How to Get Started with Software Outsourcing

What does Software outsourcing consist of?

Software outsourcing involves a company outsourcing software development needs to a third party outsourcing firm. The outsourcing firm is contracted to develop the custom software in accordance with the companies’ specific requirements and instructions. The outsourcing firm will establish the specifications, requirements, and deadline through a Service Level Agreement (SLA) with the hiring organization. Software outsourcing provides many benefits, including reduction of cost and the gain of expertise. However, hiring organizations must be careful to outline their specifications in clear detail to the outsourcing firm.

Software Development Outsourcing

Why a company should utilize software outsourcing

There are numerous benefits and advantages for a company outsourcing their software needs. The list below describes some of the ways that a company may benefit.

  • Ability to control costs of projects– By outsourcing, a company can agree to a set project budget with the outsourcing firm. The outsourcing firm must agree to the specifications and milestones of the agreement. This is an advantage to organizations because they can avoid the risk of exceeding budgets if they were to build a project internally.
  • Experienced workers– An outsourcing company will use a team that they know will have the skills and expertise to complete a job and more than likely already have these people on their payroll. Companies can avoid having to waste time interviewing and trying to find the people with the right skill set to get the project done.
  • Technological expertise consulting– Outsourcing companies will be able to provide a company with advice and consulting on the ever-changing field of technology. It is the responsibility of outsourcing firms to maintain an updated expertise on the field.
  • Reduce overhead costs associated with software projects– Outsourcing reduces the responsibility of companies having to deal with overhead costs such as human resources. Companies do not have to hire and manage employees for it nor do they have to deal with providing the staff with equipment or facilities.
  • Increase efficiency of company employees- Through outsourcing, a company can free up time for employees to focus on other essential tasks to the companies vision and profit centers. Furthermore, this may allow a company to save costs on personnel.
  • Accurate deadline for project completion- A company can set an agreement with an outsourcing firm to have the project or milestones of a project to be completed by a certain date. This is an advantage because if the software project is built in-house, then it risks being delayed by operations and daily activities.

Issues to be concerned with outsourcing software development

As with almost all the outsourcing options, software outsourcing has concerns that companies should consider when trying to decide if they should outsource their software needs. One of the foremost concerns is security. It is a large liability for a company to outsource software needs to a third party, especially if it is overseas. The company has no control over the security that the outsourcing firm implements, and they may be sending sensitive information that could damage the company or harm its reputation if exposed by security flaws. Furthermore, there may be different laws and regulations in foreign countries that perform outsourcing duties. Companies that wish to outsource software must consider the question of whether the outsourcing firm can be trusted, and if they have had security issues in the past. Larger, more established firms may be the best option because they will usually have strong security systems and procedures in place. Conversely, this security on some occasions is more in-depth and more reliable then the organization could provide in-house. However, they still lack overall control and responsibility.

Another large problem many companies may face with outsourcing software to a third party is that the outsourcing firm may not completely understand the requirements or needs of the project. This may be realized too late in the process, often when the project is finally completed. It is sometimes difficult for a company to accurately describe what they want in a project in enough detail for the outsourcing firm to complete the project to the hiring company’s expectations. Furthermore, by outsourcing, a company loses the potential to adjust the project through adding features or aspects that may become apparent over the course of developing the software. Companies lose control over the project by outsourcing and cannot manage employees.

Advice for Software Outsourcing

One of the most important and critical aspects of software outsourcing is establishing a clear understanding of the projects specifications and expectations between the company and outsourcing firm.  The hiring company should establish a specific and clear Service Level Agreements (SLA) with the outsourcing firm. In the SLA, the hiring company should define project specifications, availability, functionality, and performance of the project. Additionally, the hiring company and the outsourcing firm should establish goals and deadlines for meeting project completion. It may be wise to create a review period in the SLA that enables the hiring organization to have change requests and the ability to integrate new technology that the outsourcing company can provide. The SLA should also govern the security procedures and systems that are in place. The hiring organization may establish penalties for information that is not correctly secured.

A hiring organization should read testimonials, conduct research and ask other customers about their experience with various outsourcing firms. They should pay special attention to whether or not the outsourcing firm has the capacity to stay up to date with the software technology industry. It may be wise for the hiring organization to ask what industry publications that they subscribe to and how they plan to learn and adapt to the ever-changing field of software technology.

Software outsourcing companies

There is a multitude of software outsourcing companies that offer many software development services to a range of industries. Many of these companies are located offshore or have offices located offshore with the headquarters being located in the U.S. The following three companies are some of the leaders in the software outsourcing industry.

A-1 Technology- A-1 is a New York based software development outsourcing company. A-1 has additional locations in Florida, Los Angeles, New Jersey, Toronto, Stuttgart (Germany), Singapore, and India. They also offer offshore software development that provides custom application development as well as mobile application development. A-1 offers expertise in the areas of dot net programming, RIA/Web 2.0 (flash, flex, Ajax), Google TV, Linux programming, quality assurance services, and Apple TV.

DataArt- dataArt is a custom software development firm that caters to the fields of hospitality, financial services, healthcare, and other industries. DataArt has software engineers located in New York, London, Russia, and the Ukraine.  DataArt can offer services for Microsoft .NET, Microsoft SharePoint, Microsoft CRM, Java, Cloud Computing, Unix/Linux, and mobile platforms- Symbian, iOS, Android, J2ME, and RIM.

TatvaSoft- TatvaSoft is a software outsourcing firm located in India. They service industries in many fields, including Oil & Gas, Retail, Finance, Sports, insurance, and enterprise solutions. They offer application development, web development, .NET development, Silverlight consulting, PHP programming, Flex programming, SharePoint consulting, and application maintenance.

Software outsourcing for the little guy

Companies are not the only ones that need software outsourcing. Smaller organizations and individuals also need it done. Since software and programming is not a physical product, it is very easy to have it done by anyone, anywhere. Individuals can utilize freelancer sites to utilize quality workers internationally at reasonable rates. No job is too big or too small.

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