Why Outsourcing Software Development is a Good Idea
Updated: Jun 11, 2020
Outsourcing software development to a third-party provider is a great way for companies to maximize their return on investment and get the business software they need. While it seems like it would be cheaper to hire software developers to work internally, oftentimes, outsourcing software development is a better option.
Whether it's big data analytics, warehouse management, data management, native cloud apps, manufacturing measurement, or process optimization, many businesses need custom software to manage these crucial day-to-day operations. The business can hire internal software developers onto their payroll, or they can work with a third-party vendor to fulfill their needs.
Good Software Development Isn't Easy
One of the biggest problems with software development is that you can spend a lot of money on it and not get the expected returns. Budgets burn fast, and if your team isn't well-calibrated and good at what they do, you can find yourself in an unhappy place very quickly. One of the reasons software development is hard is that there are so many different ways to solve any given problem. There are a thousand different ways to implement a solution, and while there is normally no one right way, there may be plenty of wrong ones.
If you don't have great teams and stellar technical management, you can end up with software that doesn't do what you need it to do or what you expected it to do. Your software may be over-engineered or under-engineered. Your software may be unreliable and buggy. And in the worst case, your software may allow bad data to be created. And that just ruins everybody's day; if your data is bad, everything else can go down the drain.
For example, bad data can lead to faulty decisions, and the results of those faulty decisions can be devastating. Bad data can lead to unhappy customers or unhappy employees. One leads to lost sales and the other leads to higher turnover and increased costs. The list goes on, but all of it leads to lower profits.
Building custom software well requires a lot of experience, industry knowledge, continuous training, and a team that gels well together. It's hard to do because software developers are notoriously finicky and temperamental. And if you are not an expert at managing them, you could run into a lot of problems.
You could experience high attrition. You could find yourself with extra features and capabilities you’ll never use. Or your team may cut corners, incurring technical debt that never gets repaid, so that they can meet an arbitrary deadline. There are a hundred more examples, but each of these things will cost you more time and money in the long run. If you're hiring senior software developers for $100,000 – $200,000, you're spending a lot of money on software development. You need to make sure it's being done right.
If you're not used to working with software developers, or if you don't have someone on your leadership team who specializes in managing software developers, you could easily spend $1 million and never realize your investment.
Software Developers Should be Software Experts, not Industry Experts
Software development, especially the work we do at Elegant Software Solutions, doesn't require vertical expertise. We don't have to be experts in inventory management, supply chain logistics, or healthcare systems. It may help, but as long as we have expertise in our own skills — and study the latest developments in our world of technology— we'll be able to work across any vertical.