Software services outsourcing is a vibrant global industry with annual revenues of almost USD 100 billion. The growing sophistication of outsourcing companies and their increasing flexibility to provide services to any client has contributed to the growth of the industry.
Software outsourcing has many benefits for businesses. It helps them save costs, enables shorter time to market cycles, and provides access to cutting edge development expertise. In this article, we look at some of the top reasons of how outsourcing is helping businesses.
Cost reduction is one of the most important reasons why companies outsource. Outsourcing to countries like Pakistan, India or Philippines where skilled worker is 2-3 times cheaper helps to save money. It is much cheaper than onshore outsourcing because in onshore outsourcing the cost doubles as the employee works on site. By outsourcing, companies save on resources since they don’t have to provide technology solutions or IT infrastructure. Additionally, companies are no longer committed to investing on employee training, purchasing expensive software or investing in latest technologies. This helps to yield higher returns in the longer run.
Researchers have found that small firms and new startups gain more from outsourcing than large corporations. Outsourcing helps companies deliver quality software through well defined service level agreements. It allows quick scale-ups and scale-downs, and also offers the facility of on-demand services like SaaS. This enables startups to provide quality service within reasonable time.
Most businesses outsource to utilize services of skilled technical experts which they lack or can’t find among the resource pool. Some companies require skilled expertise for a limited time and are not looking for a long term commitment. These skilled technical experts ensure quality of work is completed on time. Having an outsource partner with skills in multiple areas broadens the skills availability of an organization, and enables an organization to quickly utilize skilled experts without worrying about the hiring process or laborious tasks of finding a skilled expert.
A business investment carries a certain amount of risk which includes market competition, government regulations, financial conditions, and technologies. Outsourcing enables businesses to share and minimize associated risks with the offshore partner which helps to reduce the burden. A task performed by an inexperienced staff is not worth the risk when it can be outsourced to a competent outsource partner who has expert staff to complete the task efficiently.
Companies can increase overall support for their product by providing 24/7 support. They can share work with their outsource partner. The time difference between USA and Asian countries is almost 12 hours. When it is morning in USA, it is night time in Asia. When office hours are about to end in the USA, work can be transferred to the Asian partner to continue with the task. Similarly, the Asian partner can transfer the work back to the USA client when their office hours are about to end. This will ensure continuous work flow and also save money as companies won’t have to pay overtime money to employees. Companies end up paying less because of cost reduction benefits when the work is outsourced to other countries.
Improve Core Areas
This is one of the biggest benefits of outsourcing. Many companies, especially software startups, try to complete tasks themselves. By doing this, they spend a lot of time and money . If work is shared with an outsourcing partner, companies will have enough time to focus on other important business areas like sales. They can also manage team management issues as the offshore partner will be managing the working team. This will also help companies manage and support other key issues besides being worried about project completion.
Software Services outsourcing has many benefits if utilized properly. It is important to outsource to a reputed partner that can complete the projects on time in order to reap the benefits of outsourcing.