The state of software development outsourcing
12th November 2018

Posted by : Brijesh Tekrawala

Tags : Statistics

During the past couple of years, many outsourcing companies have developed in terms of size, impact, and potential for growth – increasing their ability in delivering a variety of packages of IT and software development services.

In one of our previous articles, we have talked about the rapid technology changes and how companies need to keep up with those changes, learn new skills every day alongside their core business in order to survive and grow. That’s why organizations worldwide seek stronger strategic partnerships with IT outsourcing providers. However, outsourcing companies are facing those same challenges too: a shortage of qualified software developers, high demand for big data specialists, adoption of use of blockchain technology and similar.

Partnering with software development outsourcing companies helps organizations decrease costs and get their product to market much faster. So it’s no wonder that outsourcing software development services are on the rise. 72% of companies surveyed by Deloitte have already outsourced IT services to an external partner and 78% of respondents felt positively about their outsourcing relationship. In addition, large organizations have increased the percentage of their IT budgets spent on outsourcing from 6.3% to 8.7% this year according to a study by Computer Economics. However, outsourcing is much more than a cost-cutting tool and money is not the only reason why many successful companies from all over the world outsource software
development. Outsourcing those services can be a significant source of innovation and growth in both early-stage companies and large corporations. Based on the research conducted by IBM, only 27% of companies use outsourcing to decrease their costs, while 36% look to outside developers to boost innovation and optimize their business development. There are also many reasons why a company may choose to outsource software development services, such as: improving company focus, freeing internal resources for other purposes, streamlining or increasing efficiency for time-consuming functions, sharing risks with a partner company and many others.

Some of the highly-successful companies that have used outsourcing for their software development to grow their business are Slack, Skype, Google, Github, AppSumo, Alibaba, Basecamp, Microsoft, WhatsApp and many more. Of course, you don’t need to be a global powerhouse to take advantage of software development outsourcing – outsourcing brings benefits to companies of all sizes.

In 2019 outsourcing will likely continue to rise, but we’ll most likely see certain industries take more advantage of this opportunity. From legal firms, media, pharmaceutical enterprises to financial institutions – new technology trends are penetrating every available industry. Outsourcing software development has proven to be a great success for many companies worldwide. At Differenz, we have an outstanding software development team ready to take on new projects. We provide our clients with highly qualified and experienced software developers who are experts in working on specific tasks and in specific industries, in order to fulfill your project requirements effectively. If you want to conduct a cost-effective business without compromising on quality – we’d be happy to discuss your software idea.