Programming Outsourcing: How Does It Work?

August 16, 2016

Thinking about outsourcing your next big software project? If yes, we are here to help you!

In this era, programming outsourcing has become immensely popular among companies that operate in the U.S., Europe, and Canada. According to savvy business owners, it is not just a way to build top-quality software solutions, but also save business many business resources, including budget costs.

Outsourcing brings great benefits to your business, but there are some challenges and issues when it comes to managing outsourcing partnerships. This article addresses them to help you evaluate whether software development outsourcing is right for your company.

Why Do Companies Outsource Computer Programming Services?

Key drivers to outsource cover

Companies hand over their core business operations to a specialized third party vendor to streamline them, increase profitability, strengthen market positions, and improve customer experience. They prefer entrusting a service to a third party to save time and budget costs and dedicate more resources to strategic business functions. 

Pros & Cons Of Outsourcing Programming

Pros and cons of outsourcing programming

The following pros and cons of outsourcing coding services should be taken into account before deciding to go with this option or not:

Pros

  • Cost-effectiveness. Cost is one of the main factors that are taken into account during the decision-making process. As compared to creating software in-house, software programming outsourcing can cut development costs by nearly 50% percent. Additionally, salary taxes, equipment, office space, and other expenses are covered by the outsourcing partner. Also, if you decide to go with programming outsourcing, no big upfront payments are required, which makes this option all the more attractive. 
  • Time-saving. Programming outsourcing not only saves costs, but also the precious time of your in-house team, or building one from scratch and leading the project yourself. 

With programming outsourcing, you can find a team with the right tech skills and experience, explain what problem you need to solve with the software solution you want to build, and just monitor the development process from time to time. As a result, you will have a product on your hands faster and avoid time spent on creating and managing a new in-house team.  

  • Flexibility. When you outsource coding projects, you do not have to spend time and resources on managing the team. Most outsourcing companies offer high flexibility, allowing you to scale your team up and down as the project requires. This also allows you to save budget costs.
  • Improved focus. Instead of worrying about the internal resources, outsourcing enables you to focus on your major business needs aimed at fulfilling strategic goals.
  • Less time-to-market. Outsourcing is a great way up the speed of your software development. With the availability of ready-to-use infrastructure and experts provided by your outsourcing partner, you can reduce time-to-market significantly. Plus, when you hire the right experts for your project, you skills may also contribute to reaching the end result faster.
  • Access to advanced technologies. With programming outsourcing, you can get access to professional outsourcing providers with developers who have expertise in the latest technologies, like Augmented Reality and Internet of Things. Software solutions with the latest tech can elevate the efficiency of different operations, surprise customers in new ways, and significantly cut costs in the short and long term. 

Cons

  • Communication restrictions. Miscommunication is the biggest drawback when you outsource coding projects. This can be the result of cultural differences, language barriers, continuously poor internet connection that does not allow for long meetings. Still, most outsourcing providers already solved these issues by educating their employees and taking care of technical issues.
  • Risk of data theft – If you are outsourcing programming, you need to share confidential information and ideas with your third-party vendors. Even if they have signed the NDA, you still do not have a full-proof guarantee that your data is secure. Nevertheless, reputable vendors who have been operating on the market for many years will not risk their reputation and the success of your project.   
  • Company Morale – If you choose to outsource programming projects instead of delegating them to in-house development teams, the moral of the latter can take a significant hit. They may wonder why the company did not invest into their training and hired experts from outside, or fear to lose their positions to them.

Offshore Software Programming Outsourcing

Offshore outsourcing is the most common type of IT outsourcing. Most of the companies who opt for it prefer to delegate software development to companies outside their countries to save cost and time.

Benefits Of Offshore Programming Outsourcing

  • Huge savings on employees’ salaries and infrastructure.The most significant reason for going with outsourcing is cost-efficiency. There is no need for enterprises to hire and support an in-house team of professionals when they can access talent all over the world. There are also significant differences in the cost of facilities or equipment when it comes to comparing the two, with programming outsourcing being less heavy on the company’s budget.
  • Access to the talented pools of developers. The best part about offshore programming outsourcing is that it gives you full access highly-qualified and experienced developers around the world that may be hard to find in your country (or expect higher salaries).
  • Time zone benefit. Outsourcing companies work according to your rules, so different time are never an obstacle.
  • Less risk. Risks can be avoided if the project is outsourced to a company with a reliable project management system and time-tested app development process.
  • Shared responsibility. When you decide to outsource a certain programming task, all parties agree on what has to be done and the risk management is shared among them. Managing the risks produced by the development team can be handled better by the offshore team as it is a major part of their business.
  • Innovation and quality. As per your requirements, you can approach highly-qualified professionals who follow the highest standards in software development. They operate at high levels of reliability and efficiency and deliver work with minimum error rate.
  • Almost in-house. If you wish to grow your business globally and cannot find enough qualified people in your country, outsourcing programming services provides you with a skilled team to grow rapidly in a short timeframe.

Cost Of Outsourcing Programming

Cost of outsourcing programming

As it is really hard to shortlist top outsourcing companies worldwide, we have picked up the most popular destinations all over the globe, whose programming outsourcing companies deliver solid results across technology areas while helping you stay cost-efficient. Among European countries, Ukraine is known as the best destination to outsource programming projects. The tech experts here expect salaries of around $27,00-$30,000 per year. Poland is another European country housing three major software development centers where Polish programmers earn $12,000-$40,000 annually. 

How to Outsource Programming Companies

There are several ways to find a programming outsourcing partner. First, you can use ratings of research and consulting firms. The Washington-based Clutch is a good example. These companies provide comprehensive and concise ratings across many software and technology areas and most countries. Another great option is word-of-mouth advice: ask about your business acquaintances, they may have had similar project or someone to recommend. This way, you will get front-row feedback outlining the real advantages and disadvantages of a potential partner.

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