3 Pros and Cons of Outsourcing Software Development

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With the implementation of outsourcing at the end of the 20th century, the business world has experienced unparalleled opportunities, especially when it comes to cutting labour costs. Outsourcing soon became an integrated part of any company’s success, providing them with the various options to choose from, erasing geographical and other borders and limits.

Although this strategy was controversial in the first place, today, we look at it as an essential part of every business, and an economical, organizational and logical necessity in the fast-paced world that demands speed, quality, simplicity and profitability. 

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What is outsourcing and how does it work?

Outsourcing is the process of using the help of organizations, companies or individuals to work on certain tasks that are needed in the company that uses this business practice. The other party is not affiliated with the company who wants to hire it, it just enables them to get the work done for less money. Cutting labour costs is why companies choose to outsource, whether that includes employees’ salaries, or equipment and technology expenses that would be too high without outsourcing. That’s why b2b call centers such as Simply-Contact are so popular as an efficient business solution.

Still, it’s not only about the lower costs, but it is also about efficiency,  productivity and the quality of products or services. When a big company has to take care of multiple areas, it’s harder to manage the small tasks in the same way as some other company would – if focused on only one, main task. This is the reason why big companies turn to outsourcing as a great way to focus on the main areas of their business, while leaving the other ones to the companies or organizations that are specialized in other areas, which then results in both saving time and money as well as the overall better results. 

What does outsourcing look like in this field?

Out of all the industries available, the IT sector is where outsourcing is most frequently used. This means that software development has the purpose of helping companies in numerous ways, to function, make profits and organize. This can be done by increasing the efficiency of a company through the creation of apps and softwares.

When there is a need for urgent help, better risk management, app responsiveness, cost-effectiveness, quick implementation and flexibility, this is where outsourcing comes in hand and provides companies with some extra help, depending on the complexity of the task.

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Is every outsourcing the same?

There are two types of outsourcing. Offshore is widely known as something that goes beyond the borders of a country where the very company is based. A great example of this is offshoring certain tasks from one country to another, in order to cut the expenses, or because there is a lack of qualified staff in the country where the company is. On the other hand, nearshoring still includes locations that are outside the country where the company is, but it’s at least in the same region. This is a better option since there are no struggles with time zones, language or cultural differences and barriers, as the case with offshore outsourcing.

However, every outsourcing process comes with a certain level of risk. As for every other thing in life, outsourcing is not an ideal option either. That’s why you need to do your research and go through all the pros and cons before making the final decision about outsourcing your software development

PROS:

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LOWER FINANCIAL COSTS

It’s been shown that companies can save up to 80% by choosing to outsource. This is because IT highly skilled individuals or businesses can get the work done without the need for special equipment or licences. This means that you will be able to cut both the capital and operational costs, by hiring someone without having to pay for their training, bonuses and taxes. You will also have a clear image of the expenses and total costs of the projects you need to get done. Makes sense?

MEETING DEADLINES

Not only is it a great option to save your time by avoiding the interviews, negotiating and preparing the employee, but it is also a great way to have things done on time. By minimizing the time spent on recruiting people, you will be able to focus on your business while hiring professionals to outsource your app development.

HIGHLY SKILLED PROFESSIONALS

Outsourcing allows you to be cost-efficient, but it doesn’t necessarily have to mean you will get a worse product, result or service. It can simply mean that the system in their country works differently. At the same time, remote partners may have high competencies and can be highly skilled, with decades of experience, and that’s exactly what you need. With no geographical limits, you can choose the best from the best and see instant results.

CONS:

EXPOSURE OF YOUR DATA

When it comes to outsourcing, the greatest risk would be the risk you might experience when delegating the tasks or projects to businesses or individuals abroad. Not only are you sharing your idea with someone you don’t know and can’t supervise, but you also share your personal data, addresses and other information about you or your company. Furthermore, your data could be the potential target of cybercriminals.

UNEXPECTED COSTS

Although the main goal of outsourcing is to cut expenses, there are some cases of hidden costs that may occur, especially if you opt for offshoring. This may include things such as phone calls, consultations or even some fraudulent activities such as false overestimation or the possibility of getting the same bill twice.

HIRING AND LANGUAGE COMPLICATIONS

Linguistic differences may seem like they are not a problem, and in most cases they aren’t. However, outsourcing can easily become a huge drawback instead of becoming great salvation to your problems. Time zone differences and language barriers may become strong obstacles in the process of communication, which is one of the most important things in the process. Not to mention the different life, business or cultural philosophies. However, if you make a careful selection of the people you wanna work with, you can easily prevent communication issues.

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