Quality Services and Special Skills. Most service providers excel in particular SW niches (for example: computer vision, embedded software and WEB application). Mature service provider keeps honing skills of its employees, chases the latest technologies and accumulates knowhow to win endless battle with competitors. It extremely values its market reputation and guarantees you better quality than an in-house employee can provide.
Labor Cost Savings. More affordable cost of outside service provider as compared with in-house employees is a factor that is often regarded as the main reason for outsourcing. It is really the part of outsourcing benefit, but it goes much deeper.
Focus on Core Business. Running a business may require skills in many different areas including but not limited to information technologies. If SW development is not a core business of your company, trying to create your in-house SW department may focus you away from what you do best. In most cases it is better to outsource SW development to third-party service provider if it’s not your core business. It allows you to focus on what you do really well.
Risk Reduction. Mature service provider may offer different collaboration models for outsourcing – time and material, project-based or partnership. All of them are very predictable in terms of price, milestones and deliverables once a contract is signed. The liability of service provider under contractual obligations is higher than of in-house engineers.
Cut Downtime Cost. Workload in a company may change in both directions; market stagnation may come just after prosperity. If you do not have in-house SW team (or it is small) and you actively outsource SW development, it’s possible to painlessly endure hard times. You can just stop an outsourcing for a while, instead of discharging your employees or keeping paying for their downtime.
Management Expenses Savings. It means that mature service provider offers you robust professional team rather than a mob of talented individuals, so you do not need to spend additional efforts to control each of your off-site engineers; it’s enough to communicate with their representative (e.g. project leader).
Cut Headhunting/Training Expenses. When you need more engineers for a new project it’s often difficult to find appropriate individuals, hire and train them. Instead, it is much more effective to engage professional SW team elsewhere, especially for urgent single projects.
Capacity Management. “Two heads are better than one” therefore outsourcing can be used during emergency rush when you have to meet deadline, and for excessive amount of work you cannot accomplish by yourself without increasing your stuff.
Access to Latest Technology. It’s often difficult to have all the latest technology for every engineer in your company especially if you have a small business. In this case it’s better to access effective knowhow and modern technologies by means of outsourcing service providers since it is their core business.
Flexibility to Change. Outsourcing gives you a lot of flexibility. You can freely switch between different service providers to find your proper one without making risky and costly investments. Service providers can be treated as the safe hillocks helping you to get across the dangerous Swamp of Business to your goal – new business niches, new services and new clients.
Office Expenses Savings. It means that you do not need to purchase computers and maintain workspaces (electricity, consumables, networks and so on) for off-site engineers – it’s the mission of service provider. It’s more cost-effective to rent rather than build infrastructure and systems.