Outsourcing is way older than the internet or the evolution of computers. Depending upon how you define it, you can trace the roots of outsourcing way back into history. But with the advent of IT, outsourcing became a completely different thing, but not necessarily into a good thing. The earliest outsourcing trends were driven by cost, and many of the practices revolved around lowering the base-line. It was a while before anyone realized that in pursuit of a lower-cost, they had sacrificed quality.
That was when outsourcing 2.0 was born. It’s not one thing or one set of trends, but it’s a change in mindset and evolution of outsourcing practices that are not focused more towards harnessing the best talent around the globe, instead of finding the teams who will do the job for the lowest price. It also means that the SOPs, methods, and strategies around outsourcing have been refined for clear communication, cultural transfusion, and maximum impact. These improved outsourcing trends and benefits manifest best in the software industry.
Outsourced Software Teams and Their Benefits
The software industry is growing at a swift pace around the globe. The industry is moving too fast and changing too rapidly for relevant skill development to keep pace, at least at a local level. Another way to look at it would be that the global software and IT industry wouldn’t have been able to grow as fast if organizations only depended upon local resources and cultivating talent and competencies regionally. The business software and service market were estimated at $322 billion in 2018, and it likely grew faster in 2019 and 2020, compared to the expected yearly growth rate of 10.7%. While it’s true that some cities and regions have evolved into global software hubs, but a substantial amount of software development rests upon outsourcing. There are several reasons why an organization or a business would want to rely on outsourced software teams, instead of solely on in-house talent.
Lack of skilled resources available locally. In the US alone, there is expected to be a shortage of over one million software developers by 2021. Europe is also expected to face a deficit of half a million software engineers by the end of 2020. This shows how much the industry is outpacing the training and cultivation of relevant skill sets in developed countries. Without outsourcing, you are unlikely to find the right skill set, talent, and work-culture resonance to fulfill your organization’s software development needs.
Outsourced software teams naturally develop around raw talent, specialized skill-sets, and constant learning. To compete on a global level, software teams who offer their services to offshore and off-site organizations, out of necessity, learn to stay ahead of the curve. You may not be able to find coders for a language that only came out about two years ago, even if you try to hire graduates right out of college. But if you outsource the task to the right software team, they are likely to have members trained and talented in that language.
Exposure. This is perhaps the best reason to outsource software development. The teams that work on a global scale, providing remote software services, and fulfilling the development needs of clients across the globe, tend to have more exposure than any in-house team. The reason is simple; these teams aren't bound by the software needs of one organization; they get to hone their skills and try their talent on unique problems and cutting-edge solutions.
Agility is another main reason to look into outsourced software teams. More and more organizations are now developing a lean structure, which allows them to change rapidly and adapt to the changing market faster. It also means that they have to take advantage of opportunities whenever they present themselves and have the necessary tools ready. If organizations focus on finding and nurturing talent in-house only, they may become too slow, and their agility might suffer. Instead, if they outsource the task to a competent team while training their in-house resources, they can secure their present and future at the same time.
Outsourced software teams also offer more scalability. If your organization has an IT team consisting only of the necessary individuals, and you need to develop new software for/as a product, hiring a whole new team under your organization’s umbrella, might not be feasible. Instead, if you outsource the task to a team that can work in close conjunction with you, understands your culture, your deadlines, and your software needs, your goal can be achieved much faster. Instead of scaling up beyond your organization’s growth schedule and resources, you can get the same, even better results, by outsourcing to a team that can work with you just as well as your in-house team would have, albeit at a much higher cost.
Professionalism is another reason why outsourced software teams tend to get the job done much faster, and sometimes, better than in-house teams. Many organizations/managers make the mistake of thinking that an outside team will never be as good at understanding their software goals and needs as an in-house team would be. Or that communication with an outsourced software team would be a nightmare. But what happens is that, since such teams are used to offering their services to multiple organizations, they learn to communicate more efficiently, and resonate with an organization’s culture much faster than many new-hires do. Also, since they are untainted by internal biases and immune to an organization’s silos, they tend to get the work done faster and more efficiently.
Outsourced software teams can be an asset, especially in this era of data and AI-centric software development. Even if you have enough resources to cultivate and hone talent in-house, you may not want to delay your software development, especially if it’s something that augments and compliments your core competency (like medical data for predictive analysis software).
The success of your software outsourcing rests heavily upon choosing the right team – A team that's not tied down by conventions and is agile and fluid enough to adapt to your organization's needs. Through outsourcing, you can harness the best available potential in the market. And with clear communication and the right outsourced software team, you may be able to achieve goals and success that’s way beyond your organization’s current scale.