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1. What is a Software Outsourcing Company? What does the Software Outsourcing Company do?

To understand what a software outsourcing company does let us first understand what is meant by software outsourcing and what all falls under this. When a company chooses to have its custom software solutions developed by an external third party it is called software outsourcing. Thus, in simple terms delegating the task of developing software to an external vendor instead of doing it in-house is called software outsourcing. Software outsourcing has become an extremely popular and common practice nowadays with more and more firms opting for it over in-house software development. And this is for a good reason as the pros of software outsourcing outweigh the cons. An outsourcing software development company provides custom software solutions for your firm based on your needs and requirements amongst a whole array of benefits.

2. What are the signs for hiring an outsourcing software development company for your business?

Today’s business and digital landscape is constantly changing and advancing and in order to stay successful and on the top companies need to adapt and implement the latest technologies in their products and services. However, if your company does not have the expertise and technical know-how in a particular field or has limited resources at hand that is when an outsourcing software development company can come into the picture and help. Outsourcing is the answer when,

• Limited resources at hand: When the company is on a limited budget, hiring in-house software developers can prove to be a huge expense. Hiring subject matter experts for software development in niche technical fields such as AI or Blockchain can end up being a costly venture for a firm, especially if the firm is a start-up.
• Need for increased quality: In order to compete in the market at the highest level, the products and services of any firm must be of the highest quality. In case a firm feels that they lack the technical know-how or the expertise required to work on a particular project, then outsourcing can serve as an attractive option.
• Flexible business needs: When the requirement at hand is short term, hiring an outsourcing software development company is a smart choice. With an outsourcing company a firm’s contractual obligations end as soon as the project is over. This is highly beneficial over hiring a full-time software development team by the firm.

3. Advantages of hiring a software development outsourcing company

With software outsourcing becoming an increasingly popular trend, let's understand the advantages companies get from doing this over in-house software development. Few of the key advantages are,

• Quicker implementation and delivery: Outsourcing a project to an external vendor can help a firm save valuable time in recruiting the right personnel for the project. By outsourcing, a firm has ready access to the subject matter experts it requires to get the job done.
• Access to qualified talents: Several outsourcing companies have personnel that specialise in a particular niche field and have ample experience in the same. The same cannot be said about the in-house software development team of a company. Thus, with regards to the subject matter expertise requirements of a project a company can hire an outsourcing company that meets their requirement.
• Scalability Factor: Determining at the outset the number of software developers required to complete the project on time can be especially tricky. However, with an outsourcing model in place companies can expand or scale down the team according to the needs and the pace of the project. With this companies can avoid overpaying employees as well as hiring employees on a time crunch to get the project done on time.
• Reduces the risk factor: When you outsource the project to the right company with the required subject matter experts you drastically reduce the risk element present in the project. A team of talented developers with their best and latest practices and high efficiency can build a strong product as well as conduct robust testing and quality assurance testing.
• Reduction in overhead costs: By cutting down on the expense incurring hiring, on-boarding and training employee process firms can drastically reduce their expenses and refocus their resources on other key areas.
• Ability to focus on core business activities: Outsourcing the software development to an external vendor gives the company the time and the resources required to focus on its core business strategies and business growth instead of focusing on building and running a software development team.

These are few of the key advantages that companies gain when they choose to outsource a project to external vendors.

4. Disadvantages of outsourcing the software development

While outsourcing the software development to an external vendor come with its own set of advantages, there are also a few disadvantages that a company should take note of before it makes a decision. A few of the challenges that come with outsourcing the software development are,  

Security Challenges:

Data integrity and protection is one of the pressing challenges in the world today and working with a third-party vendor on a project can make the task of data protection more challenging. It is very important to understand the privacy policy, data storage and encryption techniques of the vendor before choosing them for a project and sharing crucial data with them.

Communication Gap:

When working with the third-party vendor it is important to understand that you are dealing with a whole other entity which has its own set of workplace ethics, values, standards and structure. This can give rise to problems in terms of the quality of the product, punctuality and language related barriers. Thus, cultural misalignment between the two parties involved can act as potential barriers in terms of delays and reworks.

Quality Assurance:

With high quality a non-negotiable requirement for any software development project and one of the main reasons companies choose to outsource projects maintaining the level of quality can become a challenge when an external vendor is involved. Thus, it is critical to choose the right vendor for the job by vetting them and making sure they meet the requirements for the job.

So, outsourcing the software development to a third-party vendor comes with its own set of challenges and barriers and the deciding factor often lies in choosing the best vendor for the job.

5. Step-by-step process of hiring a software development outsourcing agency

The process of hiring the best software development outsourcing agency for the task at hand is a multi-step process and requires a lot of work at our end. On the side of the client the steps involved are,

• Identify the needs and requirements of the project:  It is important to understand the needs and requirements of the project at hand in terms of the technical requirements, specialists required etc.
• Have clear cut goals and objectives: It is important to chalk out the end state of the project in terms of the objectives the project aims to fulfill. Having clear cut achievable goals for the project is very important to ensure its success. Another key aspect of defining the goal is for the firm to understand why it is outsourcing a particular project instead of doing it in-house – is it to reduce cost? or is it to get an increased quality? Setting this objective will help the firm in not just choosing the right vendor but also in ensuring the project gets done effectively.

Once we have figured out our needs and requirements, the next and the most important step is in choosing the right software development company for the job. This is the most crucial step in the entire process as choosing the best outsourcing software development company for the job can help determine the success of the project. 

• Shortlist companies based on the needs and requirements of the project and the firm: This is where web directory sites such as Selected Firms come in handy as they act as a B2B marketplace connecting potential vendors and clients. Choosing and narrowing the list to a handful of potential vendors will help move ahead and choose the best company for the job.
• Verify the references: It is necessary for the client to do their dur research about the vendors in terms of understanding their offerings, terms of service, quality assurances, past testimonials, privacy policies etc. Doing this right in the beginning will ensure that there are no differences that arise late in what the client wants and what the vendor has to offer.

Following these steps will help the client choose the best outsourcing software development company for the project at hand.

6. What is the cost of outsourcing software development? What different factors can affect the cost of outsourcing?  

Cost is one of the biggest and often the deciding factor behind why companies choose to outsource software development instead of doing it in-house. However, the cost incurred in outsourcing the software development to an external vendor is influenced by multiple factors. The factors that often play an influencing role in determining the cost of the project are,

• Level of expertise: Outsourcing projects often require subject matter experts in niche fields such as AI or blockchain to work on them. Hence one such influencing factor for costs could be the level of expertise and experience of the team hired for the project.
• Team size: The number of people hired to get the project done is also another key influencing factor in the cost structure of the project. However, one of the key advantages of outsourcing a project is the element of scalability. Companies can initially start out with a small team and then increase the number of personnel involved or scale down the number based on the need and deadline requirements. This helps prevent overpaying or delays in the project completion.
• Type of software development: The type of the software project that is being outsourced by the company is another key factor influencing costs. The software development project could be the development of a new software, application modernization, software integration or custom software development. Thus, the nature of the project affects the costs involved.
• Time required & the complexity of the software: The complexity of the software and the time required to complete the job is a major factor that affects costs. Higher the complexity level of the software that is being built, longer the time required and higher the costs incurred.

These are few of the key factors that influence the cost structure of the outsourcing project along with other factors. Hence the company must consider these multiple factors along with its own needs and requirements before it decides to outsource a software development project and chooses a vendor instead of doing it in-house.