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What is Outsource Software

A business can choose to outsource a number of different functions from their organization like customer service, payroll, human resourcing, and in this case software development. This is often pursued so that an organization can achieve cost or efficiency savings, ideally both.

Outsource software is having an external organization develop custom applications, integrations, or customizations for your team. Traditionally the term is more commonly thought of  as having a service provider design, develop, test, and deploy your tailored software. Organizations may sometimes look to outsource their software development when they are low on resources or simply need to determine product feasibility without the headache of politics and organizational scrutiny.

By no means is outsourcing software a silver bullet to organizational or industry challenges but it becomes increasingly feasible as the technology demand for resourcing changes as well as organizations. In fact readers are encouraged to review the advantages and disadvantages of custom software to get an idea of what are the trade offs in general. It is important to determine whether an organization wants to lead with technology and how to get there. From a technical and business perspective here are the 20 things you should know that can make outsource software work for your mandate

1. Cost savings: instead of paying for employee benefits, vacation, office space, and equipment focus on investing in a product or software innovation that can really make a difference. Even if hiring from the same country a company can stand to save significantly by hiring externally.
2. Expertise with technology: given the varied systems designed by an outsource software team the diversity of technology expertise is often more comprehensive than an individual organization including: development frameworks, infrastructure, architectural patterns, or micro services options
3. Expertise with industry best practices: outsource software teams can utilize best practices insights employed in other industries to benefit clients from adjacent or non-competiting fields
4. Expertise with functional best practices: having a team thats worked on a blend of core (i.e.retail operations, product development, customer service, and global trading system) and supporting systems (HR, payroll, finance, office administration) provides insights into developing unique software
5. Find leading practices: building software will often allow organization to standardize and automate their processes meaning innovative ways to deliver what is important to your stakeholders in a more efficient way

   

6. Focus on your core business: simplifying technology management using an external software engineering team enables greater focus on organizational mandates
7. Simplify and reduce HR costs: a full time software developer can cost up  $100/hour CAD not to mention the time spent by staff on scouting, recruiting, interviewing, and retaining premium resources
8. Time savings: for established organizations delaying the development of a platform can be costly for revenue and industry leadership, while for start-ups the set back of a few months in finding a tech co-founder could make or break your market entry
9. Benefit from modern delivery approaches: outsource software engineering teams utilize the latest delivery approaches because engineering is their bread and butter and core business of these organizations
10. Optimize for technical debt: have an experienced designer manage the headache of determining a purposeful solution versus the maintainability of the code
11. Orchestrate your applications: given the right partner, get advice on efficiently utilizing a wide variety of applications to benefit stakeholder needs rather than what is convenient for the operations team
12. Focus on innovation versus political inertia: sometimes an organization isn’t ready for change, but a proof of concept or innovative idea has to move forward, leading to a “skunk works” or an under wraps R&D project achieved by outsourcing software development
13. Full retention of data for strategic insights: creating your own application can allow clients to have full retention of their data as opposed to having it kept by a packaged software vendor.
14. Ability to drive savings by choosing hosting and infrastructure providers: organizations can choose who should host their applications once complete, taking advantage of market forces when new cloud infrastructure providers show up
15. Achieve alignment to overall technology ecosystem: an experienced outsource software team can ascertain the right technology stack to ensure the system can integrate effectively into an existing technology environment
16. Simplify the process of being a technology leader: using an outsourced engagement can help reduce the complexity of becoming a leading industry organization through the use of technology, by focusing on developing business capabilities first rather than being bogged down by technical issues
17. Scale to meet global requirements: outsource software can introduce technical skillsets that create applications that work globally with 99.99% uptime at high velocity
18. Single point of contact for accountability: work with a single contact instead of wrangling multiple developers or technical leads internally
19. Greater control of security: since one vulnerability can lead to a domino effect, having control of your application’s security is essential in combatting cyber security risks
20. Reducing incentives for hackers to bypass software security: when compared to utilizing a cloud package in which the payoff to hacking a cloud software is enormous, creating a custom application may deter hackers due to limited ransom values

Real Lessons Learned from Outsourcing Software Development

Here are some latest insights from managing an outsourcing software engagement to ensure success while managing

1. Be clear about your technology stack and stick to the plan: changing technology or even programming language during an outsource development engagement can cause significant delays and increased costs
2. Know what you are building: having clarity of what business outcomes are being accomplished is just as important as how the system is designed, often times organization may build without being clear of what is expected or valued by their stakeholders
3. Quality versus rock bottom price trade off: be wary of ultra low pricing for app and software development quotes (i.e, in the range of $20/hour or less) especially if you are planning to scale or create a new business around the software. The likelihood of needing to rebuild (refactor) the code is high meaning schedule delays, increased costs, or at worst case an entirely abandoned program or start-up
4. Understand the cadence and delivery method: ensure that you are comfortable with the schedule and how often software features are demonstrated and showcased as this can help provide clarity and direction to what is being built
5. Commit your team to providing timely input and clearing road blocks: clients often struggle with making decisions or garnering stakeholder input in a timely fashion, this can often derail a project

Learn more about Outsource Software

Learn about the latest developments in software outsourcing and the take aways that could mean large gains in efficiency and digital transformation. Click on the banners below to read further.

Mindfield Consulting Canadian Outsource Software Providers

Mindfield serves clients with unique requirements and a focus on quality. We’ve been helping organizations with unique custom software and software outsource engineering for nearly two decades. Our team asks the tough questions before building technology as we consider the architecture and business sustainability of your requirements. Together with our clients we build meaningful technology that lasts.