Software Development- Outsourcing or In-House?

Posted by Matt Moe on April 29th, 2022

IT outsourcing is rapidly gaining popularity every year. The maximum demand is observed in the USA and countries western countries. Even many small and large companies around the world resort to outsourcing. It is reported that around 300,000 jobs are outsourced by the US annually. This allows them to significantly reduce around (70%) and focus on their field of activity. 

However, outsourcing is much broader: the development of websites and mobile applications, the creation of intercorporate portals, analytical tasks, etc., are transferred to outsourcing. The main parameter of cooperation within outsourcing is the transfer of non-core functions to another company. But why are companies inclining toward outsourcing? To understand it, we need to jump more into the depth of this topic. 

What is Outsourcing?

Outsourcing is a set of measures aimed at transferring certain progress and functions by a company to another outsourcing software development company operating in the desired area. In a nutshell, this is the attraction of resources from the outside. 

IT outsourcing means working on web programming, website development, administration, and custom software development. Companies using software development outsourcing allow them to temporarily attract highly qualified specialists without inflating their staff, thereby saving resources in the medium and long term.

What tasks are given to IT outsourcing? 

Companies often carry out software development outsourcing by companies specializing in this particular type of activity. The reason for this \"complication\" of one\'s activities and the reason for outsourcing, in general, is the economic feasibility of such a division of work.  

Project IT outsourcing involves the development of various applications, the creation of websites and their promotion, the introduction of corporate management systems, the modification of accounting/accounting software, etc.

Outsourcing software development companies specialize in developing science-intensive software such as applications that process three-dimensional graphics and can take on a project to create and implement a business application that contains both science-intensive functionality and fairly typical components, such as input forms in the database. In this case, the development of typical features that are not related to the provision of its own \"know-how\" such a company may well entrust another company that needs orders and does not specialize in science-intensive developments. 

Such IT-outsourcing companies have managers and business analysts on their staff who set the task for business process automation and requirements management. Apart from this, they also have application developers, server code writers, and testers. Ready-made requirements and models are sent to other companies, which create the code for the applications themselves using tools designed for software development. 

Benefits of IT outsourcing

By outsourcing IT tasks, you will get many essential advantages.

Warranty: Professionals will fulfill the duties prescribed in the contract. Conscientious outsourcing software development companies handle each project personally, and specialists deliver their work on time. 

Direct economic benefit: You do not have to create your structural unit and pay salaries to specialists whose services are required infrequently. You will save up to 30% of your money by cooperating with a third party. 

Exclusion of labor disputes with full-time employees: IT outsourcing will save your nerves. You do not have to worry about the task not being completed because the specialist goes on sick leave or vacation.

Access to advanced technologies: Qualified specialists thoroughly understand information and software systems components. You can easily implement advanced developments by ordering IT outsourcing and stand out from the competition. The prices for services and equipment will fully justify themselves.

Increasing the speed of business development: By outsourcing IT tasks, you will get rid of problems in this area and will be able to concentrate on core activities.

Discounts on hardware and software: Many IT outsourcing companies work directly with hardware and software vendors and offer decent discounts. 

Findings: 

As you can see, if the contract is concluded correctly, the advantages of IT outsourcing outweigh the disadvantages. The reason for the appearance of most problems is the short-sightedness of customers.

To fully justify the cost of IT outsourcing:

• Plan your business strategy;

• Take into account the nuances when concluding contracts;

• Transfer the tasks of the main groups to different contractors;

• Choose reliable companies with an impeccable reputation.