Software Outsourcing is when a company outsources software development services (development, planning, management, maintenance, etc.) to an external company.
Both established companies and startups are using software outsourcing to develop their products, and this is on the rise.
According to the "State of Software Development Report", by 2021, 41.67% of software development companies have outsourced these services to other software companies, and by 2022 and 2023 this is expected to grow to 70%, according to Commit's "2022 State of Tech Staffing".
But what is the reason for outsourcing software? By outsourcing software development to other companies, you can reduce the internal workload, increase productivity, reduce costs, and many other benefits.
Let's see these benefits in detail.
What are the benefits of outsourcing software?
1. Scalability of team size
More than 68% of companies take almost 2 months to hire a software developer.
More than 68% of companies take almost 2 months to hire a developer, and they also need to replace an average of 20.6% of the developers they hire. (You can download the study here).)
It is already a necessity for companies to reduce these times and to have some kind of protection in case things don't work out with their hired developers.
With this in mind, one of the greatest advantages of outsourcing software is the ease of working with the best experts from around the world without having to go through a large recruitment process. Software outsourcing companies take care of this entire process, thus companies that outsource save time and maximize resources without exposing themselves to any risk.
2. Improve team productivity and work quality
When the demand is too high for the internal team, it is necessary to delegate. By delegating activities to experts who understand the principles of the company's projects, better results are achieved in less time.
In other words, with outsourcing software, companies can focus on their core activities, and delegate the secondary ones, increasing the productivity of the whole team and the quality of the work done.
3. Reduce costs
Working with a software outsourcing company reduces costs in multiple aspects:
- Lower internal recruitment costs (fewer recruiters and less time spent).
- It reduces fixed costs in hired staff and infrastructure since outsourced software is usually worked remotely, by working hours, so companies pay only for the expertise they need.
- The team will be able to focus on its core activities, boosting the company's growth and profits.
4. No risk exposure
Companies can delegate several of the risks involved in the development of a project to the companies that perform software outsourcing. For example, when we talked about the risks of hiring a software developer that doesn’t work in the team or also reducing errors by having staff with great skills in the project requirements.
Working with outsourcing software companies ensures that responsibilities are fulfilled thanks to the register of working hours, so you can visualize the workflow and be sure that the project is completed on time.
How does software outsourcing work?
We are going to mention the 6 general steps necessary to work with outsourcing companies. Keep in mind that this process may vary depending on the outsourcing company.
1. Define project requirements
The first step is to clearly define the requirements of the project, the objectives, what you want to reach, and how long it will take. It is necessary to do this in order to understand what you are looking for, and also to be able to provide all the necessary information to the outsourcing companies.
2. Research the outsourcing company
With all the project information, it is now possible (and much more reliable for your company) to look for an outsourcing software company that meets the requirements.
To make sure you get the best possible quality, we recommend that you consider:
- Their experience in similar projects
- The quality of their services
- Their reputation
3. Presenting candidates
After choosing the right company and understanding with them the requirements of the project, the next step is to present the right candidates. Once the right ones have been chosen, the fourth step will follow.
4. Joining the team
A contract will be set up and everything will be prepared so that the developer can join the team or start the project without further delay.
5. Scale as needed
The outsourcing software company is prepared to adapt to an ongoing project, so if more developers are needed, the cycle will be repeated. In this way, there would be no problems when it comes to scaling the project.
6. Project completion
Once all the necessary changes and adjustments have been made, the project is complete. However, outsourcing companies can also take care of maintenance, upgrades, and further development if required.
Why work with software outsourcing companies in Latin America?
In particular, due to cost-efficient strategies, Latin American countries and Costa Rica are slowly becoming the focal point for outsourcing development projects.
Most U.S. companies prefer to work with software outsourcing companies located in Latin America and the reason is that it offers more benefits than other regions:
- Matching time zones
- Better cost-quality
- Incredible talent pool
That’s why at weKnow we help you grow your business with talented developers from Latin America and 12+ years of building premium Digital Experiences and solutions for enterprise clients and agencies. Our work, supporting award-winning agencies and Fortune 100 companies, reflects our expertise and the quality of our services.