As we hurtle our way through 2024, one of the major developing stories has been the evolving business surrounding small and medium businesses (SMBs) and the enterprise market that surrounds them.
The top challenges businesses face primarily point toward a larger struggle for growth and innovation. To do that, companies need to accomplish what they’ve never done before in terms of their technology adoption and, more specifically, software development projects.
Effective software development outsourcing plays a vital part in achieving the necessary goals. But how can it be approached effectively?
IT outsourcing isn’t about calling someone up and asking them to handle your code. It’s about finding a partner who understands your business and can provide a development team that will be dedicated to your objectives. So, what are the pros and cons of partnering with an outsourcing company vs in-house software development? Let’s explore them.
Concerns When Working With Third-Party Software Developers
Most people considering outsourcing software development are usually excited about the prospect but also have understandable reservations. Here are some solutions to some common concerns.
Sharing Intellectual Property (IP)
The first thing any business executive should be worried about is how your business’s intellectual power is protected. Reputable and well-established software developers recognize the importance of this. They are typically willing to sign non-disclosure agreements (NDAs), which should be a standard component of any business transaction. With this in place, your intellectual property is safeguarded.
Losing Control Over the Development Process
Many companies worry about outsourcing because they’re not sure anyone else will be able to align their work with everything their in-house team works on. That’s a genuine, valid concern.
The easy way around this is to hire a third-party software developer who provides a delivery manager to act as a liaison between you and the partner. The delivery manager is responsible for ongoing communication and ensuring the work is on track.
However, whether you have a delivery manager or not, make sure you define the appropriate SLAs (Service Level Agreements) that provide the foundational requirements for your goals.
Additionally, some outsourcing agencies offer to create dedicated on-site development centers to concentrate the distributed work. A physical location you can visit may be an advantage when you want to keep a closer eye on the progress of your product.
Physical and Digital Security Risks
Today, you got all-digital in one place and all-breach in another. According to the 2024 Data Breach Investigations Report by Verizon, 15% of data breaches result from working with third-party vendors. To avoid becoming part of this statistic, you have to investigate the security protocols of your potential software partners. Are they certified by internationally recognized security standards such as ISO? Do they meet your specific security requirements? Make sure to thoroughly evaluate their practices regarding data protection, workplace access, and software security.
Communication Issues
Communication can sometimes be challenging if you have teams of software developers working in more than one place or with time zone differences. If there is a gap in knowledge transmission, this could slow down your project. So, make sure to establish channels of communication with your third-party software provider.
Additionally, evaluate how their teams are onboarded and the communication tools they use. Ensuring a cultural fit between your organizations will facilitate smoother alignment and collaboration between your in-house and outsourced teams.
Benefits of Outsourcing Software Development
Now that the concerns are out of the way, let’s get into the good stuff – the benefits of external software development.
Cost Optimization
Hired vs. outsourced experts can be costly, as there’s a lot to cover in terms of the total cost of hire. Hiring a specialist can take over $4,700 and around 41 days – and that’s just for one person. When you want to build an in-house team, this cost grows fast.
While it may be a justified investment when, for example, you’re developing your IP, it may not be the best way forward when you want to modernize or test new solutions fast. Outsourcing offers a cost-effective alternative in those scenarios, allowing you to save on salaries, benefits, vacations, and other hidden costs. With reliable outsourcing, you only invest in getting the necessary resources to address your software needs.
Access to Specialized Knowledge and Skills
The knowledge that might be a rare find in-house can be available to you within an outsourced development team. Outsourcing can provide access to specialized experts that may be difficult to find on the market or retain in the long run. You won’t need to worry about spending time and resources trying to find the particular experts you need.
Additionally, once they work with you, your in-house employees can tap into their knowledge and experience.
Flexible Capacity
Working with an outsourcing partner gives you the power to move resources stably up and down the value chain for your business and scale the teams as you need to. Organizations partnering with software service providers can easily flex their own capacity to match a project’s requirements without the typical time lag associated with hiring.
You can speed up the development process, as you don’t need to slow down due to the lack of people. Hand it to your outsourced software developer and expand as required without having to consider hiring someone for perhaps a temporary need and letting them go when that particular project is done.
Strategic Partnership to Boost In-House Development
Any business with ambitious goals can transform its entire software and tech outsourcing into a strategic business technology partnership. Collaborating with a dedicated partner willing to go the extra mile can unlock significant value and deepen the engagement. This can range from choosing the best service for your software to strategic technological guidance.
As a result, you not only get the best available solution to your business challenge, but also, through knowledge sharing, you boost the skills of your in-house development teams.
Benefits of Nearshoring in Poland
Poland is now becoming the preferred choice for businesses looking at IT outsourcing with their nearshore method. Why, you ask?
Regenerative Talent Pools
Do you know why foreign investors decide to invest in Poland? Because there isn’t another talent pool quite like it. Poland ranks second in Financial Attractiveness and Talent Availability, boasting over 400,000 IT professionals ready for in-house or outsourced software development projects. This makes Poland an ideal destination for outsourcing software development. Additionally, Polish experts excel in Cloud, AI, Data, and more.
Programming Excellence
Poland is a software dev haven with a vast pool of aspiring computer scientists and numerous individuals holding graduate or post-graduate degrees. With 111 countries to collaborate with, Poland ranks 13th, largely due to its proficiency in English. Consequently, companies that choose Poland for their app development need to gain access to top-tier developers with whom communication is seamless.
In-House Software Development vs Third-Party Software Providers: What’s the Best Choice?
Every business works with software in some form or another nowadays, whether it’s an IoT system or an application for enterprise-wide use. IT can provide a significant competitive edge for businesses looking to make their mark. Therefore, outsourcing software development offers numerous advantages that may far outweigh the disadvantages.
By partnering with a company like Scalo, your organization can reduce costs, gain a strategic partner, and scale operations as needed. The concerns about outsourcing software development are largely unfounded. You can effectively grow your business by choosing the right company with the necessary experience and expertise.
