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Creating an Effective Outsourcing Strategy for Your Software Development

Prevalent Models for Software Product Engineering Outsourcing



In this blog, we will discuss the importance of a well-crafted and an effective software product engineering outsourcing strategy and shed light on the prevalent models in the marketplace, outlining some of the benefits of each of the model and exploring more from a strategic standpoint whether which model might be most appropriate for unique outsourcing requirements. We will also be talking about the cost savings which your organization can potentially make in case you choose to outsource your software product engineering requirements to a strategic partner in the Philippines.


Let’s say you plan on creating a web application or enhancing the design of your website and you find yourself in need of technological support. You are tempted by the advantages of hiring external professionals or what we call "outsourcing" which many companies have proven that this can be both cost-efficient and time-saving.


But what exactly is Product Engineering Outsourcing?


In order to build a high-quality product, increasingly companies (usually in countries with high labor costs) seek external support in their development processes. The need for technically skilled manpower is huge, especially in large and time-consuming software development projects.


Instead of the hiring developers to support traditional in-house group-up projects would often generate higher costs, many of the companies are increasingly preferring to opt for product engineering outsourcing. This practice is based on hiring a software vendor outside the company (and usually in a country with lower costs of technical skilled labor) to perform these services. In short, the company delegates some components of the process to a third party. Their focus may be on product engineering or coding, on testing or design, or performing R&D on a new initiative, depending on the project. Considering benefits resulting from software development outsourcing, it is no wonder that companies opt for exploring partnership with reliable offshore product engineering companies who can provide them with the expected quality at competitive price points.


Therefore software product engineering outsourcing is the use of external resources to effectively implement product engineering requirements or software development projects and primarily operates in three models which you could explore with your outsourcing partner, based on your organizational requirements.


Strategic Alternatives for Outsourcing Your Product Engineering Requirements


Coming back to the web application which your organization intended to develop to enhance the design of your website. You have done a quick cost-benefit analysis and decided on outsourcing this requirement to a reliable strategic partner. However, outsourcing can take numerous forms and you should take a closer look at all of them before making a final decision. Before we could dive further, let’s explore some of the prevalent models in considering a potential vendor for outsourcing software product engineering requirements.


The two main cooperation models are namely Managed Team Sourcing (building virtual software engineering teams) and Managed Services (or also referred to as project outsourcing).



This blog is an excerpt from our ebook entitled The Ultimate Guide to Building a Virtual Software Product Engineering Team.


Know more about the two strategic outsourcing models and discover which works best for you. Download a copy of the ebook for free HERE.