Some of you might have heard of the term “Business Outsourcing”. This is when a business hires a third party to serve its client indirectly. This is a very useful technique by which two companies can partner up to serve a single client. Usually, a large corporation would partner with a smaller firm that has the potential it needs to do the work. This way, the clients get what they require, the larger corporation enjoys the repute and the profit, whereas the third-party enjoys the business growth through serving clients. This business practice has been around in many different ways, with and without its labelling word “outsourcing”. Even in IT and networking, outsourcing software development has become a popular way by which software companies are effectively building their profiles and serving clients.
Although outsourcing software development is a great practice, general development has only just started to get better. Gadgets, technologies and useful frameworks have only now started to make work easier for the developers. Thanks to the advances in this sector, computers, systems and online development are seeing their much-needed change. Now, though one may not realize it, the software field is becoming an essential part of the world. This is why software companies who are effectively outsourcing their services are riding this new wave from the front.
How Is Outsourcing Software Development A Beneficial Plan?
The rise of technology has also brought benefits to the end consumers. Thanks to the increasing number of users connecting to the Internet, collaboration, communication, and spread of information has become so much easier. People should realize that this is all because of the software innovations that have occurred in the past years.
Looking at the recent statistics, application demands have produced around $180 billion in revenue up till now. This is a good figure to conclude that this high demand might have also come from businesses of all sizes to stay up-to-date with the changing trends digitization. To cater to these growing demands, the outsourcing software development method has come forward as a bright solution. This practice is cost-effective and provides reduced cost of running a business. Offshoring business to different countries has proven to be more affordable than setting up the business and hiring a team in a developed country, like the United States.
Top Strategies for Software Development Companies
1. Identify Business Function
If you are turning towards outsourcing software development, know that a solid plan is necessary for this venture. Software companies should identify which business function requires outsourcing. Usually, there are three sectors: application development, system integration and database management. Whatever sector you choose should define how your offshore company is going to function. In 2020, there are thousands of offshore companies in the global market. If you are working to shift application development to an offshore location, then all the business KPIs should mark the positive changes that happened.
2. Identify Business Model
There are three main models of outsourcing business development that companies generally make use of; the onsite model, the offsite model, and the offshore model. Let’s take a look:
● Onsite Model
Here, a team of skilled software development professionals are located on the client’s premises. The two parties work closely with the client and there is direct communication with one another. With this model, it is much easier to implement project changes as compared to the other models, which can be taken as indirect models.
● Offsite Model
In this model, the software team resides near to the client’s location. This location can be within the same locality, region, or even state/province. The point here is to be relatively close to the client than in the next model. Here the software team has a more free-hit kind of role since the project requirements are not comprehensively defined. The software team can discuss to decide what is best for the client and then make efforts to produce a great product.
● Offshore Model
Outsource software development companies can also make use of an offshore model. This is when the professional team is neither staying with the client nor near them. Instead, the project team is situated in a different country and they must have complete details of the project they are working on. Since this outsource software development team can be a continent away from the client, the best methods of communication are through emails, phones and video calls.
These are the two main models of business when it comes to outsourcing software development. Other models combine the efforts of the two individual models to form a hybrid. Such models include Onsite/Offshore model and Offsite/Offshore model. While these two can be understood just from their name, there is another three-in-one model, called Global delivery model. Because of how it works, the model is not just complex. The client not only has an onsite team of developers but they also have an offshore and offsite team with them as well. The Onsite team can interact directly with the client, but the offshore team is spread in different regions of the globe and the work is divided equally to all the teams.
3. Identify the Business Formula For Outsourcing Software Development
Outsourcing software development to other locations has its tricks and complications, but with the right guideline, it can yield great results as well. The key here is to do as much research as one can before they begin with this project. One thing businesses should keep in mind is the “business formula” and how well they are going to implement it to yield quality results.
Unfortunately, the trick is simpler to explain but can be challenging to implement. Normally, a software developer who charges $50 for an hour should do twice the work in a single hour as compared to the one who charges $25. However, this is not the case and the developer are not always at fault here either. A simpler solution to this is that you look for the places where equally capable professionals can work for $25. In this case, you will hire two highly professional software developers for $50 rather than one. Not only will this increase your work, but also your work quality.
Software development is a highly innovative field and each year there are newer and better ways of working. Since digitization is a trend that is only going to speed up, more and more companies are realizing the potential of software and the online world of the Internet. This means that if you are a startup leader who is slowly easing your way into the global market, the strategies of outsourcing software development might prove useful to you in every step of the way.