Outsourcing. It’s been a buzzword for years. When business owners need tasks and projects accomplished and don’t have the staff, they outsource – everything from building websites to recruiting personnel.
The latest trend for IT projects and one that promises to grow almost exponentially throughout 2017 is outsourcing software development and using offshore developers in the process.
What To Expect
Recently, Deloitte released the results of a survey on outsourcing that provided a pretty comprehensive look at who is outsourcing, what is being outsourced, and the growth of outsourcing in 25 separate sectors. Sectors ranged from consumer and industrial products to finance, healthcare, IT and media. Respondents included leaders of company legacy functions, including IT, HR, finance, etc.
In terms of what was outsourced IT had the highest percentage – 72%. Outsourcing software development has become a popular and increasingly utilized activity for businesses.
The report also noted that in every sector surveyed, outsourcing has increased an average of 20% between 2014 and 2016. When respondents were asked if they would continue to increase their use of outsourcing, the clear majority said yes.
Respondents also commented that, in the beginning, both sides were unsure about how offshore team management should work and the types of relationships that should be developed between a business and an outsourcer.
As outsourcing has matured, however, best practices have been hammered out, and the path to success is on strong footing. Now, there is enough of a comfort level so that business leaders are confident about how to hire a remote development team and how to move through the project process successfully.
Reasons to Hire a Remote Development Team
One very important element of the Deloitte survey were the reasons given for why to hire a remote development team. The stats tell the story:
- 59% stated it was a “cost-cutting tool.” Hiring the right team means that permanent staff does not have to be employed to provide the desired software development. And, going offshore taps into exceptional expertise at a much cheaper price. Hiring in-house is hugely expensive and not just in terms of salary. Health insurance costs alone can be exorbitant.
- 57% stated that outsourcing allowed current in-house staff to focus on the core aspects of the business. Consider CRM software development, for example. While a small in-house IT team might have to spend months totally focused on developing such an app, other IT functions, such as logistics, inventory control, and project management, not to mention upgrading databases, etc., will take a back seat and can impact the business’s bottom line. This was the second among the most important reasons to hire remote workers.
- Another 37% said that using a remote development team solved capacity issues. Other reasons included the need to enhance the quality of company services as quickly as possible, and the critical nature of business needs that required expert and relatively rapid “fixes.”
- “Access to intellectual capital” was a reason for 28% of the respondents. They simply had come to understand that there is amazing expertise all around the globe and see great benefits in tapping into it.
The Other Elephant in the Room
One thing that legacy function leaders have struggled with is just how to hire a remote development team. After all, HR manager is not a techie. So how do they go about finding a development team? And, after that, how does one manage a programming team when he is not himself a techie? Add to that the fact that this is a remote team, possibly halfway around the globe.
The important thing to remember is that you are not the first person to “come to this dance.” Many are successfully employing and managing remote workers and doing so very successfully. There is literature with best practices outlined; there should be conversations with others who have successfully outsourced development work. The resources are there, so that legacy managers can learn and ultimately become knowledgeable of the process of employing a remote team. Some of these “best practices” include:
- Knowing exactly what you want an app or piece of software to do. You don’t have to be a techie to identify these things.
- Researching the background of a firm you are considering. How much experience do their developers have with the development of the type of software you want?
- Checking references of firms you are considering
- Ensuring that any remote team will have a project manager with whom you will communicate on a regularly scheduled basis and that video conferencing with the entire team will also occur.
- Getting legal advice on the terms of the contract you and the remote team develop to ensure that your interests are protected.
- Establishing timelines for an MVP and the additional features that will be added.
- Ensuring that you will have the after-development training and the support you need when there are issues and glitches.
These are just some of the considerations once the decision to employ a remote development team is made.
Remote Development Outsourcing is Not Going Away
If the Deloitte survey showed nothing else, it did come away with some very basic conclusions about remote outsourcing. In our increasingly global workplace, businesses have found that they can find the development expertise they need in faraway places and that technology allows hiring and managing that expertise successfully. They understand the advantages to be gained, and all respondents indicated that they will be increasing their outsourcing in the next and future years. Because these survey respondents come from virtually every sector of the economy, moreover, we can conclude that outsourcing will be a pervasive and permanent practice.
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