Why Tech Startups Should Consider Outsourcing Development

In a world in which technology is at the forefront of just about everything, it’s fair to say that things are fairly competitive and entering space is rather difficult. This is a fact that several startups can attest to, which is why to effectively create and launch anything, they will outsource their ideas.

It should hardly come as a surprise that people might be skeptical about taking this path to enter the market. However, there are several reasons that suggest the opposite, according to N-iX. In this piece, let’s not only look at outsourcing development in the tech space but also get into its significance to startups and, in doing so, highlight the reasons why companies outsource talents.

The startup’s journey

Outsourcing means giving the reigns of your startup’s development elements to a third party. This completely goes against the standard path, which may see a startup do the build themselves, also known as doing it in-house. Now the choices made between either path have to consider the nature of how the project in question develops, which means thinking of the following:

• The requirements of the prototype and how you wish to grow and scale it
• How you wish to fund it in conjunction with the type of startup you are, bootstrapped or otherwise
• How quickly do you want it released into the market, deadlines and so on
• How much expertise the teams hired may have, including industry knowledge

Why third-party development is the way to go

With the above in mind, arguments can be made for and against either type of development for startups. Doing it in-house, for example, may be worth considering because it puts you entirely at the helm. This means that you can closely monitor the project, easily access those working on it and ensure that it fits what you intend.

Having said that, in-house creation does have some issues that outsourcing software development can very much cover. The most notable in-house weaknesses vs outsource are the following:

Seeking the necessary personnel

A key thing to think of when choosing a path is the nature of the personnel hired. If they are an in-house team, they have to be sourced, vetted and hired, which is a process that can be rather time-consuming, eventually taking away from the creation process. This problem is one that outsourcing can help with as it sees teams likely to be already vetted and trustworthy.

Another area in which in-house seeking of personnel is lacking is in the fact that the pool of professionals available to you is rather limited to your area. If you go with the software development outsourcing route, the talent pool of IT professionals available to you is not limited at all and reaches a global scale. This means that you have available to you, a wider array of expertise, which may lead to a greater result.

Accompanying expense

In-house teams are also more expensive to finance than the outsourced alternatives. This is because various elements of the development process are more expensive if done by the organization. These things include the following:

• The hiring of the personnel, who, if in-house, may have higher rates in your region
• The training of said local personnel
• The acquisition of all the tools, space and other necessary elements that lead to higher expenses
• The provision of employee benefits such as health insurance and paid leave
• The managerial expense of overseeing the complex development process and the teams involved

If you decide to outsource your work, pretty much all the above can be taken advantage of to reduce costs. For example, lower rates may be available in other regions in which you choose to outsource, something that is only made better when you consider the fact that no tools, space or other expenses come into play.

The launch time

As stated earlier, the process of hiring personnel and managing them for an in-house job is going to be quite taxing, particularly as it pertains to resources and time spent. The latter bit is specifically tailored to startups, as their prototypes not only have to be built.

They have to be tested and improved on promptly as well and the time taken to hire and vet an in-house operation isn’t conducive for quick launches. Because outsourcing essentially removes or at the very least lessens the time spent, the launch, public analysis. As well, the future perfection of a project can be done far quicker.

Things to be cautious about

The above clearly shows that outsourcing development, particularly for a startup that may not have great funding, is a worthy choice. A clearer sign of this would be to simply follow the stats, which show that IT outsourcing as an industry is growing and will continue to do so for the foreseeable future. With all that in mind, it’s only fair that the not-so-helpful elements of outsourcing are highlighted, so you have all the facts, in case you’re considering it.

The main con is the fact that you wouldn’t have easy access to the hired team, which means that you can’t oversee any progress, or development efficiently. In essence, communicating any developments between you and the hired developer would be difficult due to a lack of direct contact.

This is something that is compounded by the fact that the mode of operation of the hired team may vary from what may be ideal for you and you wouldn’t easily communicate your displeasure. For this reason, the communication aspect should be dealt with as soon as possible so work can be efficient.

Final thoughts

A tech startup looking to create a quality product can go about doing this in several ways and as the above has shown, there are reasons why outsourcing is a popular route to take. This piece highlights a few key areas that push startups towards outsourcing to create and launch their products and these are the inexpensiveness, wide talent pool and quicker launch time.

These areas are ones that any in-house operation would suffer from, hence the move away from it. Despite the benefits of outsourcing, it does have its drawbacks which should be considered carefully. If that’s done, then startups can properly proceed.