The Guide: Why Leading Companies Should Consider Software Outsourcing

• By Wagner Lopes
• 21-03-2024
• Software

Imagine a scenario where different professionals are considering how to improve the company’s technology. However, they spend too much time thinking about the ideal concept. But when it comes time to develop it, the technology is no longer important to the consumer.

This is the reality of many companies that have lost time-to-market and value.

Outsourcing skills is one of the solutions that brings agility, flexibility and scalability to this highly competitive environment that is the technology market. According to industry insights, 60% of companies rely on outsourcing for application development, indicating that outsourcing provides adaptability in scaling operations on demand.

Digital transformation and market evolution require strategy, background, innovation and agility. That's why it's important to have talents with extensive experience in their segment. Outsourcing aims to expand its network of technical and consulting talent with experienced professionals ready to start immediately.

This hiring model raises a lot of doubts and uncertainties. To answer these questions, I bring you in this article everything you need to know about how software outsourcing works.

What is Outsourcing?

Outsourcing is the assignment of professionals or multidisciplinary teams with the technical expertise required for your needs. You contract a partner company that is responsible for the entire process of selecting professionals, giving you the guarantee of working with the best talent.

This is a customized process that finds experts who are highly committed to your project. To achieve this, strict quality standards must be followed in the selection of these professionals, with the goal of technical and cultural alignment with the client.

In addition to the selection and hiring of talent, outsourcing offers the monitoring of these professionals on a technical and motivational level, so that they continue to perform according to the client's expectations.

In addition, outsourcing relieves your company of long selection processes and ensures the entire base of prior knowledge.

Lack of specialized talent

The global technology market experiences robust demand for skilled professionals. Employers worldwide will post 3.13 million IT job openings in 2023 in the United States.

The shortage of technology talent is a common pain point for companies seeking to innovate in the technology market. In this way, finding specialized professionals has become an increasingly difficult task.

Faced with this challenging and controversial scenario, IT (Information Technology) outsourcing companies are positioning themselves as an option to streamline business management, improve performance and deliver satisfactory results in less time.

Professionals required for successful system development

Software development requires time, dedication and technical knowledge. To develop a system perfectly, you need the best professionals with different skills, including:

• Product Owners
• Scrum Masters
• Software Architects
• Developers. Backend
• Devs. Front End
• Devs. Mobile
• Devs. Full Stack
• DevOps
• UX/UI Designers
• QA's

All of these professionals can be outsourced. Identifying professionals who understand your market use cases and your area of expertise makes all the difference in project quality, in addition to accelerating development and delivering better results.

Main stacks on the market

In order to develop a complete, scalable, agile and secure system, it is essential that the professionals hired in outsourcing master a wide repertoire of technologies and stacks necessary for the execution of your project, and are constantly updated on the latest industry trends.

Some of the most used stacks are: NextJS, Angular, Appium, AWS, C#, C++, JavaScript, PHP, Swift, Java, Go, SQL, NodeJS, AngularJS, MongoDB, Docker, Digital Ocean and many more in back-end, front-end, mobile, cloud computing, infrastructure and CI/CD, cloud computing and quality assurance.

Why has outsourcing become essential for growing companies?

Outsourcing provides a broad and permanent support to professionals, with technical accelerators that ensure flexibility and agility in processes. With a high level of security and transparency, your project will be technically mature in several segments, including health, legal, finance, retail, education and logistics. There are numerous advantages of having an outsourcing service in your company. See the main ones below:

Flexibility

This is one of the biggest advantages of outsourcing. You can scale up and down the team according to your needs. With a flexible and dedicated business partner, talents will be integrated with your internal team to accelerate your project and help you grow.

Software development outsourcing is based on being adaptable to your demand. Therefore, this strategy is able to offer technical recruitment, a technical talent board to understand your challenges and the ideal profiles for your project, considering not only technical skills, but also the organizational culture needed for rapid impact and success.
With outsourcing, you have full control over the best composition of the team in all phases of the project.

Quality assurance

The professionals involved in outsourcing are qualified, tested and prepared to deliver robust solutions to your project. Working with talented software engineers ensures the security and high quality standards.

Updated technologies

The pace of technological innovation is accelerating. As a result, companies in the expansion phase need to keep pace with new technologies and stay current. Otherwise, you have a lot to lose in your competitive differentiation strategy.

Outsourcing ensures good development practices and the quality of the final product through highly specialized expertise, constantly updated in the most recognized technologies on the market.

Reduced agility and downtime

Agility of implementation and rapid adaptation are characteristics of high value in the software development process. Therefore, the outsourcing partner's mission is to meet the agreed schedules with methods that increase productivity so that the project is successful and delivers solutions on time.

Because outsourcing partners focus on continuous development and improvement of skills, professionals adapt and accelerate their deliveries very quickly, reducing downtime and increasing project performance.

On-demand availability

Available talent can be selected based on your current needs and deployed immediately to your project. This allows you to achieve superior levels of productivity and performance.

Technology availability is one of the fundamental pillars of service delivery. Outsourcing enables much higher availability rates without the need for large investments.

Experience in the segment

Outsourcing brings years of experience already validated in the field. All of this know-how is brought to your project, with updated infrastructure and best practices to add value to your customers and make their development more efficient.

Cost reduction

With an increasingly dynamic market and high demands on developers, the selection and qualification of technology professionals has become an arduous task. In addition, providing an attractive environment for this audience can be another challenge to overcome, with a high risk of attrition.

Outsourcing brings years of experience already validated in the field. All this know-how will be unified to your project, with updated infrastructure and best practices to add value to your customers and make their development more efficient.

All the work of verifying the candidate's knowledge, experience and professional competence requires time and resources. In this sense, outsourcing eliminates your company's concerns about recruitment, specialized training, equipment and shutdowns. All this is the responsibility of the partner company.

Security and efficiency

The leap to outsourcing can be intimidating at first, as one of the biggest concerns is controlling the assigned project. However, transparent and clear communication will lead to a relationship of trust, and once there is trust, development will be successful.

In addition, it is safer to hire a company that specializes in reliability, skill and experience. Finally, in this model, the process of selecting and developing high-level projects is already recurring.

What is the difference between Team as a Service and Outsourcing?

Outsourcing and Team as a Service are similar concepts, but each model has its own specifics to consider.

In outsourcing, the experts are managed by your company. In this model, the talents have a broad background in their segment to meet the required requirements. Your company is responsible for managing the team and the activities of the outsourced company.

In Team as a Service, the teams are managed by the contracted company, which is directly involved in the daily tasks of the professionals working according to the needs of the client.

How does development outsourcing work?

The outsourcing development process follows the following steps:

• Interview: evaluation of the professionals according to your needs, with the possibility of going through previous interviews with your team.
• Talent definition: after identifying the experts, your company will validate the compatibility of the professionals with the company's expectations.
• Launch: this is where the talents are prepared to act and add value to your project.
• Engagement: the outsourcing process is not limited to the delivery of talent. After the start, onboarding and professional engagement in your corporate environment are carried out.
• Technical, human and managerial monitoring: the company is responsible for accelerating the professionals from the beginning to the end of the project, accompanying the talents so that they develop in soft and hard skills.
• Follow-up: monitoring your company in all phases, seeking periodic evolution of your project.

Types of Software Development Outsourcing

The outsourcing models available on the market are segmented according to the region of the partner companies. Learn about the most common formats:

Offshore Outsourcing

In offshore outsourcing, software development is migrated to other countries. This model is characterized by language and cultural differences. Often, the offshore happens by the pursuit of technological advancement offered by a specialized service that is not available on national soil.

Onshore Outsourcing

Onshore outsourcing is done within the same country, state or city. This minimizes cultural and linguistic impacts and makes communication flow more easily.

Nearshore Outsourcing

Nearshore is the outsourcing modality that outsources teams of experts from neighboring countries that have similar culture and language. In addition, the partners are in the same time zone, which facilitates service delivery.

Who should outsource?

The need to evolve technologically has led many companies to outsource. This model is an excellent option if your company needs to increase trained technical support, validate a solution, or quickly increase the productivity of a project.

Fear of losing control of operations is one of the biggest concerns about outsourcing services. However, by bringing in professionals with the expertise and infrastructure to perform activities that support the business, outsourcing makes it easier for stakeholders to participate throughout the development process.

In a practical way, the company must opt for outsourcing when it needs to:

• Lighten its structure, reducing fixed costs with team;
• Strengthen new sectors with specific technical knowledge;
• Ensure more assertive deliveries that allow greater speed in decision making.

To count on outsourcing, it is essential that your company has technical and management maturity on the assigned professionals, taking responsibility to guide them in the processes. If you do not have a technical area or the necessary development know-how, this requirement can be met by the Digital Transformation Squads.

How do you choose the ideal outsourcing partner?

Choosing a supplier is an issue that deserves a lot of attention. After all, this decision can affect the entire operation of your project.

With this in mind, you should look for an outsourcing company that communicates actively and frequently, is well aligned with the needs of your project, has the necessary experience and skills, and ensures the protection of your company's information.

Outsourcing can work very well if the choice is based on the background and history of the services provided. In order to choose the best outsourcing partner, there are some comments that deserve the attention and care of the contractor:

• Turnover: the biggest enemy of smooth project execution. Changing professionals can be a waste of time and investment.
• Team selection: in addition to the basics of having competent people, make sure that the experts are in positions that allow for the best productivity.
• Soft Skills and Cultural Fit: professional retention is essential to maximize the effectiveness of project development.

Conclusion

To evolve in the technology market, your company needs to develop strategies to improve agility, scalability and innovation. With software outsourcing professionals, you already have the expertise you need to improve your projects. Understand what is best for your business at this moment and prioritize digital transformation for a bright future of your business.