Why outsource software development in times when it is easier to hire developers

Outsourcing software development remains an important part of the strategy for numerous companies that are navigating fluctuating demand and fast evolving technology landscapes. Even in times when hiring developers has become easier, the flexibility, expertise, and long-term benefits of external partnerships make them an essential asset for many businesses.

The Role of IT in Business Success

The IT department’s role is to support the business by providing technology and systems that help launch new services on time and ensure they are maintained and improved regularly. In doing that, one of the most important decisions IT managers have to make is whether they will build an internal development team, outsource software development or use a combination of “both worlds”.

Deciding Between In-House and Outsourced Development

The best approach for a company depends on factors such as the size of its software projects, their importance for the business, the consistency of demand, and the need for specialized skills. For many companies that have large-scale, high-priority software needs, the best option is a strong in-house development department supported by high quality external partner who extends and enhances internal teams and their capabilities. This is particularly  important when demand is not constant, which is common in most project-based companies.

Adapting to Economic Slowdowns and Fluctuating Demand

A couple of years ago, many companies started to work with software outsourcing companies because they simply couldn't hire enough developers. Recently, the economy has slowed down, leading businesses to adopt more cautious spending habits. This has resulted in low-medium risk investment strategies and the postponement of many projects across different industries. Investments in IT projects and news applications have also been affected by this trend, which leads to less demand for software development and as a result, companies can hire good software engineers much easier than before.

The question now is whether companies should reduce their collaboration with outsourcing companies, given that hiring skilled software developers has become much easier. To answer this question, it's important to recognize that while scaling is often a key factor, it is just one of the many benefits that working with external companies can offer.

Flexibility - The Key Benefit of External Partners

Flexibility is very important because in high fluctuation times it is hard to predict how big demand for software development will be, especially for project-based companies.

Extended teams can be scaled up or down quickly based on demand, providing flexibility for the company. However, it's important not to reduce the team size below a certain point to ensure that gained knowledge is retained. But if companies decide to cancel the cooperation with an outsourcing partner completely, restarting the cooperation in the future will probably mean that new team members will start working for the client and they will have to go through onboarding and knowledge transfer process again. This costs both money and time, leading to weaker efficiency.

In enterprise software development, the learning curve is long, so it is crucial to preserve the knowledge within the existing external team.

Specialized Skills and Technologies

Another benefit that external provider brings is access to specific knowledge like DevOps, BPM (Business Process Management), Artificial Intelligence and Machine Learning or some business knowledge specific for certain industry. Software services companies work for many different companies in many different industries. That way they have access to different types of technology and their use and have a very broad skill set. Having quick access to this knowledge and using it to speed up the implementation of specific projects and transfer knowledge to internal teams is a huge benefit that working with external partner brings .

The Competitive Advantage of Balanced Capabilities

Maintaining a good balance between internal and external capabilities offers market-leading companies a significant competitive advantage, enabling them to stay flexible and make the most of the available resources. This approach allows them to leverage specialized skills and quickly scale their teams as needed. That is why many companies establish policies to ensure that a certain percentage of their software developers comes from external partners, even when they have the capacity to hire internally. This strategy helps them stay agile in an evolving market.

Serengeti: A Reliable Long-Term Partner for Over a Decade

Serengeti has been a trusted long-term partner to many of our clients for almost 20 years, providing continuous support through both good and tough economic times.

While the scale of our collaboration has evolved over the years, our commitment has never wavered, showcasing our expertise and the value we bring to our clients’ success.

If you're looking for a reliable, long-term software outsourcing partner, contact us today to learn how we can help your business grow.