Updated: Dec 10, 2022
As good as outsourcing may sound, it isn't right for everyone. If you run a mobile hot dog stand, you are going to have to cook the hot dogs yourself. Outsourcing the job to another country doesn't make a lot of sense. That is an obvious example, but it drives home the point that not everyone benefits by using freelancers to handle some or all of their workload.
If you deal with virtual product development, outsourcing can deliver a lot of rewards. There are also negatives to letting someone outside of your company have a role in creating software that is going to represent your brand. Let's take a serious look at the pros and cons of outsourcing software development so you aren't looking at the situation through rose-colored glasses, ignoring any possible downside.
The number one reason business owners turn to outsourcing is to save revenue. Done the right way, outsourcing by using talented freelancers outside of your company workforce saves you money a few different ways. The bottom line cost for producing a piece of software or an application is almost always cheaper when you outsource the project. You can almost always save 30% to 40% on most software development jobs by outsourcing the project, and the aforementioned 60% savings is routinely experienced. You also save money by reducing the workload on your staff. When your employees have to absorb extra work, production can't help but suffer. This increases the likelihood of missed time at work, and expenses arising from your over-tasked workers taking sick leave and personal time. That could push back your target launch date, forcing you to spend extra money on hiring the local talent to finish the job.
As you will see in chapter 8, handling the job yourself or having someone else in your company develop the software can lead to a wide variety of unforeseen or unexpected expenditures that blow your budget out of the water. Handled the right way, outsourcing can save significant money while delivering an end result that is as good as, or better than, your in-house team can create.
The fewer things you have to oversee, the more free time you have. The more free time you have, the greater the likelihood that you will spend that time on activities and projects that deliver the biggest impact to your bottom line. As mentioned above, there is a time-saving aspect that is enjoyed by your on- staff software programmers, coders and developers as well.
If you are under a time crunch, outsource the project to developers in multiple time zones. This means that literally around-the-clock your project is coming nearer to completion at a much more rapid rate than if your company's team of experts were the only ones fighting a deadline.
You Can Overcome a Lack of In-House Ability
This is the second most common reason for using freelancers. For software development and any other number of tasks, you may not have the expertise necessary to handle the job. You could hire someone full-time or part-time to work on these types of jobs in the future. You would have to train that individual. Who is going to train him if you don't currently have anyone on board that has the requisite skills to do the job in the first place?
You may want to look down the road and consider developing a team of software developers and programmers as an important part of your growth plan. In the short term, it is so much simpler to head over to well-known freelance websites that have processes in place to help you vet, choose and hire a capable software pro (more details on this process in the coming blogs).
You Get Affordable Access to the Most Talented Software Minds in the World
Perhaps the most attractive aspect of outsourcing is that the low cost you will absorb definitely doesn't have to mean low quality. Just because a programmer happens to live in a part of the world that suffers from poor socioeconomic status does not mean that they can't have one of the sharpest minds in the software community.
When you start your search for a freelancing software pro to help your business, you are probably going to be impressed at the level of talent and ability that even a meager budget has access to thanks to the outsourcing business model.
Greater Productivity for Your Entire Team
There is an old saying that says, "Many hands make light work." This is definitely true with outsourcing. You and your team can get more done when an off-site contractor reduces your workload. This not only enhances productivity, but it also boosts employee morale, since your staff doesn't feel overworked.
Your Company Becomes More Flexible
In the past, you may have been worried, or even scared, about branching off in a particular direction with your business. Once you know you can hire just about anyone for any software task or some other project, you can take advantage of opportunities you see in the marketplace. Your company becomes instantly more flexible, without absorbing the high costs of training and retaining new full-time employees.
You Don’t Miss out on Technological Advances
Technology is changing at an exponential pace. Take a look at your personal experience with technology 20 years ago, 10 years ago, and just 5 years ago. Advances in business practices, software modeling, and hardware technologies can pop up anywhere around the globe. Outsourcing gives you instant access to competitive advantages when they appear, without you having to purchase those technologies for your business.
As you can see, there are a lot of great reasons to send your next app or software development project to a freelancer outside your company. Let's be serious here for a second, though. Almost no business decision you make will be all upside. Accordingly, there are negatives to outsourcing a software project.
You Lose a Measure of Control
Outsourcing does require that you hand control over much or all of a project to a total stranger. In many cases you will never meet the programmers or developers you hire. You have to have complete faith in your freelancer's ability to handle the job on their own, complete it in a timely manner, be forthcoming and truthful when communicating with you, and hard-working.
In many cases, those are situations you can influence when you are in the same physical location as your staff. If the first time you use a freelancer to develop a piece of software for your company the outcome is less than enjoyable, you may view this lack of control as the reason for the project failure.
You Don’t Know Whether or Not to Believe Testimonials and Referrals
When it comes right down to it, you are choosing one developer over another upon information you cannot control. Glowing testimonials can be faked. Job samples can be "borrowed" from someone else. Websites like Fiverr, and the other top destinations for quality software developers discussed in the next blog do a good job of providing accurate information for their freelancers, which keeps this problem to a minimum.
Even so, an offshore software developer can have the best track record in the world and still foul up your job. Some online sources for hiring offshore developers and programmers don't work very hard to ensure those freelancers represent themselves truthfully. Stick to the trusted freelance sites listed will list in this blog, and this should not be a problem.
You may have heard best-case scenario stories where an entrepreneur found and hired a freelancer that ended up becoming a low-cost, high-quality contributor over the long term. Truth be told, the majority of freelancers you encounter online come and go like the sun and the moon.
You may enjoy a good experience with a particular individual, and then have a difficult time reaching that person in the future due to any number of regional, political, cultural or socioeconomic factors.
This can lead to a high turnover rate, meaning that you constantly have to go through the whole "meet and greet" process over and over. This can be extremely frustrating and time-consuming, especially when you have discovered a cost-effective, talented and productive offshore program.
Communication or Lack Thereof
The best freelancers understand that the biggest money is found in the pockets of English-speaking clients. They work very hard to learn English, sometimes actually taking structured classes and going to school. Other programmers and developers make little effort to become effective communicators. While this is definitely a problem with verbal communication, it can even be an issue when email or Skype is the preferred communication channel.
Remember that effective communication and interaction is a two-way street.
If you find an offshore resource worth cultivating, do exactly that. Find someone on your staff that speaks that person's language. Hire an interpreter if need be and if the price makes sense. Learn the basics of your talented freelancer's language, or provide some other communication channel that keeps this from being a problem.
A Lack of Customer Dedication
Programmers and developers love problems. They enjoy looking at a problem and knowing what solution they are trying to get from that situation. It is tough for them sometimes to understand this piece of software is being created to help a human being derive value from its use.
Quality software developers that work offshore are often very busy. Their talent is in high demand because they churn out incredibly good products for very attractive fees. They don't always have the desire, or the time, to be concerned about the people who will be interacting with the finished product. This can be an issue depending on what level of involvement you expect from your freelancer.
Your Company Morale May Suffer
A hard-working in-house programmer may lose their position if you find a reliable offshore alternative. Even if you don't lose staff members, their career path and earning potential can be shortened or limited because of your offshore hiring practices. This sometimes creates a difficult tightrope you have to walk to keep everyone happy.
Quality May Suffer
Not everyone who freelances globally as a software developer is good at what they do. The same is true of every profession. There are those who are great, those are good, those who are average and those who are poor at their chosen professions. Quality control and monitoring are obviously much easier when the project is being handled on-site.
Next Blog: How to Find Freelance Software Developers and Programmers
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