Should startups outsource software development seems like a tough question to answer. The costs that are made upfront or kept in escrow might seem like a burden, especially when you don’t have your product in hand.
There’s also a bit of a learning curve and trust issues with outsourcing.
However, the issues discussed above are actually one of the biggest advantages of outsourcing. Even some of the industry giants actively pursue outsourcing, on a regular basis, or have done that in their startup stages.
Ahead, we will see how, and why we claim the concerns raised above are the strengths of outsourcing.
1. It Is Super Cost-Effective
Startups often have to struggle with being on a tight budget (well, don’t we all have to?). But the good thing about outsourcing is that it eliminates the need for hiring and maintaining a full in-house development team.
You won’t have to deal with the issues of renting the space and hardware, nor would you have to invest heavily in salaries and benefits.
Talking about salaries only, without all the benefits such as healthcare and retirement plans, Indeed lists $116k/year as the average salary for a software engineer in the US.
Now for some quick Math, on a 40-hour work week, 160hr/month, the hourly rate comes to $725 per hour.
For outsourcing, on the other hand, the average spending per employee in the IT outsourcing market is about $360, according to Statista.
You can save up to $365 every hour!
2. Even The Industry Giants Outsource
It is no secret that Google outsources work to remote employees. They outsource everything that ranges from software development to IT work including virtual assistance and email support for AdWords.
Imagine them having to outsource 10,000 calls per week; you don’t have to because they were doing it back in 2011 with 1,000 representatives in over 60 countries.
Alibaba, a Chinese company, had remote developers in the US who helped build their website.
Additionally, several tech startups, including WhatsApp, Skype, Slack, and more, employed outsourcing to help them get to where they are today.
That just says that outsourcing is not only for industry giants but also for tech startups on their way to becoming industry giants. Read more on outsourcing examples by clicking here.
3. Gives You Swift Scalability
For startups, time is of the essence, and they may need to accelerate the development process. This is especially true in the beginning phase if they want to gain a competitive edge.
With an outsourcing partner, you can leverage their experienced developers to speed up the development process.
You can even outsource project management, so you get a smoother workflow, and you don’t have to worry about the learning curve even after being new in the competitive business world.
Furthermore, if there are ever fluctuations in business needs and demands, which startups often experience, outsourcing has the flexibility to scale operations accordingly.
The concerns that might seem scary for startups to start outsourcing are actually gigantic blessings in disguise.
You can take examples from industry giants and learn from their experience about how they leverage software development outsourcing.
And if you do take that route, you can access the skills of a wider pool of experienced professionals at better costs, while always being flexible enough to scale up or cut down on resources.