Master the art of software outsourcing! Dig deeper into this comprehensive guide, ensuring successful collaborations, quality solutions, and cost savings.
Software outsourcing occurs when companies choose to have customized software solutions developed by third parties. Outsourcing software development has many advantages, including reduced costs, increased efficiency, mitigated risk, and improved security.
In today's largely digitized business landscape, companies have the ability to access the world's leading software developers. Both established companies and startups are using software outsourcing to develop their products.
However, this is just the beginning. Let's take a closer look at what software development outsourcing is and how it can benefit your business.
What is Software Engineering?
One of the most important activities in the world today, software engineering refers to the branch of engineering that focuses on developing software solutions for various purposes. Software engineering leverages a series of principles, methodologies, and best practices to produce high-performance, scalable, and secure software.
Although this definition makes it seem like software engineering is synonymous with software development, the reality is that the former places emphasis on the engineering part. This means that software engineering uses scientific knowledge as a basis for designing and creating software solutions. In this way, software engineering puts precise practices at the center.
Software outsourcing as a global strategy
The rapid pace at which technology evolves means that the software development industry is constantly changing. New programming languages are introduced, new methodologies are constantly developed, and previous industry-standard practices become obsolete as more innovative approaches take over. This is why using software outsourcing as a global strategy has become so important for companies today.
Once you identify the skills gaps in your technology team, you can identify the elements of your project that need to be outsourced.
Nowadays, software outsourcing providers are seen as valuable business partners who can play an important role in growth. Specialized areas of development such as blockchain, cloud computing and the Internet of Things are no longer a challenge for small and medium-sized businesses that do not have an in-house development team.
The benefits of software outsourcing
There are many benefits to outsourcing software development, including:
Accessing global knowledge
Complementing existing infrastructure
Outsourcing development helps companies achieve their vision by outsourcing the skills they lack internally.
Faster turnaround
Outsourcing can speed up the software development process without compromising quality. Working with experienced developers who understand your design principles can speed your product's time to market.
Reducing costs
Outsourcing allows companies to focus on their core business functions and direct their time and resources to solving capacity issues. This is a great way to increase cost efficiency.
Flexibility
When you outsource a software project, you only pay for the expertise you need. This relieves pressure on internal staff and frees up company time to focus on day-to-day business management.
Reduced risk
A software outsourcing company can help mitigate your project development risks. An experienced team will be able to anticipate potential liabilities and identify errors through robust testing and quality control practices.
Responsibilities are fulfilled
An experienced outsourcing team will have robust workflow processes to ensure progress is monitored, milestones are met, and projects are completed on time.
How does software engineering outsourcing work?
Software engineering outsourcing is a complex endeavor with many associated challenges and pitfalls.
However, you can actually succeed at this with the help of a quality software engineering partner and a strict process to guide you. And while this process may differ from company to company and industry to industry, we can summarize it in 5 main steps that determine how it all works.
Project definition
The first step is to define the objectives and scope of the project in question. Here you establish what you want to build, how much you can spend on construction, the goals you hope to achieve and the general timeline. You need to do all of this before you even think about outsourcing, mainly because you need a complete understanding of your project to decide what type of outsourcing you will need.
Research Outsourcing
Armed with the details of your project, you can now go out and research available outsourcing companies that can complete your project successfully. This means you will need to look for suitable companies with the industry knowledge and experience your project requires. This is an exhaustive process that will have you selecting outsourcing companies, understanding their services and models, and evaluating their quality, experience, reputation, and processes.
Project start
Once you've chosen the outsourcing company that best meets your needs, it's time to start your project. In other words, you need to meet with the outsourcing team, explain your goals and outline the roadmap to follow. It is extremely important that you define your involvement at this stage so you know exactly what to expect from now on.
Software Engineering
Once the strategic plan is defined, the outsourcing team can begin working on the software engineering process itself. Depending on the engagement model you've committed to, this could mean different things:
- Start working with your in-house team supported by outsourcing professionals
- Outsource the part of the project that you need the outsourced company to do
- Outsource the entire project to the outsourced company to work on
The option you choose will depend on your own requirements. You may choose to augment staff to fill your team's skill gaps, outsource a portion of your team that is outside your team's capabilities, or outsource the entire project to have the ability to focus on other, more pressing activities.
Project Completion and Beyond
The outsourcing team will follow the agreed roadmap and deliver results according to the predefined schedule. Naturally, this process will have numerous changes and adjustments based on your feedback. The logical conclusion is to have the software ready, but that doesn't necessarily mean the process ends there. Depending on the type of project, the outsourcing partnership may provide maintenance, updates, and additional development.
Top 3 Software Outsourcing Models
There are three main software outsourcing models that companies can choose from. Each model has its own advantages. The outsourcing model suitable for your project will depend on the level of complexity, budget, deadline and level of involvement.
The simplest form of software outsourcing is the staff augmentation model, where an outsourced team works alongside your in-house team to develop the software. Augmented teams typically have face-to-face contact with existing staff, often working in their offices until the project is completed.
The dedicated team model features outsourced talent who have more responsibility for overseeing the project. Our Delivery Teams thus provide a management structure, allocating specific tasks and monitoring the workflow. This way, you benefit from the expertise of highly qualified developers who provide a specific service.
With a project-based model, the outsourced company oversees the entire software development process, from specification definition to workflow allocation, deadline setting and quality testing.
Best Outsourcing Locations: Latin America
Now that you know all about the benefits of software outsourcing and what types of customized solutions you can get with it, you may come across an undeniable fact: the world is a huge place and finding the right outsourcing partner can be a hassle. . To make this process easier, the first thing you need to do is check the best regions for software outsourcing and whether you should opt for nearshore or offshore outsourcing.
Today, most companies (especially those in the US and Canada) prefer to outsource their software development needs to Latin America. Why? Because Latin America simply offers more benefits compared to other regions, which include time zone coordination, a huge talent pool, cost efficiency, geographic proximity, and more.
With all that said, these are the best outsourcing locations in Latin America.
Argentina
No one can deny that, at the moment, Argentina is one of the most popular countries for outsourcing software development. This country is home to some of the most skilled software developers in the world, and its enormous talent pool is making an impact across the board.
Colombia
Colombia is perhaps the most technology-driven country in the Latin American region. Interestingly, Medellín, one of the most prosperous cities in the country, is known as “The Silicon Valley of Latin America” due to the numerous software development companies located there.
Brazil
As the largest country in Latin America, Brazil is excellent at outsourcing many goods and services – but software development is one of the things it does best. The innovative mentality of Brazilian developers has driven the growth of countless projects.
Mexico
Mexico's convenient location and top talented software engineers have made Mexico one of the top choices for software development outsourcing in the world. If your company is based in the US, Mexico is always a good choice for outsourcing.
How to outsource a software development project?
To help ensure your project flows smoothly, here are our three steps to outsourcing software development:
#1: Assess Your Team’s Skills
Before outsourcing software development, you need to know what expertise you need. Assess your team's skills and identify any gaps in their capabilities. Once you know what skills you need, you can create a project specification, explaining what the product should do and how the work should be performed. You can then contact the outsourcing companies on your list and decide which one will be a suitable partner.
#2 Check the quality of outsourcing companies
Before committing to hiring a software development company, check their reputation in the market. Take a look at their website and read their case studies. You should also check third-party review sites and their social media channels to see how they are positioned in the industry.
#3 Implement project management processes
After choosing your software outsourcing team, project management tools need to be implemented to chart progress. Platforms like Basecamp, Trello and Jira allow tasks to be allocated to specific developers. They also enable communication between the customer and developers through calendars and message threads. Your outsourcing company should allocate an Engineering Manager and Team Leaders to ensure milestones are achieved and responsibilities are met.
The key to successfully outsourcing software development is communication. When communication channels are open, projects can progress efficiently and launch on time. Keep in mind that it may take some time to find a software outsourcing company that you want to work with long term. The impact that outsourcing development can have on your business makes the research worthwhile.
Outsourcing myths
Here are some outsourcing myths that need to be debunked.
“Software outsourcing is the same as staff increase”
Although most software development companies that provide software outsourcing services also offer IT staff, these two are completely different solutions. Simply put, the IT team adds talent directly to your internal team. On the contrary, software outsourcing transfers the entire workload to your outsourcing partner.
“The main objective of Software Outsourcing is to reduce costs”
While it is true that outsourcing initially became popular due to its cost-saving capabilities, this is not the feature that made it as important as it is today. Every technology leader will tell you that in software development, talent is the most important resource you can have – and outsourcing gives you access to the best engineers around the world.
“Outsourcing increases costs”
Well, this is certainly the other end of the previous myth. No, outsourcing does not increase costs. In fact, you save all the costs associated with finding, hiring, and retaining in-house employees! This means you can forget about paying for hiring managers, health insurance, ongoing training, 401Ks, office supplies, and everything related to that.
“You can get the same benefits as freelancers”
Hiring freelancers is definitely not the same as outsourcing services to a reliable company. While some small projects may get away with small contributions from freelancers, companies that choose to outsource do so because software outsourcing provides guaranteed talent in the form of custom teams that meet your project's exact needs.
“Software outsourcing is the same as staff increase”
Although most software development companies that provide software outsourcing services also offer IT staff, these two are completely different solutions. Simply put, the IT team adds talent directly to your internal team. On the contrary, software outsourcing transfers the entire workload to your outsourcing partner.
“The main objective of Software Outsourcing is to reduce costs”
While it is true that outsourcing initially became popular due to its cost-saving capabilities, this is not the feature that made it as important as it is today. Every technology leader will tell you that in software development, talent is the most important resource you can have – and outsourcing gives you access to the best engineers around the world.
“Outsourcing increases costs”
Well, this is certainly the other end of the previous myth. No, outsourcing does not increase costs. In fact, you save all the costs associated with finding, hiring, and retaining in-house employees! This means you can forget about paying for hiring managers, health insurance, ongoing training, 401Ks, office supplies, and everything related to that.
“You can get the same benefits as freelancers”
Hiring freelancers is definitely not the same as outsourcing services to a reliable company. While some small projects may get away with small contributions from freelancers, companies that choose to outsource do so because software outsourcing provides guaranteed talent in the form of custom teams that meet your project's exact needs.
“Software outsourcing is the same as staff increase”
Although most software development companies that provide software outsourcing services also offer IT staff, these two are completely different solutions. Simply put, the IT team adds talent directly to your internal team. On the contrary, software outsourcing transfers the entire workload to your outsourcing partner.
What You Should Look For When Outsourcing Software Development
- Choose the right partner: A successful partnership needs to start the right way. Make sure you are fully in agreement with how the project will be developed, the deliverables, the deadlines and so on. Additionally, don't forget to study the company's reputation in the industry, as well as their previous work, recruitment process, and experience.
- Choose the outsourcing model that works for you: As we mentioned before, there are three main outsourcing models you need to choose from. It's best that you understand the differences between them and make the choice that works best for your purposes. If you can, try to do an internal assessment and study your experience, capabilities and weaknesses. Software outsourcing services are fully customizable, so in the end, your choice will always meet your needs.
- Set clear expectations from the start: While the goals of each project will vary, setting clear expectations from the start will always have a big impact on how the project grows and develops. Over time, it is also a good idea to conduct numerous assessments to clearly identify progress and make necessary changes before too many resources have been invested.
- Make communication a priority: Good communication is the foundation of any successful software development project, including software development projects managed by external teams. When all messages and comments are transmitted, you can be sure that your project is on the path to success. So remember to define the default communication channels for your project!
- Focus on scalability: They say that no software is ever truly finished – and most of the time, they are right. That's why the best software outsourcing companies will prepare a maintenance plan from the beginning according to your needs, ensuring that there is a strategy to guarantee the scalability of your software after development is complete.
Software Development Outsourcing Trends
Whenever one year ends and another begins, software development sites fill their blogs with expected trends for the new year. This happens in all areas related to software engineering, including software development outsourcing. Naturally, in a field as dynamic as software development outsourcing, trends come and go all the time, sometimes within the space of weeks.
This means it is impossible to predict which trend will dominate the field next. However, there are certain areas of software outsourcing that are always seeing new trends, including those facilitated by a software development outsourcing company, including:
- New digital technologies
- New development methodologies and approaches
- New outsourcing services
- New actors in the outsourcing scene
- New regulations impacting outsourcing
Which IT services can be outsourced?
Outsourcing IT services is (and should be) a fully customizable practice. Why? For two main reasons: complexity and scalability. No matter what type of technological solution a company wants, each project will always have unique requirements that correspond to the organization's specific context. And as the project naturally grows, it will develop new requirements that aim for higher goals.
In our experience, we have found that the most requested IT services are:
Custom software development
Custom software application development is at the core of all IT outsourcing services. Whether it's customizing a running platform, developing simple applications for a small business, or creating complex solutions to meet enterprise requirements, companies outsource custom software development to achieve their ideal technology solution.
Quality control and software testing services
Quality assurance and testing can be provided as standalone or integrated services and should be the result of a deep understanding of your business objectives and applications. Quality control outsourcing helps your product commit to the highest quality standards in the market, drives innovation, and adds value to the software development lifecycle.
Cloud computing
Developing seamless integration between business operations with cloud-based technologies is a necessity for the current scenario. By outsourcing cloud computing services, organizations can accelerate their digital transformation while increasing business agility, reducing costs and reducing IT complexity.
Mobile and Web Development
Masterfully crafted websites, authentic user engagement, and successful brand experiences are the result of leading web and enterprise app development services. Most companies today know the value of having a strong online presence – not only is it essential for interactivity, but it is also a huge asset for optimizing business processes and increasing productivity.
IT maintenance and support
Keeping up to date with the latest regulations, policies and practices is no easy task. Especially in a world as fast-paced as the one we live in. Working with the best software developers and support engineers makes it easier to manage IT processes with precision, flexibility and structure.
Blockchain Consulting
Advances in blockchain technology have made it a tempting alternative for managing all types of operations. Right now, blockchain's powerful and verifiable network is helping organizations across all industries maximize efficiency and unlock new business opportunities, while ensuring the validity of information through an immutable system of records.
Big Data and Analytics
Living in the age of data has its pros and cons. From a business point of view, it is essential to take advantage of professionals. Capitalizing on the enormous amounts of data resources available is drawing the line between successful projects and not-so-successful projects. Data-driven strategies are the future (and present) of business operations.
IoT Solutions
More and more companies are taking advantage of the Internet of Things to operate more efficiently, gain a deep understanding of their customers' purchasing patterns and increase business value. Smart cities, telemetry, sensor networks, traffic analysis and industrial monitoring are part of the current IoT revolution.
UI/UX software design
Every business should pursue a great user experience strategy supported by engaging user interface design. When customers have great experiences across every touchpoint, it's easy for any brand to gain competitive advantages that increase conversion, reduce customer churn, and drive loyalty and advocacy.
MVP development
A Minimum Viable Product (MVP) is a development model in which a product is built with enough features to satisfy the needs of early adopters. Working with a top MVP development team, especially one that specializes in software development outsourcing, will guide you through the bumpy path of new product development and ultimately turn your raw ideas into usable software.
