When asked why outsourcing is needed, the most common answer is that it’s done to “cut cost.” Though this may be true, there are several other great reasons to do it. Furthermore, the cost savings are not always guaranteed – the devil is in details. In real life, botched outsourcing projects could actually cost you more money, lead to delays and missed opportunities, and be a source of massive headaches. There’s no free lunch: in many ways, successful outsourced projects require many of the same elements as building your own team (communication, organizational knowledge, processes).
There are several good reasons to outsource:
1. Team augmentation: This is a broad term, and covers many situations. A typical example is when your organization needs people who are hard to find locally. For example, you may need to create a library of numerical methods for your product, but in your geographical area there is a shortage of developers with the requisite mathematical background; and/or you might not have internal infrastructure to manage such work. It may therefore make most sense to find an outsourcing partner that has experience doing such work, with access to skilled mathematicians
capable of writing production-ready code.
2. Time-to-market: Another common theme. The company needs to expand quickly, and deliver their product(s) to market in the shortest possible time. This may require temporary expansion of the development team to handle a peak load for 8 – 12 months. Once the push to release is over, the additional staff may not be needed. As a result, hiring people locally may be an issue – it could take a lot of time, and might be particularly challenging to find staff for such a short-term engagement. At the same, time good outsourcing organizations are accustomed to such arrangements, and are better-suited to deal with the ebb-and-flow of work, given their pipeline of new and ongoing projects. The right outsourcing partner can add employees quickly, train them within a short number of weeks, and greatly compress the client’s time-to-market.
3. Solve a specific technical problem: There are situation when a company is faced with a relatively isolated technical issue outside of its core expertise, and it may simply make sense to contract this out. For example, this could be the development of performance testing harnesses, writing of installers for a variety of operating systems, or other “one-off” tasks that might not be revisited in depth from release to release.
4. Cost reduction: Having the right outsourcing partner could lead to a significant cost reduction – some estimates put this at 3:1 or even 4:1. Large portions of the savings come simply from the different salary rates for software engineers. There is also a financial benefit to reducing the calendar time-to-market – in terms of both overall operating costs and reducing time-to-revenue. But while outsourcing can indeed save money, it’s NOT a silver bullet – it's just one more tool for getting things done effectively, and should be used with care and in areas where it is most appropriate. Should or should not outsource?
The riskiest projects are the short-term ones, ones that last from several weeks to a couple months, requiring just an engineer or two and urgent in nature. Why? Because the “on- boarding” process and inevitable communication overhead tend to dominate the schedule, and there’s no investment, no amortization of the increased initial overhead across a sufficiently large amount of work. On top of that, the specs are often incomplete – if they exist at all – the goals are often redefined on the fly. In that kind of an environment, with no room for mid-course adjustment, outsourcing in general risky, unless you have a trusted partner who is executing the
The SEVANTIZ difference:
At SEVANIZ, we help clients scale their engineering capacity and accelerate their product roadmap. Most importantly, we become their long-term partner and trusted advisor. We know how to outsource engineering services and get the best results. Every business is different and there is a signature process and culture drive their presence in the market. SEVANTIZ understands this very clearly and so we don’t come up with the same prescription for all. We analyze the needs of our clients, unique needs and the scale of the project. Both development speed and applied creativity remain critical priorities for organizations. If you’re looking for software development services, SEVANTIZ can help you create innovative,
engaging products, while simultaneously ensuring rapid time to market. We possess a strong enterprise level experience for decades. We posses a strong startup expertise, building products with a VC funded venture, taking product to market, engaging with customers.
Our software development processes ensure excellence. We combine sophisticated, well proven Agile practices with Design Thinking to ensure your customer remains the central focus during the product development lifecycle. We believe this approach is a key differentiator for our product development capabilities. By using outsourcing strategically — as a way to supplement in-house developers, gain access to a larger talent pool, and improve communication and collaboration with a trusted partner SEVANTIZ –you can boost your productivity and market focus which is key for your core business.
We can provide everything from fast and reliable software product development services, custom application development to match your needs, to mobile integration to rock the mobile world. Reach out to us today and let’s start the conversation.