5 Key Reasons Why Successful Companies Decide to Use Outsourcing

5 Key Reasons Why Successful Companies Decide to Use Outsourcing

Nowadays, outsourcing can be among the most effective assistants to your business during the different phases of its growth. That can be proved by many large companies worldwide that outsource some critical tasks to other regions and countries. Deloitte reports that organizations spent over $700 billion on outsourcing activities in 2022. Aiming to maintain stable growth and ensure appropriate productivity, they try to balance internal staff and outsourced resources.

If you want to know whether outsourcing is a perfect march for your company, you should understand why other businesses select this model. What benefits can it bring to your projects, and what extra value can it provide? Below, we will explore five reasons why organizations of different sizes opt for outsourcing to satisfy their needs. 

Why Consider Software Development Outsourcing?

Outsourcing software development projects may provide great advantages, enabling you to focus more on core business tasks and income generation. So, let’s dive deeper into the primary reasons for partnering with an outsourcing vendor. 

Reason 1. More Capital for Further Business Growth

Although you may regard it as a well-known cliche, the fact is that cost savings are vital for each company with an objective to grow. But at the same time, that is important for evolving and maintaining the company’s presence and increasing its market share. Thus, you have a chance to free up some capital and invest it in other critical business aspects. 

Money savings, along with avoiding significant expenditures, are especially crucial during the first steps of software development. The good news is that leveraging an outsourcing model can help you achieve it properly without compromising project quality. 

In addition, outsourcing can be advantageous if your company is seeking the required funds for your project. That is because a potential investor can show more trust if they know about your plans to reinvest money into business areas generating income. 

Reason 2. More Focus on Core Business Activities

Delegating tasks to your outsourcing partner is always a wise step, which helps business owners and C-level executives free time for more critical tasks. The latter should focus better on the company’s expansion and efficient functioning instead of managing all operational aspects. Such an approach refers to each CEO or CTO within different industries. And since all people need time and a proper environment to leverage their key abilities and knowledge, outsourcing may come in handy as a strategic option. 

Moreover, many organizations provide customer service, which is an inevitable part of their activities. But the truth is that it is often time-consuming and frustrating for the internal team. In this case, cooperating with an outsourcing vendor who will maintain your customer service offers two great advantages. The first benefit is providing your clients with ongoing support. Meanwhile, the second benefit is that your in-house team can concentrate on their tasks, promoting your company to run more effectively and increasing return on investment (ROI). 

Reason 3. Access to Experienced and Expert Talents

Companies regard software development outsourcing as a cost-effective and, at the same time, reliable approach to get tech-related expertise they may often lack in-house. Thanks to a trusted outsourcing vendor, you are confident that all specialists have experience working with the required tech stack and addressing relevant issues. Thus, they can identify specific problems immediately, find the best solutions, and apply their strategies more effectively than inexperienced internal staff. 

In addition, when outsourcing software projects, your business gains access to professionals focused on specific areas or techs. Their qualification and knowledge will allow you to spend fewer hours determining the root causes of various technical issues. That also results in money savings for your company because of quick problem-solving capabilities.

Outsourced software development services are especially advantageous for organizations that must focus their resources only on the core offerings. That is because concentrating on one area of expertise promotes more efficient quality assurance/quality control (QA/QC) and helps meet regulatory and industry standards. Finally, an outsourcing model is a good option for small businesses that operate with tight budgets and limited human resources. They can complete the job without dedicating time and resources to particular tasks. 

Reason 4. Higher Levels of Flexibility

Unsurprisingly, your company may require a different number of employees during the whole year. With outsourcing, you will obtain the desired level of flexibility. It means you can scale up or down your external team if needed without hiring in-house staff, which is costly.

Fortunately, a reliable outsourcing partner can meet your scalability needs and provide enough flexibility to stay competitive in the modern, fast-paced market. In this case, an outsourcing model brings the following pros:

  • continuous help and support
  • services adaptable to changing client needs
  • better responsiveness
  • more resources to focus on growth 
  • competitive edge 

Reason 5. Better Productivity and Increased Efficiency

If your business aims to improve productivity, software development outsourcing is your option. Using this engagement model, companies can forget about the burden of maintaining an internal tech team and focus on more crucial competencies. Since your vendor manages infrastructure, updates software, and ensures robust security, you get more time to leverage innovation and enhance business operations. 

Besides, an outsourced software development team has specific knowledge and skills in respective fields. Thus, they can guarantee faster delivery of project outcomes, which also boosts productivity significantly and results in operational cost savings. 

After all, increased efficiency is among the key benefits of outsourcing, too. That is because your partner can simultaneously work on many projects throughout various stages. Implementing such an approach within your in-house team is impossible as they must divide their work time between numerous tasks. So, it is better to leave them focused on more critical tasks and ensure their high-quality performance from start to finish, while an external team will feel comfortable multitasking. 

Some Other Reasons for Outsourcing to Consider

Apart from the essential reasons mentioned above, there are also other factors that may help you decide on outsourcing. Let’s check them below:

  • Quicker start of new projects. Starting software development projects is often daunting. That is why many of them require adequate support from an expert team. With outsourcing, your project becomes less costly and has a higher chance of successful implementation. Also, you get confidence that all deadlines will be met and all expensive complications eliminated. For example, an outsourcing model benefits those working frequently on product upgrades. 
  • Improved data security. Information security is among the key concerns for lots of organizations these days. However, a trusted outsourcing partner remains updated with the latest tech trends and practices to ensure robust security and protect data. 
  • Data backup and recovery. Guaranteeing the reliability and efficiency of information backups can be vital for your business since data breaches or losses may result in lost clients and profits. With a professional outsourcing vendor, you get secure backups of all the information within your company. They protect your data from hacker attacks, unintentional deletion, etc. 
  • Increased customer loyalty. With properly trained and qualified customer service staff backed by experienced managers, your clients obtain high-quality support. That enables them to come back to your company again and again. However, achieving that in-house is challenging because of the financial strain and lack of relevant expertise. Thus, outsourcing the particular services to an outsourcing partner will make your clients feel appreciated and satisfied, which increases their loyalty. 
  • Compliance with industry requirements. Sometimes, emerging industry rules make significant financial impacts even on large enterprises. Meanwhile, almost all industries have their data privacy and security regulations. Following them requires additional costs to maintain specific staff. And if your company violates such rules, it must be ready for severe consequences. Therefore, you should look for a vendor compliant with industry standards to avoid potential lawsuits and penalties. 

Final Word: What Is Next?

To conclude, software development outsourcing can offer many vital advantages for your company, from money savings and focus on core business competencies to access to the required tech expertise and greater flexibility. All the reasons you have learned in this article will help you better understand why outsourcing is such a popular engagement model.

But despite the reason your organization may have, you should follow these simple steps to ensure your outsourcing activities will bring positive outcomes:

  1. Examine your current operations to determine the areas where an external team will come in handy.
  2. Identify the tasks or projects you can seamlessly delegate to an outsourcing partner. 
  3. Review various outsourcing vendors available in the market, analyze their portfolios, check references, and learn more about their tech expertise. 
  4. Select the company you trust the most to get the desired results. You can start the cooperation by delegating small tasks and gradually expanding the scope of project work. That may provide you with more confidence in a chosen partner. 

Are you considering outsourcing your software development project to a reliable vendor? Contact us today, and we will discuss how AgileVision can help you achieve your business goals and meet project needs effectively.