Outsourcing, as a format of cooperation, gained popularity in the mid-2000s in the United States. During the startup of the first prototypes of social networks, developers needed to scale their applications in a short time. In conditions of multitasking, it is important for the team to accumulate strength on conceptual tasks and not be scattered on routine work. In this case, an experienced outsourcing software development company will help.
Financial considerations should also be taken into account. Hiring a programmer from the CIS countries was 3-4 times cheaper than recruiting staff in a developed country. It was possible to save money even on the condition that the employer would have to “pump” a specialist, that is, train and invest money in his development. Numerous related payments in the form of insurance, vacations and other social guarantees simply do not apply to the outsourcing of a specialist.
Benefits of the outsourcing software development company
In addition to economic benefits, outsourcing is remembered for many advantages, most of which are still relevant today:
- Product development with minimal in-house team involvement. The execution of assigned tasks is transferred to the outsourcing team, at the same time, the released staff can perform more important work.
- Involvement of highly specialized specialists in the team. Educating an employee is quite expensive and time-consuming. It is easier and cheaper to hire a specialist to perform specific business tasks and not incur losses during downtime.
- Saving. Perhaps the most significant advantage. In terms of costs, outsourcing a team is more profitable for two reasons. First, outsourcing pays for the implementation of a specific project, and the terms of cooperation can be documented in the contract. Even if an hourly assessment of work is applied, there are much more opportunities for a remote employee to apply pressure. Secondly, payment is charged only for the work performed in accordance with the terms of the contract or verbal agreements. In practice, this means that downtime is practically excluded and the customer pays for a specific result.
- Increasing efficiency. Getting rid of the routine means freeing the right “hands” for more meaningful work. This is a simple and effective formula for increasing team efficiency and performance.
- Minimization of expenses for personnel records management, corporate events, and training. A remote employee works for himself, which means that he does not need motivation. The terms of cooperation are prescribed in the contract and the customer needs to fulfill the agreed obligations, no more.
- Lack of formal employment. In fact, this is a rather painful issue for small companies from developed countries. To hire a specialist from another region of the world, you need to go through a lot of legal delays: from a guest visa to an employment contract. For the outsourcing format, these chores are not important, since employees work remotely.
Under external management, it is appropriate to give technical work, accounting services, and legal services. It is believed that the transfer of conceptual tasks to the side negatively affects the business and indicates the incompetence of the owner. At the same time, accounting work can be entrusted to a trusted contractor, because studying financial legislation will take a lot of time, and time, as you know, is a very valuable resource. However, like any other communication format, outsourcing software development has its drawbacks.
Disadvantages of an outsourcing team
An external contractor performs the same tasks as a full-time employee, while this communication model has its drawbacks. The main disadvantage is the risk of poor-quality work. In the IT sphere, the real potential of a product can be assessed only after the official release, when feedback is received from customers.
If technical support is not specified in the terms of the contract and the contractor leaves home after the project is completed, then the customer has no choice but to accept the work if it is done properly and pay. At the same time, if after the delivery there are bugs, all claims can hardly be presented to the contractor.
With all the disadvantages, the advantages of outsourcing cooperation prevail over the disadvantages, which ensures the wide popularity of outsourcing in the world. You can read more about this here: https://digitalsuits.co/services/digital-product-development-company/.