10 benefits of Software Development Outsourcing to look out for 2022 & beyond

Software development outsourcing has thrived on the premise that it leads to a significant reduction in operational costs for the same work that has been done in-house since time immemorial. However, global software delivery models are complicated initiatives, with language barriers and cultural nuances adding to the complexities.

According to Statista, the worldwide market spending on IT Outsourcing Services expected to reach $519.3 billion by 2023, the reports reflecting a growth trend which will be observed globally. This figure includes IT infrastructure outsourcing, IT application outsourcing, IT offshore software development outsourcing, and IT administration outsourcing.  

Owing to lower costs and talent shortages, businesses outsource overseas to remain competitive and consolidate their market position. Furthermore, an effective transition to software development outsourcing can help organizations unlock the true value of an Outsourced Software Development engagement that pinpoints the most critical factors like access to the high-performing talent of software developers, modernization of technology, digital business innovation, latest tools, excellent IT architecture along with laying the groundwork for a long-lasting partnership

This blog attempts to discuss the various benefits of Software Development Outsourcing from the perspective of organizations looking to make the switch to an outsourced software development business model. Since it is a common misconception that only lower cost drives businesses towards IT outsourcing, here are the top 10 benefits of software development outsourcing to a third-party vendor:

1. Agility with quality

   Anecdotal evidence suggests that agile methodology goes a long way in helping to achieve great product quality. An agile software development environment ensures greater collaboration between businesses, and cross-functional IT development teams, leading to unmatched speed, efficiency, scalability, flexibility and productivity. An agile team focuses on detecting and fixing bugs in iterations to ensure that the final product meets the business needs of the client. The agile methodology followed by a highly disciplined CMMI Level 5 outsourcing software company helps establish a fail-proof process at their dedicated development centre to ensure that the sign-offs promised in the service level agreements (SLAs) are met.

2. Expertise – the Indian way!

   India is a front-runner in the global software development business. According to Gartner, the four main reasons that make India the most sought-after outsourcing destination are: the availability of highly skilled developers, low labor cost, timezone benefits, market size, and innovation. India is a strong competitor to other Asia-Pacific countries in terms of maturity, market penetration, resource pool, and brand. 

   Talking about academic skills, India produces 1 million technical graduates annually, with specialization in cloud, analytics, software application development, and digital marketing. Furthermore, the Indian IT/ITeS industry has a strong and established customer footprint in North America and Europe with its clientele spanning across industries such as healthcare, manufacturing, retail, BFSI, media and entertainment, among others. 

   In India, approximately 83 million Indians consider English as their second language, making it the second-most spoken language in the nation. The English language has developed and spread to the point in India that it is spoken in the country at par with the rest of the English speaking world. With an average age of 29 years, India is well on its way to becoming the country with the youngest and largest employable population where people truly embracing English language along with other languages.

3. Future-ready approach

   In the past couple of years traditional outsourcing has transformed into disruptive outsourcing. Emerging technologies such as the Internet of Things (IoT), AI/ML, 5G connectivity, and blockchain are accelerating change within the organizations that have the audacity and skill to leap over the technology chasm. The modern market scenario demands that businesses should digitally transform into future-proof enterprises to keep pace with the rapid technology shifts. In a report, Gartner has already forecasted that by 2029, more than 15 billion IoT devices connect to the enterprise infrastructure and 25 billion connected devices will be in use. An experienced outsourcing software company during COVID-19 global crisis, can bring to the table, the necessary technical expertise to design applications with a futuristic approach, so as to meet unique business needs such as leveraging predictive analytics to identify events that trigger unexpected surges in traffic.

4. Huge cost saving

   Software developers based in countries like India work at salaries lesser than what their counterparts command in countries like the United States and the United Kingdom. According to Accelerance, the leading US-based global outsourcing advisory company, businesses can attain a competitive edge through outsourcing and fill gaps in internal capacity, as the skills and expertise that cost $100/hour in the US market can be found at an equivalent standard for just $55/hour offshore. Even by taking into account the most conservative estimates, a business can save tens of thousands of dollars a year in rent, hardware depreciation, product support, employees’ training, and regular employee benefits. Through outsourcing, a business can bring down the overall application development cost from both the standpoint of labor cost and the total cost of ownership.

5. Fast delivery

   A full product development cycle can consume a whole lot of time. The amount of time required for the development of an application depends directly on the scale of the project and the unique business use case. While a native or cross-platform hybrid app can be developed in a few months, it could take several years to build a complex platform that deploys technologies such as AI and machine learning. Outsourcing an enterprise-grade application project to a specialist firm can rapidly accelerate the time-to-market that would otherwise take a long to develop with in-house teams. Augmenting an in-house team means going through the hassles of recruiting and onboarding processes, which can be time-consuming. In accordance with the prevailing industry standards, a reliable software development outsourcing vendor can deliver a minimum viable product (MVP) in up to 12 weeks by following an agile and nimble-footed approach. Hitting first-to-market is the key to success for any startup due to the omnipresent risk of idea theft.

6. One-stop-shop

   Saving time and cost are the ideal outcomes in choosing a one-stop-shop vendor for software development outsourcing model. In contrast to best-of-breed, a one-stop-shop business model plays a crucial role in streamlining communication between the vendor and the client. Furthermore, the availability of a robust talent pool of software developers with in-depth knowledge across technology stacks enables business to unleash infinite value across the entire project lifecycle. A one-stop-shop software outsourcing company provides all the product development services under one roof encompassing ideation workshop, strategy building, UI/UX design, product development, and QA testing along with maintenance and support services.

7. Focus on your idea

   Having an innovative idea always lends an advantage to a business; however, losing focus on your idea can prove to be counterproductive. This is precisely where most startups and young entrepreneurs go wrong by diverting their limited resources and time on application development and the technologies involved. By software development outsourcing, a business can free up energies to focus more on the core business idea and activities such as brand building and research and development to provide value-driven services to its customers. As for the technology part of software development, it is better left to the outsourcing partner, who can provide advice and guidance to business leaders to help them through cutting-edge technology trends such as AI, data analytics, and cybersecurity to implement the best-fit solutions

8. Universal fit

   It is a common myth that software development outsourcing is only beneficial to large enterprises. But in reality, the size of a business has nothing to do with outsourcing. Businesses across scale, from startups to Fortune 500 companies outsource their software development projects. While large enterprises benefit by hiring offshore development teams to mitigate locational risk by distributing the workforce, small and medium businesses outsource to cut spending on human resources, and IT infrastructure, and bypass new employee hassles. Whatever the business use case, industry vertical, technology, or scale of the project, software development can be outsourced to a third-party vendor to drive and accelerate innovation.

9. The MarTech view

   The global martech technology market size is increasing dramatically year-on-year with North America and the UK accounting for more than half (54.2%) of the global total. In the North America market in particular, the increase in martech budget appears to be coming from outsourced marketing technology. Outsourcing digital marketing, SEO, and social media management for branding, lead generation, increasing sales, and customer engagement is now commonplace. Even businesses having huge budgets prefer to outsource digital marketing to an outsourced marketing specialist, who would be better equipped to leverage technology to maximize results in comparison to an in-house team.

10. Trusted strategic partner for Digital Transformation

    COVID-19 renewed the technology adoption and put outsourcing at the front for organizations to stay agile. To utilize the full breadth of their capabilities, more businesses are now outsourcing IT support and maintenance services, which allow them to focus on their core competencies. Undoubtedly, today businesses are running on complex legacy systems and applications that are often overloaded with maintenance and support of software applications, leaving them no time for development and deployment of new software systems. Outsourcing software application maintenance and support to one of the best software outsourcing companies in 2022, looks like a smart way to get real-time support and maintenance of systems, timely upgrades, and migration while ensuring compliance management and cybersecurity.

Kellton – Reliable Software Development Outsourcing Company

Today’s IT landscape is ridden with skill shortages, budget constraints, and constantly changing technologies. To address these challenges, an exceptional team is required that can seamlessly deliver application development, maintenance and support. However, despite the global market being awash with world-class IT development companies, very few have the breadth and depth of skills and resources to address these demands. Kellton can help you leverage new found agility to automate and consolidate applications to free up systems, costs, and talent to fuel your digital transformation.