There are a lot of different potential reasons. It varies a little bit by industry. In general, though, the big reasons are:
Those are the big reasons companies outsource, but again, they can vary.
What we have usually seen is a dance between short-term and long-term. It goes like this:
You can think of it almost like a sprint. There is a lot on the board (a lot of tasks) at the beginning that need to be done. As the relationship grows, though, there are many less tasks. But … it can be scary to think about all the things that need to be done to get ready for a software development outsourcing partner, and that (the fear about doing all these tasks) is what holds up the process.
That is a business term. It means that a company spends most of their time on decisions of low risk and low value. They do this because of low-risk, low-value work is easier to control. Thinking about bigger business topics and core functions and future of your company? Those are harder discussions and decisions to make. They require more information, and they seem scary -- if you get a “core function” decision wrong, you could harm your company. But a small task? That seems OK to focus on, because if it gets messed up, it will not change the future of the company.
So people tend to focus on smaller tasks with less value more. It makes sense.
But, long-term that’s not good for your business. When everyone is focusing on lower-value smaller tasks, you have a team that is checking boxes, answering IT tickets, reading emails, going to meetings, doing stand ups where they say what they have for lunch, etc.
That company will not last.
So you need a mix between “the small tasks that must be done” and “the bigger picture of the company and where it’s going.”
Right now, especially, companies are very cost-focused. Facebook is one of the biggest companies in the world, and while they are hiring right now (good!), their executives also admit they are “trying to keep the lights on.” Many companies globally are in hiring freezes or furloughs. People are, legitimately, not getting hired or paid.
But: work is still there. Projects are still there. Some of those projects have already been paid for. People who paid for them? Those other companies? They still want results.
So work needs to get done, but hiring probably isn’t an option at this exact moment -- and since we don’t know exactly how long the health or economic repercussions of coronavirus will last, hiring might not be an option for much of 2020.
OK. So this is a problem. You have work, that someone paid for, that needs to get done. But everyone is focused on the pandemic and keeping the day-to-day going. And you probably are not hiring.
So now what?
Well … you just arrived at the moment you know it is time to outsource. Now all the small things you would need to get ready for an outsourcing partner -- sprints, backlogs, requirements -- are worth it. Because you will get a team, at a lower cost but with expertise, who can do the work you need to be done.
This is your moment.
Glad you asked. We actually prepared a checklist of considerations when evaluating outsourcing partners, especially software development outsourcers. Take a look at it: