Outsourcing has revolutionized how businesses are done in almost all sectors. It was a gradual process, which evolved with time and according to the latest industry requirement. The basis for business outsourcing is to hasten the pace of a business and boost efficiency in a cost-effective way. Taking into account the dynamism of the complex business operation these days, outsourcing is definitely a blessing for all industry verticals. Outsourcing software development is one of the main ways of launching an organization within a limited budget. When comparing the process with in-house development, which needs regular salaries, procurement, workspace, outsourcing becomes a very cost-effective solution, especially for startups. Companies outsource for several reasons. Some of the most common ones include:

Enhancing company focusReduce and control operating expensesAccess to world-class capabilitiesIncreasing or streamlining efficiency for time-consuming tasksFreeing internal resources for other purposesSharing risks with a partner companyMaximize the use of external resource

THE MOST COMMON BENEFITS OF OUTSOURCING

A global outsourcing survey conducted in 2016 highlighted the most common benefits that business organizations could derive from the process. Fifty-nine percent consider the IT outsourcing models as a more cost-cutting solution compared to hiring and maintaining a team in-house. Fifty-seven percent state that the process enables them to focus more on the main business goals.

OPEN COMMUNICATION

Open communication, as well as executive support, are particularly critical to successful outsourcing.  Further consideration should be for a workable SLA or Service Level Agreement that is available openly, to all the involved staff. Whatever the outcome of the arrangement, managing change is critical to the success of the process. Assessing the requirements of the stakeholder is the first part of the process. Furthermore, having open communication channels during this time are relevant. Everyone concerned must be involved in the process.

The following are some of the reasons for the popularity of outsourcing and the reasons for outsourcing today.  

HOW TO FIND THE RIGHT SOFTWARE OUTSOURCING PARTNER

When deciding to go with an outsourcing development model for a startup, the next step is to look for the right outsourcing partner. The quality of the product and eventual success greatly depends on who develops it. How to narrow down the thousands of choices of service providers is a nightmare. The following are three rules of choosing the right software development outsourcing partner.  

TWO MAJOR CONTRACT TYPES

Choosing the right software outsourcing partner is more than a formality. It defines the basic principles of collaboration between the company and the software development partner. There are two major contract types, namely, Fixed Price and Dedicated Team.

FIXED PRICE SOFTWARE DEVELOPMENT CONTRACT

Fixed price presupposes the delivery of a turn-key product. This best works for startups, which are mostly smaller projects that has to enter the market. For this purpose, the product itself should be defined clearly. The essential requirements include UI/UX design that helps to understand fully how the product works, acceptance criteria, spec with detailed requirements. Once the documentation is elaborated with the development team, the product could be estimated precisely. The price and scope would then be approve and development commences.

DEDICATED TEAM APPROACH

In contrast to Fixed Price, the flexible approach of a dedicated team is perfect for software product development that’s ongoing. This is the optimal solution for huge projects, like ERP systems as well as for established startups that need to grow their tech department. There are indeed tremendous benefits of outsourcing as a business grows. The outsourcing or offshore partner should provide with advanced technology expertise, processes, effective communication and flexibility to help achieve business goals.