Outsourced Product Development; Why it’s the Right Choice in 2022

The adoption of digital technologies in organizations has become less of a luxury in recent times and more of a necessity. Almost all industries are leveraging digital adoption paradigms to improve process efficiency, productivity, and end-user experience in various business units.

According to IDC, IT industry spending should have grown by 4.2% this year. This includes leveraging outsourcing partners. Moreover, The Global Digital Transformation Market is forecasted to grow 53% by 2025.

With these developments, it has become standard practice for organizations to partner with technology partners under the outsourced software product development services model. New frameworks and technologies evolve and are adopted across industries, which organizations focusing on product offering strategy cannot keep up with at a pace that makes them tangible experts in these technologies.

To have a workforce with hands-on expertise in technologies like cloud, AI/ML, edge, data analytics, AR/VR, digital twin, etc, an organization would need to leverage technology partners to augment these skills in their organizational technology expertise pool.

In this blog, we will take a deeper look at outsourced product development for independent software vendors, startups, industrial customers, and any other entity that wants to adopt digital solutions.

What is Outsourced Product Development?

Outsourced product development is the practice of delegating parts of or entire development to an external vendor rather than using internal resources. In practically every industry, leveraging outsourced software product development services is now standard practice. Software application development is the most widely outsourced IT function in the tech domain.

Outsourced software product development services can be of various types, and they are defined by the location of the client and outsourced team, the type of engagement between them, and the contract that has been agreed upon.

For example, onsite outsourcing is the outsourcing services provided to a company that brings resources to the client for a set amount of time.
Onshore outsourced software product development services, on the other hand, is outsourcing of development to a provider within the same country but outside of the client’s office premises.

Nearshoring refers to outsourcing to providers in countries with a similar time zone.

Just like outsourced product development can be defined by the location, it can also be defined by the outsourcing model the provider offers the client. For example, Staff augmentation, or team augmentation, is a software outsourcing approach that allows you to maximize the effectiveness of your in-house team while maintaining complete project control.

In a staff augmentation contract, you’re effectively augmenting engineering talent from your outsourcing partner for as long as you need it.

You can also decide the cost engagement models such as time and materials-based cost, hourly rate, or fixed price. Through these various flexible engagement models, software development organizations should realize that they get to decide completely on the degree of control they have over the outsourcing operations

According to Deloitte’s Global Outsourcing Survey, flexibility in outsourcing is the second most important factor when choosing a partner for outsourcing.

Now that we know what outsourcing is, let us understand why leading product development organizations choose to outsource at all. There are innumerable benefits outsourcing services offer software development organizations. Some of them are highlighted below.

Benefits of outsourced product development

Accelerating time to market multifold: The length of time it takes to develop an application is directly proportional to the project’s size and the specific business use case. While a native or cross-platform hybrid app can be created in a matter of months, a complicated platform that incorporates AI and machine learning could take several years to develop. Outsourcing an enterprise-grade application project to a technology partner can significantly reduce the time-to-market of a product that would otherwise take a long time to build internally.

Focus on core business activities: A business can focus more on the core business idea and activities such as brand building and research and development to provide value-driven services to its clients by outsourcing software development. When it comes to the technology side of software development, it’s best to leave it to the outsourcing partner, who can advise and guide business executives through cutting-edge technology trends like AI, data analytics, and cybersecurity in order to deploy the best-fit solutions.

Product Support and Maintenance: Businesses that rely on complex legacy systems and applications are frequently overburdened with software maintenance and support, leaving little time for the development and implementation of new software solutions. The best way to solve this problem is to product support to a reputable technology partner who can provide real-time system support, timely upgrades, and migration, all while guaranteeing compliance and security.

Outsourcing is a Strategic Differentiator: More businesses are turning to outsourced software product development services as a strategy, working with vendors and forming long-term partnerships with external teams all around the world.

Working with a specialized team with market expertise and experience provides long-term value–and may be the key to realizing the benefits of outsourcing software development.

Working with an outsourced team allows you to get to know each other’s working styles and communication methods, and your external staff will feel like a remote extension of your in-house team.

Leverage the latest tools and technologies: Outsourced software product development services grants you access to technologies and platforms that you might not have access to on your own.

This means you won’t have to invest in a slew of new tools, new staff, or the training necessary to get your team up to speed whenever you want to leverage a new capacity.

COVID is forcing companies–many of which are already in the midst of a digital transformation–to respond to customers’ increasing digital expectations, which is why gaining access to the latest tools for digital adoption can be done easily through trusted technology partners. According to Deloitte’s global outsourcing survey, organizations are looking for digital enablers like cloud technologies through outsourcing partners.

Outsourcing vs in-house product development

When a business demand is just transitory or no considerable expenditure is required, insourcing makes sense. When a company has to decrease expenses while still requiring professional employees, outsourced software product development services is an obvious winner. It used to be thought of as a luxury only larger corporations could afford. Today, businesses of all sizes use outsourcing to delegate management of non-core operations while saving money.

Despite the fact that there are numerous outsourced software product development services providers, it is critical to evaluate potential partners before entering into a collaboration. Doing some research before selecting an outsourcing partner can pay off in the long run and help you establish a long-term competitive advantage for your company.

Reasons to use outsourced product development

Outsourcing software development has a lot of promise and can be used as a method for reaching your big-picture business goals and overcoming your company’s biggest problems.

However, recognizing the potential benefits of outsourcing software development isn’t always simple or straightforward. Choosing the right technology partner that understands your business needs and can project professional expertise based on industrial experience is crucial.

If you are looking for a technology partner that is willing to understand your business offerings and end-user, and provide customized solutions in terms of outsourcing and engagement models, look no further than Pratiti Technologies.

Our craftsmanship model focuses on core skills and adding value at each and every level of the development process. It is much better aligned to Agile where each and every member feels responsible and accountable for the software project.

Contact us today for a quick discussion. With our offices in the US, UK, Germany, Singapore, and India, we would be capable of starting your digital transformation journey today.