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Why Your Business Should Hire an Outsourced Development Company

August 20, 2019

Thanks to the internet, business relationships aren’t limited by distance, making it easier than ever to find the right people for your project.

The internet makes it easy to connect with other people and businesses, and this is one of the many reasons why outsourcing has become an increasingly popular development decision over the last two decades.

Additionally, outsourced development companies are providing a wider range of technical services and management support than they used to.

Some companies may be wary off the low prices associated with outsourcing, thinking they signify shoddy quality. They may also be hesitant to commit significant resources to a group of people they’ve never met before.

While these concerns are understandable, I’ve found that the cost-quality ratio, technological experience, diverse skill sets, and flexibility of outsourcing to be well worth the investment. 

4 Reasons to Outsource Development Projects

  1. More affordable prices without a loss in quality 
  2. Well-developed IT systems 
  3. A more diverse set of skills 
  4. Flexibility when it comes to operational changes 

More Affordable Doesn’t Mean Less Quality 

Because some of the most popular outsourcing countries have low rates compared to the USA- or UK-based companies, clients may doubt the services’ quality. 

If we have a look at the cost per hour for different European countries, we will see the following: 

  • Eastern Europe: $25-$50/hour
  • Central and Western Europe: $68 - $100/hour 
  • The Baltics: $35 - $50/hour
  • Scandinavia: $50 - $175/hour 

That number jumps to $150/hour for US-based developers. 

These low prices are not a trick, but rather a product of these countries’ lower cost of living. 
Eastern Europe and the Baltic states (Estonia, Lithuania, Latvia) have the lowest cost of living index score, and therefore, the lowest average hourly development rate. 
The cost of living in Eastern Europe is must less expensive compared to the cost of living in Western Europe. 

Source

Fittingly, the Scandinavian nations of Sweden, Denmark, and Norway have some of the highest cost of living scores in the region and some of the highest hourly development rates.

If you’re homing in on a company with a highly affordable rate and are worried about quality, you shouldn’t be. Many of these company’s home countries have dedicated sizable resources to technical training and digital growth. 

Well-Developed IT Ecosystems

Most eastern European countries foster the development of their IT industries through a variety of governmental and educational initiatives. 

For example, the Belarussian government has instituted a series of tax breaks and entrepreneurship-friendly legislation, including allowing visa-free entry to visitors from almost 80-countries. 

The country’s president is also advocating for lessening restrictions on currency transfers to attract venture capital investment. 

On the education front, both extra-curricular hackathons and a strong software development curriculum at higher education institutions produce a steady flow of high-quality developers. The relatively high wages (compared to cost of living) entices graduates to remain in-country and further develop the country’s IT infrastructure

Diverse Skills 

With the demand for outsourced development increasing (companies are allocating more and more of their budget to outsourcing) service providers have to stand out. One way to do that is to offer technologies that are in high demand but aren’t often a developer’s specialty. 

For example, in Eastern European and Asian countries, there are a number of specialists who work with Python (a nod to Machine Learning) and Shell. 

Different countries specialize in skills such as algorithms, Java, data structures, C++, and security. For example, the top 5 countries that specialize in Shell include the Czech Republic, Hong Kong, Hungary, Poland, and China.
 If your business’s team is lacking C++ programming, there are several strong candidates all across Europe. 

Outsourced development allows you to isolate the skill set you need and search for developers with well-suited experience. It’s almost like assembling a dream team – a nearly impossible task when hiring local developers. 

Flexibility 

While hiring in-house developers provides companies with security and allows for easy collaboration, it sacrifices a certain degree of flexibility and agility.

Outsourcing allows you to minimize damage from both operational and financial changes. 

Interviewing, negotiating with, and onboarding in-house developers requires a hefty time commitment. If you initiate an outsourced relationship, additional resources can be added to the project much more quickly. 

This ability to scale (either up or down) rapidly is optimal for seasonal business and or industries that experience downturns after contracts are fulfilled. The lack of overhead will also minimize financial risk. 

From saving on office space and computers to training and benefits, outsourcing possesses many monetary advantages. 

Finally, depending on the specific contract you enter into, you may be able to terminate the relationship without incurring a substantial penalty. This is not always the case, however, so tread carefully. 

Due-Diligence Is Vital in Outsourcing 

The benefits of outsourcing software development are attractive: strong value for the money, various skill sets, financial flexibility. Carefully consider whether outsourcing is the right option for your company, however, because it is not without its drawbacks. 

When searching for an outsourced vendor, pay attention to its portfolio and check out any reviews of the company online. Equally important is crafting an explicit communication plan. During negotiations, spell out your communication and reporting requirements. 

The more detail you can provide the vendor with ahead of time, the better. A more thorough communication system will help you monitor your project’s process, providing valuable peace of mind. 

Ultimately though, regardless of location or price, the best way to ensure success is to find a developer that meets your criteria and possesses the skills you need.