In the early part of the 20th century, rapid industrialization of Western countries provided the need for a readily available and more importantly highly skilled workforce that would be able to support the progress and innovation in the workplace. Businesses focuses on in house recruitment to fill these positions.
The latter part of the 20th century and into the beginning of the 21st saw an increased need in specialized and technical skills in the workplace. These skills normally found in western countries were now being found in quantity in developing economies such as India and China.
The software industry is one area where this is abundantly clear. It has led to a growing acceptance of software development via outsourcing. Outsourcing can be done anywhere it does not necessarily have to be done out of country. There are often viable in country options as well.
The first step is to understand what outsourcing is, outsourcing is the term used by businesses when they purchase the services of an external party to handle projects or functions normally handled internally. The advantages of outsourcing are numerous. Cost is obviously the first advantage. When outsourcing the business looking for the service negotiates with the business providing the service over the total cost of the project. Since this is often paid in a lump sum, it may seem like a large sum however, in comparison it is generally less than what would be spent to do the project in house. You have to compare the outsourced expense with the expense of obtaining, training and paying a team in house especially if that team is no longer necessary once the project ends.
The second advantage is that in a single step outsourcing provides you with an entire team of experts in the field which would otherwise be hard to find and expensive to acquire as full time staff. This is especially true of software development since it requires highly skilled individuals. The cost in terms of time, energy and money to train them may not earn a positive return in the long run.
Additionally, many businesses change technology on a regular basis. Keeping an in house team means constantly upgrading the skills of that team which can be expensive. Another thing to consider is the fact that highly skilled positions such as those found in software development generally have a high turnover rate. This can cause a gap in the skill set of your business as well as a lack of continuity when it comes to knowledge. This problem does not exist generally when outsourcing.
When outsourcing you have the benefit of knowing, the team is already available to start your project immediately. There is an additional benefit when outsourcing. Most companies who provided outsourced services have several staff members with the same skill set. This means that there are no skill gaps or lack of continuity if a staff member leaves. It reduces the overall time necessary to complete a project.
Project management also needs to be considered when dealing with software development. When outsourcing a software development project consider the experience of the company. Experienced companies provide tried and true methods of project management that ensure that your project meets its deadlines and budget.
