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Outsourcing of software development as a tool for growing your business

Ana Milas, Head of Marketing and Business Development
15.04.2021.

For many companies out there, the term outsourcing is still tabula rasa. With rapid growth of business comes the need for digital transformation, and this need exploded during 2020. Every company today is also to some extent a software development company, as their needs expanded to include implementation of some software within their organization.

To have software developed, one obviously needs developers.

Outsourcing comes in place at this point, as companies usually do not have internal talent, or when they do, he/she has already been assigned to different IT related projects. Or they need access to some rare technologies which they do not carry in-house. And yes, companies whose core business is not software are usually not too focused on it, because it is not their core competence. Aside from these common challenges, there is the fact that there are not enough software engineers on the market. Developers are in high demand globally and locally, which makes hiring in-house almost impossible.

Common misconceptions about outsourcing

The software development outsourcing market is about 67 billion US dollars. There are several misconceptions about outsourcing, but I will highlight the three that are quite common.

You do not have control over your project

It is true that the client does not control the whole process. Why would he? The point of outsourcing is delegating the project to an outsourcing partner and focusing on the job that brings the money to the table – one’s core business. The client and their outsourcing partner do not have to be rigorously divided with a thick black curtain, as clients can and should call and do check-ups and receive reports. However, keep in mind that the outsourcing partner has a goal in mind and will do their best to deliver the result in a timely manner.

Outsourced workers are difficult to train because they are in a different country

Remote work is not a strange thing to anyone anymore, especially since the last year. Distributed teams can be trained and educated on the client’s objectives and corporate principles. It might be easier to work with a partner that is in your city or region, however, there is no difference when it comes to means of communication as most companies work remotely anyway.

Nevertheless, outsourced teams will be adept at their job, but would need to be introduced to the company’s culture and principles, although this should not take too long.

It’s for big players only

According to Clutch.com, more than a third of small businesses outsource their business processes. Outsourcing is flexible, and it can be adjusted to the needs of large- and small-scale businesses. Small businesses might need 1 or 2 developers, whilst a large enterprise will need a big team.

Reasons why outsourcing is a good idea

1.Speed up your time to market

The faster your app hits the market, the more consumers will you have – the math is as simple as that. A good outsourcing partner can leverage his knowledge and experience and provide just the right people, technologies, and tools needed. They perform strongly under the conditions of tight deadlines and follow the principles of Agile methodologies, or Waterfall if needed. They chameleonize their presence, adjusting themselves to your business, keeping in mind their end goal and focus in reaching it.

2. Saving money

When hiring outsourcing teams, companies save money on recruitment, salaries, hiring, onboarding, contributions, etc. Savings can add up to 60%, which is a big deal. Especially taking into consideration that the outsourcing partner already has experience and can handle your project independently. Looking at the US market, a developer’s rate per hour is 50% less in Croatia.

3. You get to focus on things that generate you profit

Innovation and growth are the most important things to any company. To get there, one needs to add value. And to concentrate on this value, successful companies delegate all those things that do not belong to their core business.

To conclude, I would say that outsourcing is here to stay. It has shaken up the software development market and painted a new way of thinking amid clients. It has proven that it is a beneficial strategy for the improvement of business processes, and in the long run – to help businesses grow. Over the past few years, research have been done on this topic, providing us all with facts and figures so that we can make a good decision.

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Projekt je sufinancirala Europska unija iz Europskog fonda za regionalni razvoj. Sadržaj emitiranog materijala isključiva je odgovornost tvrtke Serengeti d.o.o.
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