Leading Factors Affecting The Cost Of Software Development Outsourcing
The companies often turn to outsource when the task at hand becomes an impediment in their operations instead of driving business. A typical example of such a scenario is software development. The expense arising out of the unavailability of in-house talent is what causes companies to approach an external vendor who can take up and deliver their projects.
However, then they are faced with another challenging question: should one select a domestic outsourcing partner or pick an offshore service provider? No matter what you choose, there are always ramifications, especially on the cost. Unfortunately, this is not the only factor that stands to affect the price the company incurs for outsourcing their software development project. Suffice it to say that multiple other facets impact software development outsourcing cost, and it is crucial you understand them before you take the final call. For your convenience, we have listed some of the leading factors that you should be aware of.
1. Geography: If you choose a domestic partner, the necessary costs will pretty much be the same. However, then you will also have to make space for the partner’s costs for operations, marketing, and management. On the other hand, an offshore provider will mean lower overall prices and will probably even save you from some of the aforementioned additional costs, if not all of them. Also, as lucrative as that sounds, ensuring seamless co-operation and acceptable quality with an offshore vendor can prove to be quite tricky.
2. Access to talent: There is no doubt that outsourcing gives a company nearly instant access to a sea of talent from across the globe. This talent pool will include not only freelance resources but also experts employed by the vendor you engage with. Now, the cost is directly proportional to the experience of support. So, the higher you go up the ladder of expertise, be prepared to pay higher as well.
3. Dedicated team: Ideal for long-term projects, this model involves the outsourcing partner supplying the personnel needed for the project. The company is provided a rate card for each human resource on the team, which, by the way, typically all work from one premise. It is vital that it remains cost-efficient, seamless communication to ensure this model is successful. Because if the team is unable to execute their duties owing to reasons like awaiting feedback, the company will essentially be paying them for sitting idle.
Well, that sums up the critical factors that hold power to decide how much you end up paying for the software development partnership program you undertake for your business’ requirements. Nonetheless, it is still crucial that you first estimate the costs based on these as well as other factors to allow yourself to make an informed decision. We admit this is a tad more complex than you’d expect it to, but look at the bigger picture and how much it can make a difference about the outcome you seek.
