Small software companies have different needs and challenges than larger ones; their resources generally are lower, and they need to deliver faster and better to compete with the “big players.” If you manage a small company, even in the software field, that’s not news for you - but where does software outsourcing come into place? Previously, we talked about the pros and cons of in-house software development and software development outsourcing. Still, we believe more focus is required on small companies' specific context and why software development outsourcing can propel them to the next level.
Based on our experience working with companies of all sizes and across the globe, we put together the most essential benefits that small software companies have while outsourcing development work - this way, if you’re looking or considering doing so, you’ll have the right picture of what outsourcing can bring to the table.
Firstly - What is software development outsourcing?
Simply put, you transfer the work and development responsibility to another company. That implies they need the tech, resources, and know-how to develop, launch, and even maintain the software solution in your name. If you want to learn more about efficiently and adequately outsourcing software development, read our in-depth guide here.
1. The Holly Grail of small software businesses - lower costs.
The first and arguably the most important benefit of outsourcing software development as a small company is related to lower costs. There are multiple reasons why this can be true for your business as well:
- You only pay for the actual work: There is no need to budget downtime while outsourcing; you only pay for the work that was made, nothing more, nothing less.
- No administrative costs: While outsourcing, you don’t need to worry about costs related to office rent, employee devices (such as laptops, licenses, etc.), benefits, etc.
- No recruitment and onboarding costs: This is usually overlooked by most small software companies, but it actually has one of the most significant economic impacts. Recruitment processes often take a lot of time and effort to find the right experts with the right mindset and cultural fit. Onboarding can take even a few months, in which the new employees accommodate themselves with the projects and culture, thus having a lower input. While outsourcing software development as a small company, you won’t need to worry about this.
- Flexibility - No matter if your in-house team has something to work at or not, they still require to be paid - with outsourcing, when the project is finished, you can choose to pause or even cancel the collaboration for an undetermined time frame.
2. Faster development and product launch
If you’re on a tight deadline, which is probably true for any small business, having the opportunity to test, reiterate, and launch quickly can give you a considerable competitive advantage. While outsourcing, you can request your software development outsourcing company to plan accordingly for your precise deadlines, thus involving more resources in a shorter time frame to speed up the process. For small software companies, when developing in-house, that’s not a scenario they can apply because they’re limited to their internal resources - thus hitting a threshold.
3. Lower risks - better overall results
Risk management is critical when deciding if you want or not to outsource as a small software company. In our experience, outsourcing lowers risk from two perspectives:
- Firstly, because you have a contractual relationship with the outsourced development team, they are responsible for the final product quality and meeting the specified deadlines.
- Secondly - with outsourcing, you have access to better or more diverse professionals, and you get the best people for your project much more effortless. For example, if your project involves creating a professional and modern user interface, having a team of senior UI/UX designers with hundreds of projects behind certainly reduces the risks of delivering an uninspired user experience.
4. The freedom to do what you do best
If you’re a small company, chances are you would love the freedom to focus on what you do best. Even if you are a small software company, you might be niched in web development, design, or system architecture, making it difficult to undergo big, complex projects that need professionals from all sides (architecture, testing, design, etc.). Outsourcing software development means you could externalize the parts you don’t enjoy the most to another company that loves doing that side of the project. That’s a win-win situation. For companies not in the software field, things look even more evident because the only viable options are trying to create an in-house software development team that requires a lot of resources or outsourcing the project to a specialized company so it can focus on the things that matter.
5. Better and broader technical talent
Think about this with a different optic - imagine you manage a basketball team, and you can only sign players from the same league you’re playing, but others from the league can sign players from anywhere globally. Who do you think will have a better chance of success in the long run? Outsourcing practically means the same thing - you can acquire the best technical talent, no matter the tech stack that would work for your project. Trying to do so with your own internal team is extremely difficult and expensive because you might need the best software developer in PHP for one project, but your next one might not require such a proficient one. Outsourcing software development for your small software company gives you the best talent in a flexible manner.
6. It gives you a competitive edge
The last benefit we focus on is a recollection of the above. Ultimately, having the ability to lower your costs while developing and launching faster with better human resources means having a competitive edge in your industry. That is the first side of the coin. The other side of the coin is that 30% of US-based companies already outsource at least one function, which means that not considering software development outsourcing for your small business might put you in a disadvantageous position.
So, what are the best benefits for small software companies that outsource development work?
There are multiple benefits to consider, from lower costs, decreased risks, faster deployments, having access to a better and broader pool of talent, and having the opportunity to focus on what your business does best. Ultimately, the real benefit depends on your company context; thus, not all benefits discussed above might apply to you. Furthermore, certain benefits have a different weight for some companies; while some might focus on cost efficiency, some might focus on delivering the absolute best in their industry, with costs falling in second place.
To find the best countries you should consider for software development outsourcing, check our in-depth article here.
Supercharge your small software company capabilities with outsourcing.
If you consider outsourcing and at least some of the above benefits made you smile, know that Ontegra is a full-cycle software development company that can take the ropes of any of your projects, no matter the challenge - all this while making things a bit different with a focus on transparency, building relationships and trust. Get in touch with us and request a consultation meeting.