Usually, enterprises maintain their own Research and Development department. However, when there is an urgent need to rapidly increase capacity and drive product advancement, hiring a dedicated team for a specific project or an extended period often emerges as the most practical solution.
Recruiting in-house developers for such projects becomes costly due to the significantly higher salaries demanded by local developers in the EU and the USA, reaching up to 40%. Additionally, the process is time-consuming as it requires interviewing numerous candidates.
Approximately 25% of executives choose to outsource software development as a concrete strategy to stay competitive in today’s dynamic business environment. Nearly 80% of the world’s leading 500 companies rely on offshore teams to handle their operations.
Explore actual instances when Independent Software Vendors and enterprises can benefit from outsourcing product software development for significant projects.
Scenario 1. Unlocking Expertise: Addressing Skill Gaps in Specific Software Development Domain
When a company develops a new and intricate software product, they need specialists with technical expertise and skills in specific areas. Let us consider as an example the eLearning domain. For instance, an enterprise requires a Learning Management System (LMS) built on SharePoint, which would seamlessly integrate with Microsoft 365 and Teams. The goal is to provide a platform for delivering and managing training and certification in both educational and corporate settings.
The main challenge is to develop an LMS ensuring smooth integration with Microsoft products like Microsoft 365, Azure, SharePoint, and Microsoft Teams. This all-inclusive LMS with mobile accessibility can streamline learning processes for businesses and enables training companies to expand their training services. Of course, the best choice would be a technology partner with proven expertise in the eLearning domain and building dedicated teams.
Scenario 2. Empowering Business Growth: Modernizing IT Systems for Enhanced Performance and Global Support
As businesses grow and evolve, their requirements expand and eventually surpass the capabilities of their current IT infrastructure. That leads to a decrease in overall company performance.
To avoid financial losses resulting from underperforming internal business software and to support its global workforce, the enterprise needs to modernize its systems and potentially migrate to the cloud. Therefore, they sought assistance from application modernization companies.
Scenario 3. Accelerating Innovation: From MVP to Market Leader in Record Time
When an Independent Software Vendor (ISV) tests new ideas, their in-house R&D team typically creates a Minimum Viable Product (MVP) and evaluates initial results. If the new application proves successful, they must quickly develop a comprehensive version of the software to be the first to enter the market.
The second significant challenge for the ISV at this stage is to ensure that the end product meets high-quality standards, functionality, and usability, despite tight deadlines. That is crucial for establishing leadership in the niche market. To accomplish both objectives, the company faces the difficulty of rapidly assembling a team of experienced specialists for the project.
Scenario 4. Meeting Customer Demands: Streamlining Customization Processes to Ensure Timely Deliveries
The enterprise offers a range of intricate software products that require individual customization for each end customer in order to facilitate sales.
However, the in-house R&D team is simultaneously engaged in ongoing product development and lacks the necessary time and resources to handle customization tasks effectively. Consequently, the company struggles to deliver software products to customers punctually, resulting in financial losses, damage to the brand image, and a decline in client loyalty.
Scenario 5. Breaking Barriers: Enabling Cross-Platform Compatibility for Enhanced Market Reach
For example, an Independent Software Vendor (ISV) possesses a custom software product that necessitates customization for each client, specifically organizations with unique workflows. This customization task is accomplished by an in-house team of developers. However, the company’s decision-makers have recognized a technical obstacle impeding business growth. The issue lies in the software, which was originally built on the .NET Framework and is only compatible with Windows operating systems.
Consequently, it cannot be sold to customers using macOS. To expand into a new market segment and increase sales, the software product must be compatible with both Windows and macOS. That can be achieved through app modernization to .NET Core. With the R&D team facing additional strategic tasks that demand extensive work, it becomes evident that they are overwhelmed and require extra capacity to handle multiple large projects simultaneously.
Enterprises often require software development staff augmentation to overcome challenges such as expanding capacity, addressing skill gaps, and beating the competition. Opting to hire a dedicated team for a specific project or an extended period proves to be a practical solution, considering the high costs and time-consuming nature of recruiting in-house developers. By exploring real-life scenarios and collaborating with experienced technology providers, enterprises can effectively leverage outsourcing to achieve their business objectives.