The Advantages of IT Software Outsourcing: Why Businesses Should Consider It

In modern business activities, the need for IT services has grown significantly in recent years. Yet, the fast-paced development of the IT industry is making the development of applications and software increasingly challenging. This is why many companies opt for outsourcing services, which can be a convenient solution for startups but large organizations as well. 

Outsourcing IT software involves partnering with external developer teams to plan, build, and maintain software for your business. It offers cost-effective solutions, allows companies to be flexible, and to leverage the expertise of skilled developers. 

In this article, we'll discuss the advantages and some of the challenges of IT software outsourcing to serve as a guide in making the right choice for your business needs.

Advantages of IT Software Outsourcing  
 

IT software outsourcing services offer multiple advantages, like cost savings and increased flexibility. Let's explore all the benefits IT software outsourcing has to offer:

• Cost Efficiency: By outsourcing software development, businesses can avoid large investments in infrastructure, technology, and hiring specialized personnel. Resorting to IT outsourcing, organizations can access quality software development services at a lower cost.
• Access to Global Talent Pool: Outsourcing opens the door to a diverse pool of talented professionals globally. Companies can work with individuals or teams with specialized skills required for their projects, resulting in efficient software development.
• Focus on Core Competencies: Outsourcing software development allows for more time to concentrate on core strengths without getting caught up in coding and software maintenance.
• Accelerated Time-to-Market: Outsourcing accelerates the development process by leveraging the experience and efficiency of specialized teams. This rapid development cycle allows for quicker and more efficient product launches.
• Flexibility and Scalability: Outsourcing provides flexibility in scaling resources according to project requirements. This flexibility is particularly beneficial for businesses with fluctuating workloads or those undergoing rapid growth, resulting in optimal resource utilization.
• Risk Mitigation: Companies can share the inherent risks with their outsourcing partners. These risks include market fluctuations or technology changes in the development process. Partnering with experienced outsourcing providers can help mitigate these risks and ensure a successful project outcome.

• Continuous Innovation: Outsourcing partners often bring plenty of experience from working on diverse projects. This exposure to different approaches results in creativity and innovation within the outsourced projects.

   

  Risks and Challenges of IT Software Outsourcing

Organizations looking to outsource software development should understand the advantages and risks before starting a collaboration.  
Here are some of the risks and challenges associated with IT software outsourcing:

• Communication: Sometimes, when working with teams in different time zones, there can be confusion or misunderstandings. To avoid this, it's important to set up clear ways to communicate and use tools that make collaboration easy right from the start.
• Quality Control and Accountability: Keeping an eye on the progress of a project when you and your outsourcing partner are physically apart can be challenging. Making sure there are ways to check and control the quality of work and setting clear expectations, is crucial to ensure the final result matches your project's goals.
• Data Security and Confidentiality: Protecting your ideas and keeping information confidential is really important. To do this, it's a good idea to have strong protocols in place for data protection and to have everyone on the outsourcing team sign agreements promising not to share sensitive information.
• Adapting to Change: Dealing with changes, especially with teams outside your company, can be tough. Staying flexible, being quick to adapt, and keeping communication open are key to making sure the outsourcing arrangement still fits the project as it develops.
• Dependency on External Factors: Things like law or economic changes can affect outsourcing. To handle this, having backup plans and using different outsourcing locations can help reduce the impact of unexpected outside factors.
• Transition and Knowledge Transfer: If you're working with a team that doesn't know your business well, transferring knowledge can be a challenge. Proper documentation, training sessions, and ongoing collaboration can make it easier to share expertise and information smoothly.
• Cost and Quality: Going for the cheapest outsourcing option might not give you the best results. It's important to find a balance between cost and quality by carefully considering and inspecting potential outsourcing partners.  
  
   

IT Software Outsourcing Success Stories: Real-world Examples

1. Print Tracker

Print Tracker offers printer usage data collection services for both extensive and compact printer fleets within the managed print services industry.   
The company was looking to create a user-friendly and effective interface for managing the printer supply lifecycle, aiming to enhance its clients' experience.

By collaborating with MoldoWEB, they were able to deliver high-quality solutions to businesses around the world.

This collaboration led to significant enhancements in the user interface, providing a smooth experience for end-users. By outsourcing its software development services, Print Tracker gained access to talented and skilled developers at a more accessible cost. 

2. Google

Google started outsourcing its software development in 2014. They teamed up with Globant, a technology services provider company to develop a dedicated marketplace, called Project Ara.

While Google is renowned for providing multiple benefits to its full-time employees, taking advantage of software outsourcing services offers the flexibility and access to a global talent pool the company may need occasionally. The main reason for this need is when employees go on parental leave or vacation.

In fact, according to Bloomberg, in 2018, Google’s contractors outnumbered its in-house employees with contractors not being offered the same perks and benefits as direct employees. Receiving fewer or no benefits as a contractor at a company represents a disadvantage in outsourcing. 

3. Microsoft

In 2011, Microsoft announced its collaboration with Infosys, an Indian multinational tech company. This partnership consisted of Infosys managing internal IT services for Microsoft.

The services provided by Infosys included an IT help desk, desk-side services, and support for infrastructure and applications across 450 locations in 104 countries.

This collaboration was mutually beneficial for both companies:

• Microsoft was able to lower enterprise costs by leveraging Windows 7 to streamline implementation processes. The company was also able to access global talent at a lower labor cost.

• Infosys had the opportunity to partner with Microsoft IT while being one of the first ones to experience and implement the latest Microsoft technologies which they could later leverage for partnerships with other customers as well.

   

Future Trends in IT Software Outsourcing

As the IT industry continues to evolve, so do the trends in outsourcing software development. Here are some of the future trends that businesses can expect to see in IT software outsourcing:

1. Emphasis on Automation: As artificial intelligence and machine learning advance, businesses can anticipate an increase in automated software development which means faster and more affordable software development.

2. Agile and DevOps Methodologies: Agile and DevOps methods are gaining popularity in software development because of their flexibility and speed. Outsourcing providers will embrace these methodologies for faster and more efficient software development.

3. Cloud-Based Development: Cloud development platforms are getting more popular because they're scalable, easy to access, and cost-effective. Outsourcing providers are expected to leverage these platforms to deliver cloud-based solutions to their clients.

4. Adoption of Blockchain: Blockchain technology has become more popular recently because it's great at keeping data safe and decentralized. Outsourcing providers are expected to leverage this technology to deliver secure and transparent software solutions.

5. Collaboration with Startups: Outsourcing providers are expected to collaborate with startups to deliver innovative software solutions. Such collaborations can help outsourcing providers stay ahead of the curve by embracing new technologies and approaches.

Conclusion

In summary, outsourcing IT software has become a good way for businesses to stay competitive in the tech world. By outsourcing software development, companies can access talented professionals all over the world, enjoy cost savings, and focus on core competencies.  
While outsourcing software development comes with certain risks and challenges, businesses can reduce these risks by implementing quality control measures, establishing clear communication channels, and carefully selecting reputable outsourcing partners.

The future of IT software outsourcing looks promising, with trends like automation, agile methods, and cloud-based development implemented to make business operations easier and more efficient.