Software outsourcing – one of the biggest trends for SMEs in 2020

Once seen as a luxury or unnecessary investment, digital transformation is now part and parcel of the modern business world. All over the globe, companies are going digital and embracing the benefits that this transition has to offer. However, digital transformation is rarely simple. It requires a lot of time, money, and attention to detail, all of which can be precious resources for small business owners.

When you enter the market, you’re already trying to compete with well-established players, so your own software infrastructure shouldn’t be the one holding you down or preventing you from reaching your potential. Developing software in-house can put a strain on your budget because, for many small to medium-sized businesses, resources are scarce. At the same time, you can’t compromise on quality either. The solution comes from software outsourcing.

Software outsourcing isn’t exactly new. In fact, in 2019, the global IT outsourcing market was worth $92.5 billion, and more than half of small business owners said that they would be willing to collaborate with a remote tech engineer. Out of all IT jobs, software application and software application maintenance were the most in-demand. In the following year, experts expect the outsourcing trend to become even more pronounced and that, in the next two years, the global outsourcing market might even reach $409 billion.

Let’s have a look at some of the reasons why software outsourcing has become so popular and how it can empower SMEs to thrive.

Outsourcing unlocks a pool of talented developers when the local market lacks it

Let’s assume, for the sake of argument, that you need to develop a type of software, and you have the budget to hire an entire team of developers in-house. Finding those experts isn’t that easy, nor is the process of integrating them. As more and more businesses go digital, small and medium-sized companies find themselves in a recruitment war with big corporations, a war that they rarely win because they simply can’t offer the same perks. At the same time, hiring skilled developers for your project can be difficult if you’re not based in a modern IT hotspot or university center.  

For small and medium-sized businesses in small cities, recruiting qualified software developers can be a challenge, and the process can last so long that it might end up postponing a product launch. With outsourcing, however, you can find talented developers everywhere, who are already qualified and can work remotely on your project.  

Outsourcing is more affordable than hiring a team of in-house developers

The costs of software outsourcing are considerably lower compared to hiring a team of developers in-house. Apart from the monthly salary, plus taxes, you also need to keep in mind the following factors, which can raise the cost even more:

  • Health insurance, bonuses, and other financial perks
  • Training costs
  • Purchasing expensive tech equipment and developing the right IT infrastructure for them to work
  • Once the project is complete, that team may no longer be needed daily

According to Forrester research, businesses can save 12-17% in business expenditure in the short term by outsourcing and even more in the long run.

And the best thing about these savings is that they don’t come with a compromise on quality. On the contrary, you are getting superior services at a fraction of the cost. In recent years, Eastern Europe has emerged as one of the best markets for software outsourcing. Countries like Poland, Romania, Hungary, and the Czech Republic now stand out as centers of innovation and technical talent. As an added benefit, Eastern Europe has some of the highest scores in English proficiency, so communication won’t be a problem either.

Outsourcing saves time and lets you focus on core processes

One of the biggest challenges for small and medium-sized businesses is managing resources and making time to handle multiple processes at once. Unfortunately, software development can be complicated, and as you’re trying to deal with it internally, you may neglect essential core processes.

Software development has a long lifecycle that involves the following:

  • Identifying the problem that you’re trying to solve with the software
  • Creating a list of software requirements
  • Drafting a design plan
  • Building the software
  • Testing and quality assurance
  • Deploying the software
  • Maintenance

Each of these steps can last for months and pose challenges that you didn’t even know existed. Losing track of all other processes to solve one of the many things that can go wrong during software development can cost you. By outsourcing, you’re leaving this task in the hands of the experts, so that you and the team can focus on core processes such as budgeting and business process management.  

Outsourcing is flexible

Small and medium-sized businesses rarely have unlimited resources, and the key to success lies in achieving the best results smartly by using affordable, flexible solutions. Fortunately, outsourcing and flexibility go hand in hand.

It’s not just easier to outsource IT services to a freelancer or agency; it’s also easier to terminate the contract and change suppliers if you’re not satisfied.

Besides, outsourcing allows you to work on a project basis. So, if you don’t need tech services all year-round and you only need a one-time job, you can simply collaborate with an agency for a few months and stop there. Next time you need another service, you can contact the same agency or choose another one, depending on their competency. You don’t have to add new members to the team yourself or pay for their training.

Each company and freelancer work on their own terms, but, in general, most offer maintenance and continuous assistance, so whenever there’s a problem, or you’d like to add new features, you can reach out and they’ll help you as soon as possible.

Image Credit: Team work via Annie Spratt/Shutterstock

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