The Business Case for Outsourcing Managed Software Development Teams
Updated: Nov 29, 2022
With technological advancements and the rise of digitization, the modern-day workplace is increasingly interconnected. Couple these new emerging markets and the rise of a skilled workforce and the case for companies looking for outsourcing services for managed development becomes a natural choice, which has prompted this trend in recent years. While the challenges of finding a reliable partner or effectively managing timelines are always there, companies looking to undertake digital transformation are increasingly looking to outsource the development to managed software development teams as their preferred choice for going to market faster with their technology products.
There’s no doubt about it, often, outsourcing software development to high-quality technical teams delivers a world-class technical output that significantly improves business value. This is not just cheaper, but also reduces the potential risks associated with custom software development substantially.
Through this blog post, we would explore why outsourcing to managed software development services makes business sense, and can your organization go the same way? More importantly, this blog post also attempts to understand the business case for outsourcing managed software development teams to help you make an educated decision on whether it is something that your startup could look to undertake.
But before we get there, let's understand what turnkey development services are and why are they increasingly gaining popularity in recent years.
What Is Product Engineering Outsourcing?
To build a high-quality product, 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 hiring prohibitively expensive developers to support traditional in-house group-up projects would often generate higher costs, many 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 - completely depending on the project. Considering benefits resulting from software development outsourcing, it is no wonder that companies opt for exploring a partnership with reliable off-shore product engineering companies who can provide them with the expected quality at competitive price points.
Outlining The Business Case for Outsourcing Managed Software Development Teams
Lowered development costs
Hiring a team of technology experts can be an expensive proposition, which is just a portion of the costs. Organizations also must spend some time investing in the right infrastructure, building processes and delivery methodologies, and training. By outsourcing, an organization can almost reduce its development cost by half since they do not need to incur any of these expenses. Even in rank-and-file developers, cost advantages can accrue. Labour arbitrage has traditionally been one of the accepted advantages of outsourcing. Research from Aberdeen Group shows that outsourcing software development activities cost approximately ‘30- 65% less than in-house development initiatives.’
While being face to face with your developers seems good, with the advent of the pandemic affecting in-office attendance, it might no longer be a necessity. With technology evolving at the pace, it is, coordinating with teams has become convenient. Having geographically distributed software teams is now par for the course anyway. Scrums, meetings to discuss product features, design, or other inquiries, can easily be done using collaboration tools or video conferencing. This is more important for companies looking to survive the pandemic, who have limited access to human and financial resources and might not be able to afford expensive in-house technology application development.
Access to technology experts
With an acute skills shortage of technical talent, it is getting increasingly difficult to hire experts for the unique requirements of the product pipeline. Perhaps among of the greatest advantages of outsourcing for turnkey software development is the kind of access they can gain to an array of technology experts. Working with an established outsourcing organization gives you access to highly skilled technology experts whose contribution would help in developing a stronger, feature-rich, and robust software product. These experts can also help in identifying ways to make the product better and assess if the product can be developed in other cost-effective ways. The advantage here is that the technology expert can be brought in for a specified period to perform a particular task without any long-term commitment and the associated costs.
Reduced technical debt and improved business agility
As the demand for developing tech applications mounts, most IT teams that are already strapped for time don’t really have an effective way to handle it. What ends up happening is that the requests are placed on a backlog tracker and are attended to as and when they could be. A potential area where outsourcing for software development services might impact is reducing the number of IT application requests or the pending technical debt by sharing the development load with a reliable outsourced partner.
Scaled & ramped down technical teams
In-house development teams are always the first preference and companies, and companies often get stuck to the idea of ‘owning’ the technology sprints and delivery. This idea suddenly starts looking less attractive when companies need to either scale up or ramp down teams to accommodate the uncertain needs of the business environment. Hiring trained developers is not easy and is time-consuming and overstaffing is costly.
Outsourcing for managed software development services gives companies the flexibility to add resources or reduce them according to the speed of development, project demands, and time-to-market amongst other considerations. This has a huge impact on the cost considerations of managing technology teams and often makes the business case for outsourcing favorable.
Avoided risk and chaos
Companies looking to go-to-market faster or looking to progress with their digital transformation goals significantly can avoid all the chaos and risks software application development brings with it by outsourcing to managed software development teams. Application development outsourcing vastly reduces the risks and stressful dynamics involved in any type of development project. Many responsibilities that would normally be on you (such as keeping track of the progress, distributing tasks, and ensuring that all deadlines are met) are taken on by the project manager of the outsourced team. That way, instead of constantly worrying about possible obstacles and complications that might arise, you can focus on more interesting or important tasks.
By outsourcing for managed software development teams, you would ensure that skilled technology specialists are involved with every part of development: the analysis of business processes, coding, implementation, testing, and system maintenance. The only things required from you as a client are consistent comprehensive interaction and assistance to ensure that the projects meet the desired quality objectives.
BlastAsia: Your Strategic Partner for Outsourcing Turnkey Development Services
Our team at BlastAsia ensures that we deliver the best business case for outsourcing managed software development teams by taking a modern approach to software building. With 20+ years of working with clients all over the world, BlastAsia today is a preferred outsourcing partner for companies looking for building managed software development teams that they can utilize for their unique software development requirements. Years of expertise in building applications for varied use cases, a skilled pool of technical talent, and an impeccable track record of customer satisfaction ensure that you get the maximum bang for your buck while looking for outsourcing partners for your software development teams.