Is Outsourced Software Development Right for You? 5 Questions to Ask Yourself

As you grow your business, development and maintenance of the software your business runs on is vital. And you know just how expensive and time-consuming software development projects can be. Eventually, every leader considers whether it makes sense to outsource.

According to Avasant’s 2021 outsourcing study, application development is one of the most frequently outsourced IT functions—more than 60% of tech companies are outsourcing at least a part of their application development. If you have an upcoming project and you’re debating whether an outsourced team makes sense for your specific business, here are 5 questions to ask yourself.

 

1. Is a lack of resources holding our business back from major growth?

There’s always a push and pull of business resources—time, money, and people. Not many (zero?) companies are lucky enough to have plenty of all three. Either there’s not enough capital to hire all the people you need, not enough time for your team to get ahead, or not enough people to build new products before the market changes. You have to invest in all three to be a leader in your industry, but it’s wise to be cautious.

Outsourcing your software development projects allows you to invest in the resources you need more easily and adaptably. An external team not only brings extra people to help your team push forward, it includes its own leadership (saving you time) and, with the prevalence of nearshore talent, costs less than hiring your own team—especially since once the contract is over, you don’t have to find these people more work or agonize about layoffs.

 

2. Are my current development resources doing high-value work?

Often, we see companies that are stable, profitable, and looking to grow—but their software engineers are stuck maintaining current products. Bug fixes and occasional feature updates aren’t the most valuable use of analytical, innovative, and (frankly) expensive people, and that kind of work isn’t what your engineers want to do anyway. If you’re in these circumstances, outsourcing ongoing product maintenance could be a major growth catalyst for your business.

By offloading the important but mundane upkeep tasks to another team, you can maintain oversight on your existing products while getting more value out of the people you hired for their creativity and expertise. That saves costs and unlocks enormous growth potential.

 

3. Do I have the bandwidth to manage this software project?

You know what you want better than anyone, but managing yet another project splinters your attention further and lowers efficiency throughout the team. Especially if you don’t have a background in programming, running a software development team can be difficult—so you have to decide between hiring a technical project manager to lead your dev team, which costs money, or put your precious and finite hours into doing it yourself.

According to Deloitte’s Global Outsourcing Survey, 57% of organizations believe outsourcing allows them to completely focus on their core business activities. Since an external team comes with its own leadership structure, it can sustain itself while you simply provide the backlog of tasks you need done, and focus on your real job.

 

4. How critical is it that my software engineering team be onsite?

We live and work in an economy that’s more distributed than ever. Statista remote-work stats show that nearly half of U.S. business will keep at least 10% of their workforce remote, and 72% of respondents plan on investing in tools for virtual collaboration to support their hybrid workforce.

In a world that’s proven that remote work—especially in tech—is sustainable, outsourcing seems much more feasible. Having a software engineering team that works for you, costs half the price, and the only downside is that they don’t sit in your office building? For a lot of leaders, that tradeoff is totally worth it.

 

5. How can I staff a software development project to get the best business value back?

This is perhaps the most important question to ask yourself. We’re all in business to make money, and while we know that you have to invest in your products to turn a profit, we’d all like to pay less, see results at a faster pace, and work with people we trust to get the job done. That’s value. So what kind of staffing plan reaps the most rewards quickly? For many global companies, outsourced software development has been key to accelerated growth.

In their Global Outsourcing Report, Deloitte wrote that around 70% of those surveyed cited outsourcing as a cost-cutting tool and another 40% said outsourcing provided organizational flexibility to deal with the changes felt by the pandemic, like remote work and fast-paced digitization.

 

Ultimately, it’s a matter of priorities. Would you rather cut costs, or have a team in your office? Would you rather handpick each of your devs, or hire a whole team that can start faster? And critically: How do you define value in software engineering?

Whether you decide to continue hiring internally or give outsourcing a go, being able to answer these questions will help you keep your company on the trajectory you choose.