend your limited time on other critical projects for your startup business, including planning and implementing growth strategies. 

There are many moving parts you must get in place before your business can hit the ground running. The sooner you get it all completed, the sooner your revenue can begin to grow. 

4. You Have Access to Expert Developers 

Most startup businesses just can’t afford to hire expert developers that are experienced in developing awesome software. If you want to dominate your industry and crush your competition, you must stand out. Having innovative software that consumers love is an excellent way to stand out. 

Many countries have advanced technical expertise and a large pool of highly skilled professionals that you may not find in your country. 

Your project may require specific skills and need more than one developer to handle each part of your project. Outsourcing gives you access to a diverse team with various skill sets. 

Outsourcing software development means your startup can afford to hire the best developers to create your software without breaking the bank. 

If you want to be a disruptive startup, then you must step outside the box with your products and services and have the modern software to back them up.

5. You Have Access to Advanced Technologies 

Technology is forever emerging, and businesses need to keep up to gain a competitive advantage. Startups need to come out with a bang to get noticed and gain traction. Having innovative software is a must for a disruptive startup. 

Many outsourcing software providers maintain the most advanced technologies for a seamless process for their clients and the capabilities of delivering the most modern software. 

Hiring a provider with a proven track record of developing cutting-edge software with the latest technology is an excellent way to gain that competitive advantage your startup needs. 

6. You’ll Hit the Market Faster

Outsourcing software development allows your startup to hit the market quickly since you avoid the delays of recruiting in-house developers that possibly aren’t as qualified. 

When you team up with an outsourcing provider for your software development project, you're putting it in the hands of the pros that are experienced and innovate quickly.

7. You’ll Have Flexibility 

If you hire a developer in-house for your startups’ software development project, you have less flexibility since you have one professional with just their skillset. 

When you outsource software development, you gain a team of professionals with various skill sets that can collaborate to handle even the most challenging projects. 

Outsourcing also allows your startup to have multiple projects developed simultaneously, if needed, enabling you to scale at the pace you want. 

You also have the flexibility to utilize the outsourcing provider for some projects and in-source others if you have a specific skillset on staff to handle some of your software developing needs. 

8. There Is Less Risk

When you hire a software developer in-office, the risk of development is all on you. Your developer may need to go through trial and error with parts of the project they’re not completely experienced with. Mistakes can be extremely costly that a startup just can’t afford. 

Outsourcing software development for your startup is less risky since the outsourcing provider takes the risk. When you partner with an experienced provider, they have gone through trial and error and learned how to avoid costly mistakes since the risk is on them. 

9. Increased Production

Outsourcing software development for startups allows the internal team to work on other essential tasks. Stopping production to handle things related to a software project, such as recruiting, purchasing equipment, and managing the project, is just not a good use of limited time for a startup with limited staff. 

So, in essence, outsourcing software development adds to your production team without all the extra fuss that comes with hiring employees. 

Offshore, Nearshore, or Onshore Outsourcing, Which is Best for Startups

Once you decide outsourcing software development for startups is the best business decision, you’ll need to choose offshore, nearshore, or onshore. While all of them are viable options, there are distinctive differences. 

Let’s go over the pros and cons of each so you can decide which you want to go with for your software development project. 

Offshore Outsourcing

Offshore outsourcing is hiring a third-party provider located overseas from your startup business. For example, if your business is in the US and you hire an outsourcing provider in the Philippines. 

Many startups choose offshore outsourcing for software development for the cost savings it brings while utilizing top developers for their projects. 

Pros – The most attractive benefit to offshoring your development project is that it’s the lowest cost option when it comes to software development. Many providers are in countries where their cost of living is lower, which makes their salaries less, so hiring a professional there is a huge cost saving. 

You’ll have access to skilled experts with various skill levels, including ones with a forward-thinking mindset and advanced technical experience – all for a fraction of the cost. Awesome, right?

Cons – There’s most likely a big time difference between you and the provider, which affects communication. If you choose to go offshore, it’s vital to discuss times and methods of communication to avoid frustration. 

Another con to offshoring is language barriers. You must choose a country and provider where English is fluently spoken. Miscommunication or poor communication has been the cause of many outsourcing partnerships going sour. 

Your startup cannot afford delays in development due to communication issues. 

Nearshore Outsourcing 

Nearshore outsourcing is hiring a provider in another country from you but shares the same border as your country. For example, if your startup business is in the US and you hire a company in Mexico. 

Pros – When you outsource your software development nearshore, you have the benefit of lower cost but with less of a time difference. If you want to meet with the provider in person, it’s less travel time. 

Cons – One of the drawbacks of nearshore outsourcing is possibly a language barrier. Another downside is nearshore outsourcing is typically more costly than offshore outsourcing. 

Onshore Outsourcing 

Onshore outsourcing refers to hiring a software development provider in the same country as your startup business. For example, if you’re in Texas and you hire a company in California. 

Pros – The advantage of hiring an onshore outsourcing provider is they typically are fluent in English, so there are no language barriers. There’s only a slight time difference, so scheduling meetings over the phone or in-person are easier. 

Cons – The biggest disadvantage of partnering with outsourcing software development providers onshore is the high price tag it comes with, which many startups can’t afford. 

Another drawback is that you miss out on hiring a provider in a more advanced technology country with more advanced and cutting-edge solutions. 

How to Choose an Outsourcing Software Development Provider for Startups

Choosing the right provider for your software development project is key. Not all providers are created equal, and not all are the right fit for your startup for your software development project. 

Let’s go over what to look for in a provider and how to choose the one that’s right for you. 

Clearly Define Your Needs and Goals

Before you choose an outsourcing software development provider, you must first understand your needs and goals to articulate them clearly to the developers. When you have a detailed plan and what you want out of your software, you will understand the skill level you need for the project. 

Decide Whether to Offshore, Nearshore, or Onshore

Once you define your needs and goals for the software development project, the next step is to decide where you want the project completed. We’ve gone over the pros and cons of each so you’ll need to choose which is best for you. If budget is a factor for this software development project, offshoring is the way to go. If money isn’t a factor, you may decide to go with a nearshore or onshore provider.

Interview Outsourcing Providers

Once you decide where you want to outsource your software development project, you’ll then want to interview providers. Be sure to verify their past experiences and check their work samples. Look at their technologies and skills from previous projects, as it will give you an idea of their capabilities for your software. 

When interviewing with a provider, you’ll want to clearly define your vision for your software and how you want it to look, and the features you want it to have. You can then determine if they understand your goals and have the skills to bring your vision to life. 

You’ll want to understand their communication styles and methods to be sure you will have excellent communication throughout the project. Are they easy to get a hold of? Do they speak fluent English? These things directly affect a smooth working relationship or a monster headache.

Today many businesses understand the importance of company culture and work best with providers with a similar culture. Having similar attitudes helps build stronger relationships with providers and makes for a more pleasant experience. 

It also helps to collaborate with them to bring in a fresh perspective to your idea and think outside of the box together to develop the best software to make your startup stand out from the competition.  

Review and Sign Contract

Once you decide on the best outsourcing software development provider for your startup, it’s time to review and sign the contract. The provider should outline the details of the software project, timelines, and all costs involved. 

If the project is complex, the company may break it up into phases. If so, they may break up costs into parts which means you will pay in chunks throughout the project. 

How to Successfully Outsource Software Development

For a startup business, it's crucial everything runs as smoothly as possible and on schedule. While outsourcing software development for startups is an excellent business decision, it must go right. 

Follow these tips to ensure your outsourcing experience is a success: 

1. Choose the right provider – Choosing the right provider is key to a successful outsourcing partnership. The right provider is much more than just having the skills needed to develop software.
   A provider you can trust, communicate with easily, and understands your needs will ensure a smooth process and a successful end product.
2. Nail down communication – Excellent communication is critical for a successful outsourcing partnership. It’s best to lock in when is the best time to reach your outsourcing provider and vice versa.
   Also, how you will contact them, whether through phone, email, video conferencing, or project management software. Ask the provider how often you will receive updates, so you know what to expect.
3. Overly provide information – To ensure you get what you want from the software the outsourcing provider develops for your startup, you want to give them a ton of data.
   Providing any images or verbiage you want to see, how you want it to look, and the features you want in your software will help the developers meet your expectations.
4. Be flexible – It’s important to know beforehand that things may change during the collaboration of the project, as experienced developers might suggest alternatives to your ideas that would work better for your business. 

Being flexible and taking into consideration their suggestions, knowing they have the knowledge and expertise to deliver the best software will help your startup receive the latest technology. 

So, if you want the best software for your startup, be willing to listen to other perspectives and be flexible with the plan.

Why Outsourcing Software Develop for Startups is an Excellent Choice

A startup business that chooses to outsource software development can hit the market quickly with the latest innovative software without breaking the bank. 

The cost savings a startup business gains from outsourcing allow them to invest in other areas of their business to scale quickly.

Having an outsourcing provider that offers other beneficial services that can help a startup with other processes is a great team to have on your side. Some outsourcing providers provide other valuable services such as customer support, data entry, graphic design, and more. 

Once you have an established relationship with an outsourcing provider, it’s easier to pass the torch when you have tasks that need handling, but you don’t have the time or workforce to do so. 

As your business scales, so do your customer support needs. Rather than hiring a customer service team in-house which is costly, outsource it to the specialists. 

There’s a reason so many large and small businesses choose outsourcing. It’s a proven strategy to reduce cost and improve efficiency while maintaining quality.

The Future of Outsourcing

Outsourcing has been around for decades but is growing substantially as many business leaders learn the awesome benefits it brings. You will find large Fortune 100 companies outsourcing business functions to even the smallest one-man show entrepreneurs. 

Almost any business function can be outsourced. The most common tasks outsourced are:

• IT services, including software and website development 
• Customer support 
• Back office support, including accounting and bookkeeping
• Marketing 
• Graphic design 
• Human resources 

Summary

There are many benefits of outsourcing software development for startups. It’s an excellent business strategy to get the critical software projects completed by top developers, fast and efficiently, for a fraction of the cost if you hire developers in-office. 

A startup business often needs to hit the ground running to bring in revenue quickly before the budget runs out, but it's critical not to sacrifice time and cost for quality. Be sure the outsourcing software development provider you choose is the right fit for your project and business. 

Are you ready to reap the awesome benefits of outsourcing software development? If so, contact Awesome CX today; we have the skills and experience your project deserves.

Sources:

The Real Reason Entrepreneurs Struggle With Time Management | Inc.com

Outsourcing Can Do Much More Than Just Cut Costs | Forbes

Outsourcing In The 2020s: Where Is This Bandwagon Heading? | Forbes