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Why outsource software development?

Posted on April 2nd, 2016 in Market Research by Compactory Team

Outsourcing software development has proven to be a great success for many companies worldwide. Globalization is forcing a lot of company's to constantly improve their competitive edge. Outsourcing will reduce your internal costs while allowing your company to focus on its core competencies. In a fast moving technological world, it is unlikely that your company will be able to design a whole spectrum of technical software. So it is wise to outsource some of your functions while keeping intact your business processes.

Offshore development makes perfect sense for a strategic approach for your business. Outsourcing will help you conduct a cost effective business by decreasing your payroll. It will help your company give a more specific oriented task to your executive employees. So what are the top reasons why outsourcing makes sense?

Cost savings

Lower operational and labor costs are among the primary reasons why companies choose to outsource. When properly executed it has a defining impact on a company's revenue recognition and can deliver significant savings. Outsourcing, many a time is undertaken to save costs and provide a buffer capital fund to companies that could be leveraged in a manner that best profits the company

Focus on strategy

Companies also choose to outsource or offshore so that they may continue focusing on their core business processes while delegating mundane time consuming processes to external agencies. Freeing up internal resources that could be put in to effective use for other purposes is also one of the primary benefits realized when companies outsource or offshore

Lack of in house experience

Outsourcing and offshoring also enable companies to tap in to and leverage a global knowledge base, having access to world class capabilities. Many times stranded with internal resource crunches, many world class enterprises outsource to gain access to resources not available internally

Risk mitigation

By delegating responsibilities to external agencies companies can wash their hands off functions that are difficult to manage and control while still realizing their benefits. Outsourcing and especially offshoring helps companies mitigate risk and is also among the primary reasons embarked upon Flexibility When you outsource, you don't have to spend time recruiting, hiring, training, and housing employees for short-term projects.

Technological advances and IT talents

Outsourcing also enables companies to realize the benefits of re-engineering. Some companies also outsource to help them expand and gain access to new market areas, by taking the point of production or service delivery closer to their end users.

Despite outsourcing having come into a lot of controversies in recent times, industry watchers predict that outsourcing as a business practice is on a growth mode. More and more companies are drawing up plans to outsource work to offshore locations. The trend is clearly in favor of outsourcing larger volumes of work. Vendors are moving up the value chain to include in their service offering a range of additional services that require greater skills, research support and expertise. As offshore vendors become more streamlined and improvise on the offshore outsourcing model, it is not difficult to see why outsourcing is here to stay.

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