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

In 2024, it’s almost impossible for businesses to function without an online presence. The need for web and mobile applications has never been higher, as companies make efforts to stay relevant in this modern business environment. Luckily, the number of developers is also growing, so you have a pretty good chance of finding one that will build your project according to your needs and make it a success.       
Although, hiring developers is not always the best strategy for companies. A popular alternative would be software outsourcing, which means partnering with external development teams to build and maintain software for your business.

Today we’ll take a closer look at this practice, and weigh its pros and cons with some real use case examples. 

IT Software Outsourcing: Pros and Cons

Advantages

The first important benefit software outsourcing offers is cost savings. Since you don’t have to pay for hiring fees, benefits, and office space, outsourcing is easier and more affordable.

You can expand your horizons with outsourcing, meaning that you can find and collaborate with the best team for your needs. This team can be located anywhere in the world. 

While your outsourcing team is working on your software project, you can focus on other areas of your business and your core competencies. 

When you work with experienced professionals, you can be sure that your project is in good hands. Their way of working and efficiency speeds up the development process, resulting in faster product launches. 

Outsourcing is a more flexible practice than hiring. Many companies’ resource needs change over time, and the flexible nature of outsourcing makes it easy to scale up or down, depending on your needs. 

Market fluctuations and technology changes are common risks that can occur at any time in the development process. By working with experienced professionals, they will know how to respond to and handle market fluctuations and make your project a success. 

Outsourcing teams work on many different projects with different requirements. This exposure helps them gain deep knowledge and experience to build successful products and continuously come up with innovative solutions. 

Disadvantages

Communication can be challenging when collaborating with a global team. This could be due to language barriers or different time zones. Choose a partner with good English skills, but also look at how they communicate. You want to work with someone who provides regular updates on the project without having to ask. Make sure to agree on communication channels for regular check-ins.

Keeping an eye on your project’s progress and quality of work can be a little challenging when an external company is involved. Make sure that there are ways you can do that by setting clear expectations and goals from the start.

Data security is another one of the risks of software outsourcing. Keeping your information confidential is really important. You can do this by preparing and signing NDAs, with having strong data protection protocols in place. 

Dealing with changes in the market, especially if you have teams outside your company can be another challenge. In such cases, staying flexible and keeping communication open are ways to handle these situations well. 

Depending too much on external vendors is not sustainable in the long run. Things like law or economic changes can affect outsourcing, so having a good backup plan and using different outsourcing locations can help reduce these risks. 

It can be time-consuming to transfer knowledge to a team that doesn’t know your business very well. Offering proper documentation, training sessions and ongoing collaboration will make it easier to share your expertise. 

You do get cost savings with outsourcing, however, choosing the cheapest services to save costs is probably not going to pay off. Cost is a key aspect of any collaboration. Make sure to find a balance between cost and quality when choosing an outsourcing partner.  

IT Software Outsourcing Success Stories: Real-world Examples

1. Print Tracker

Print Tracker is a company that offers printer usage data collection services for extensive and compact printer fleets in the managed print services industry. Print Tracker decided to update their website and give it a new, user-friendly interface for managing the printer supply lifecycle. 

By collaborating with MoldoWEB, from Romania, Print Tracker was able to deliver high-quality solutions to its clients globally. The outsourcing collaboration resulted in a better user interface, offering users a smooth experience using the web app, and Print Tracker got to work with talented and skilled developers at a more affordable cost.

2. Google

Google started outsourcing its software development in 2014. They teamed up with Globant to build a dedicated marketplace, called Project Ara. This outsourcing collaboration was beneficial for Google, as they didn’t need to hire full-time employees for a single project, and they were able to access a global talent pool. 

Most of the big companies outsource different tasks and projects. In fact, according to Bloomberg, in 2018, Google’s contractors outnumbered its in-house employees.

3. Microsoft

In 2011, Microsoft announced its collaboration with Infosys, an Indian multinational tech company. The collaboration was focused on managing Microsoft’s internal IT services. These included help desk, desk-side services, and support for infrastructure and applications across 450 locations in 104 countries. 

This partnership was mutually beneficial, as Microsoft was able to lower enterprise costs by using Windows 7 to simplify their implementation processes. For Infosys, collaborating with Microsoft offered the advantage of experiencing and working with the latest Microsoft technologies which they could later use for partnerships and customers.

Future Trends in IT Software Outsourcing

The IT industry is constantly evolving with new technologies and trends appearing every day.

With artificial intelligence and machine learning advancing rapidly, businesses can expect more affordable and faster software development.

Agile and DevOps methodologies are also becoming more and more popular thanks to their flexibility and speed. Outsourcing companies prefer these methods because they make software development processes more efficient and organized.

With the help of cloud development platforms, you can build scalable, easy-to-access apps. Outsourcing teams use these platforms to offer cloud-based solutions to clients.

Blockchain technology is trending because it’s great at keeping your data safe. That’s why it’s preferred by outsourcing companies and not only, as it’s great for delivering secure and transparent solutions.

More startups are expected to work with outsourcing companies. In many cases outsourcing some of their projects and IT tasks is more affordable than hiring employees.
 

Final Thoughts

Software outsourcing can be beneficial for both clients and external providers as well. Clients can access talented specialists from around the world and outsourcing providers get to work on various projects gaining experience and exposure to different industries.

Outsourcing does come with some risks that are important to be aware of, but with proper planning and choosing the right team that fits your needs, you shouldn’t have any problems.

The future of outsourcing looks bright, with more startups and companies collaborating with external software vendors to save on costs and gain access to specialized expertise and scalable solutions.