The Tech Leader’s Guide to Software Development Outsourcing

Tech leaders, more than anyone, understand the need to adapt to changing industry trends—and the technology industry is currently going through a great deal of disruption. According to Deloitte, the tech industry will face problems such as supply chain issues, workforce deficits, macroeconomic slowdowns, and global uncertainties in 2023.

Despite these challenges, experts have predicted that in 2023, software development outsourcing will increase by up to 70 percent. So, what benefits do tech leaders see from software development outsourcing, and what should you look for when considering an outsourcing software development company? This article will offer an all-in-one guide for tech leaders to software outsourcing services.

What Is Software Development Outsourcing?

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Software development outsourcing is the practice of hiring an external outsourcing team to work on a software development project rather than using an in-house team of internal employees. Although each outsourcing project is unique, software development outsourcing may include work on software design, coding, testing, support, and maintenance.

Software outsourcing companies have several advantages, and businesses are taking notice. Deloitte has estimated that companies’ spending on outsourcing could reach $731 billion in 2023. Software development outsourcing has grown to include a wide range of services from product development and web development to the latest technologies in AI and machine learning.

Software development outsourcing is often separated into two categories: onshore and offshore. In onshore software outsourcing, businesses work with an outsourcing partner located in the same country. In offshore software outsourcing, businesses work with an international partner located abroad. The term “nearshore” refers to offshore teams located in a nearby country, which has advantages in terms of time zones and collaboration.

Depending on business needs, offshore development teams typically include one or more developers as well as a project manager whose job is to liaison between the team and the client. The team may also include QA and testing professionals, designers, analysts, and experts in highly technical subjects.

4 Key Benefits of Software Development Outsourcing

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With demand for software development outsourcing surging, it’s no surprise that the practice has many advantages. Below are four reasons so many companies prefer to use software development outsourcing.

1. Avoiding internal recruiting

Recruiting for an internal position is no easy task, especially for highly in-demand technical roles. Much has been written about the so-called “IT skills gap,” with companies suffering from serious talent shortages for skilled technical jobs. According to LinkedIn, jobs in engineering and information technology take an average of more than 40 days to fill—and many positions (especially more advanced ones) take even longer.

With outsourcing, on the other hand, businesses have access to the precise skill sets they need from day one. There’s no need to spend time and effort on the long, involved process of hiring, onboarding, and training. Clients of software development outsourcing can ramp up the project immediately, improving efficiency and productivity.

2. Obtaining specific skills and competencies

The IT skills gap has made it more difficult than ever for businesses to find employees with precise combinations of knowledge and experience. In today’s ultra-competitive job market, there simply aren’t enough skilled developers and technical experts to go around. If you’re looking for an AI expert or experienced QA tester to join your internal development team, you might be stuck waiting for a while.

On the other hand, software development outsourcing companies like KMS are already staffed with experienced professionals with a wide variety of niche skill sets. This enables you to ramp up the development process immediately without languishing in limbo until the right employee comes along.

3. Lowering costs

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One of the most attractive reasons for tech leaders to use software development outsourcing is the prospect of lower costs. The costs of software outsourcing vary based on a number of factors: the location of your outsourcing partner, the level of expertise required, the complexity of the project, and more. However, it’s not uncommon for outsourcing clients to employ three offshore developers for the same expense as a single developer in the United States while enjoying the same high-quality output.

Outsourcing also comes with other cost advantages. For example, you don’t have to worry about recruiting, onboarding, and other overhead expenses. Since the outsourcing partner employs developers, you don’t have to pay for employee costs, such as equipment, health insurance, and retirement plans.

4. Boosting productivity

Outsourcing can provide a major boost to company productivity—especially when they don’t specialize in software development themselves. By handling the task of development with the help of an outsourcing partner, you and your employees can devote your attention to core business functionality. You won’t have to spend time, money, and energy on recruiting staff members and planning and executing the project.

By working with an outsourcing partner and improving your development productivity, you’ll also lower your time to market, a crucial metric for beating your business rivals and better serving your customers. Companies that leverage the expertise of an outsourcing partner can accelerate their development process, stay on the cutting edge of technology, and remain ahead of the competition.

5 Steps When Considering Outsourcing Software Development Services

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If you’re thinking about outsourcing part or all of the software development process, careful preparation will give you the best chance of success. Tech leaders looking to outsource development services should follow the tips and best practices.

1. Be aware of time zone issues

In the past, the fact that offshore development partners might work in different time zones could create skepticism among key stakeholders. However, with the era of remote work, many tech leaders’ opinions on this issue has changed. People can now collaborate around the world on a project—whether working from home or in an office, in different states and countries—while seeing a massive degree of success.

Nevertheless, tech leaders should be conscious of how time zone issues might affect communication with their choice of outsourcing development partner. Tools such as collaborative platforms and calendars can help both parties connect meaningfully, even while separated by physical distance. While regular check-ins are important, constant meetings and phone calls may inhibit developers’ productivity. 

2. Prioritize English proficiency and communication

English is the global language of business and technology, and it’s more important than ever that tech roles like software developers have a good command of the English language. In particular, having solid communication and a strong relationship with an outsourcing partner is critical since most of your partnership will take place virtually.

As you hone in on your search for the right outsourcing service provider, educate yourself on their English proficiency skills and how they use communication to relay project plans and updates. While it may not be necessary for all development team members to speak English, your choice of outsourcing provider should appoint a project manager with strong English skills who can bridge the gap between you and your partner. 

3. Look for credibility with past experience

No matter how thoroughly you research and vet potential candidates, working with a new business partner is always a gamble. The good news is that you can maximize the odds of success by looking for outsourcing providers with solid proof points and high credibility. You should be asking questions such as:

  • Is the company well-known for software development, or is it just one of its many services? 
  • Has the company done similar projects to what you’re looking for or worked with clients in the same industry as you? 
  • Does the company have a positive reputation with its previous customers? Can they provide success metrics in the form of case studies, testimonials, and reviews?

4. Keep your options open

Looking for an outsourcing development provider can be a long and challenging process—but once you’ve found the right one, they can be worth their weight in gold. Don’t hesitate to evaluate multiple providers to find the best fit for your needs.

Once you’ve compiled a short list of candidates, think about the pros and cons of working with each one. The criteria you should consider when selecting the right outsourcing software development partner include the partner’s:

  • Alignment with your business goals and needs. 
  • Previous experience with similar clients or in the same industry. 
  • List of software services and technical expertise. 
  • Ability to provide references, case studies, testimonials, and other social proof. 
  • Time zone, English language competency, and preferred methods of communication.

5. Don’t be afraid to lean on a partner

The term “outsourcing” can still get a bad rap among some organizations. Yet as the software outsourcing industry continues to grow, more and more companies are seeing massive success stories from joining forces with a trusted offshore development partner.

Ultimately, you may decide that developing a software project in-house is the right choice for your current needs and situation. However, with so many strong outsourcing providers on the market, businesses shouldn’t be afraid to work with a partner who knows the ins and outs of software development and who has successfully completed numerous projects like yours before.

KMS: Your Go-To Offshore Software Development Partner

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Outsourcing software development services can be an excellent way for organizations to cut costs and boost productivity while gaining access to new skill sets. However, businesses need to carefully consider their options and take the time to evaluate potential offshore software development companies.

KMS Technology is an experienced provider of offshore software development services. Whether you’re a tiny startup looking to release its first software product or a massive corporation needing assistance, KMS is here to help. The benefits of partnering with KMS include:

  • Extensive expertise: We offer a wide range of software solutions, from platform modernization and MVP development to data analytics and AI and machine learning. 
  • Deep offshore roots: We have deep roots in Vietnam, where we employ more than 1,500 people and have received awards as a top 10 ICT company in the country. 
  • High quality of service: Our workforce has low attrition rates and high levels of English proficiency, letting us provide excellent service to our clients around the world. 
  • Track record of excellence: Our access to top-notch technical talent has allowed us to build seven of our own successful product companies. 
  • Tailor-made success: We care about building long-term relationships with our clients and are committed to their success. Our software engineers and project managers tailor the development process to your specific business goals.

Ready to learn more about how KMS Technology’s offshore software development services can align with your next software project goals? Get in touch with our team today to discuss your business needs and objectives.

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