- 1 What is Outsourcing in Software Development?
- 2 What is Meant by Offshore, Onshore and Nearshore Development Process?
- 3 The Pros and Cons of Outsourcing?
- 4 Why do Companies Outsource?
- 5 How To Pick The Right Outsourcing Software Development Company?
- 6 Why Outsource to VironIT?
- 7 FAQ
What is outsourcing in software development?So, what is outsourcing? Outsourcing is a business practice whereby certain company functions are assigned to outside service providers rather than performed in-house. In other words, a company seeks external help or support in performing some of its business activities to stay focused on core business goals and save time and money.
What is meant by offshore, onshore and nearshore development process?
There is a high chance you have heard about the terms offshore, onshore, and nearshore software development. But what it really means? Basically, the “shore” term in the phrase relates to outsourcing software developers from abroad. Knowing that there are markets with skilled and affordable talent, a lot of venture capitalists, small business owners and startups decide to go this path and outsource their developers from abroad.
However, when the terms offshore, onshore and nearshore are brought up – they usually start googling them and their meanings.
In order to save you some clicks next time, we will explain the difference between nearshore, offshore, and onshore software development using one picture below.
ONSHORE means you are outsourcing to a 3rd party in the same country as you.
NEARSHORE outsourcing is an under-utilized outsourcing option, where the 3rd party is in a neighboring country.
OFFSHORE, therefore, simply means outsourcing to a 3rd party in some other country.
The Pros and Cons of Outsourcing?
Why outsource your software development: Advantages of Outsourcing
1. Cost Savings
You may add up the cost of hiring, training and housing staff. Whether you require a team of 5 or 1000, it’s much cheaper to outsource an entire project than to hire each developer individually and place them on internal teams. Outsourced labor in Eastern Europe may cost 80% less than the same labor performed in-house in Western Europe or North America, specifically for low-level tasks.
Additionally, you don’t need to purchase equipment or other supplies and things required for the software development. The main objective of offshore companies is to provide customers with the best possible material handling solution at the reasonable price.
2. Time Savings
Software development takes less time when people work for you 24/7 to deliver your product within the deadlines you set. Also, you don’t have to spend time looking for new developers, hiring and training them to suit your project needs.
3. Lack of in house experience
When the internal team does not exactly has the right experience to deliver the required solution, then outsourcing software development will bring additional power to accomplish the task.
Hiring a full-time in-house developer for short-term projects isn’t really practical. Either you’ll have to keep them busy through the year with new projects or you’ll have to provide them with salary and other benefits even when they aren’t actually working. However, software development outsourcing gives you the luxury to choose developers for a single project. You can retain them for future projects or choose another developer, if you want.
5. Focused Strategy
Your in-house software development team may have to deal with more than one project at a time. As a result, you’ll have to compromise on the quality and sometimes, delay some projects. If you think of hiring new employees, you’ll have to spend more time and money to recruit and train them. However, when you outsource software development, they’ll focus entirely on the project you provide them with and deliver high-quality outputs within the deadline.
6. Improved Compliance
Outsourcing software development allows to create an automated compliance system that will reduce human follow-ups in business processes.
7. Reduced time to market
In fast-paced business environments it is crucial to innovate quickly and being first in the market can be a critical factor for success. For those reasons, an outsourcing company is a great solution to gain control over the speed of your software development. Rather than letting your available resources dictate the timelines, you can quickly scale your remote team to move forward much faster.
8. Technological Advances
Technology emerges of all the world countries. For this reason businesses thriving to gain competitive advantage start looking for external providers when their projects require complex skillsets or know-how that they do not have readily available and where developing these capabilities in-house is simply not feasible. By teaming up with an external partner who has a proven track record of excellence, customers can build cutting-edge solutions in the latest technologies without having to master them themselves.
9. Bring in a fresh perspective
Writing great software frequently requires trying new approaches and out-of-the-box thinking. By adding external members to your team, you will almost certainly profit from hearing new perspectives. Remote team members might surprise you with unexpected feedback and fresh ideas on how to improve your project.
10. Less Risk
You can reduce risks by picking up an outsourcing company that has a top-grade project management team with a tried-and-true process for software delivery and maintenance.
11. Talented IT Professionals
You’ll have instant access to some of the seasoned IT professionals by going foreign and bypassing the gaps in hiring pools you may face in your country.
12. Improved Precision
Offshore development will improve work accuracy in terms of given deadlines on a project. Defined software will deliver accurate results in less turnaround time.
13. Forceful Strategic Planning
Outsourcing software development helps in streamlining the business development processes. It will provide an intensive strategy to have a good advantage in the technical race.
14. Focus on Your Core Business
Let the experts handle your product development so that you can focus on the core value of your business. In the long-run, this will help your company to grow and expand much more efficiently and rapidly.
15. Reach a Broader Market
Look at outsourcing as an opportunity to grow your business in new directions from a global perspective.It allows you to get hold of a bunch of talented developers, who will take your business to new levels through their performance.
Disadvantages of Outsourcing
Are there any disadvantages of outsourcing? In any case, if you are outsourcing a project, this could create problems with standards and performance afterward. Simply, do what you do best, outsource the rest and this will aid you greatly in getting the best software and better user experience for your customers.
1. Lack of Control
When you are signing a contract with an outsourced provider, you are effectively giving the management of your task to another company. Your vendor will not be driven by the same missions and goals as your company. They will most likely only be driven by profit.
2. Hidden costs
You will sign a contract with the outsourcing company that you have hired about the service they’re going to provide. Take note that any details not covered in the contract will be charged for extra. If the outsourced company set up the contract you will most likely be at a disadvantage when negotiations start.
3. Risk of exposing confidential dataEvery relationship between a company and an outsourced provider is built on trust. However, be careful not to expose confidential data to the software development company, as this could cause your company problems.
Why do companies outsource?
Why do we outsource? There is a simple reason why software development outsourcing has become a trend. This modern business strategy combines low-cost software development and seasoned professionals. The success of any outsourcing project is important to both the customer who hires a remote team as well as the outsourcing company itself.
Here are some large companies that have succeeded using this strategy to launch their highly-valued businesses:Skype, AppSumo, Github,AlertBoot, MYSQL, SeatGeek, Opera, etc.
How To Pick The Right Outsourcing Software Development Company?
Define Your Goals
This is a primary step for all your future outsourcing activities. Describe in detail the process, product or service that you need to be outsourced. You need to bring together a core team to evaluate the outsourcing provider and start negotiations.
Check Their Experience, References and Work Samples
One more thing you need to consider is verifying an outsourcing company’s experience. Their past projects show their expertise. Company’s projects show the technologies and skills that can be applied to your project as well.
Cross-Cultural Features to Consider
The country and culture of your outsourcing company are important things to consider while choosing your outsourcing provider. It will tell you something about the economic and social conditions of the region.
Do you think of India or China when you hear about outsourcing?
However, there are better alternatives. Whether you are a small or big business looking to hire a full-stack development team, Eastern Europe and destinations like Belarus, may be the best bet. World’s most influential media like Reuters or Wall Street Journal refer to Belarus as “the Silicon Valley of Eastern Europe”. From another perspective, Ernst & Young, one of the Big Four audit firms, has released a report titled “The IT industry in Belarus: 2017 and Beyond”. EY concludes that Belarus deserves more attention from investors and businesses that are looking for technological partners.
Why outsource to VironIT?
Our company operates 13 years since 2004, with 500+ project behind.
Now we know how to save time and money for our customers. This is true.
If you have a project in mind, just drop us a line at email@example.com
Are you afraid to send money somewhere out of your country?
Let’s use escrow or Upwork.
Can we make your project?
Yes. We employ developers who took part in international programming contests.