60% of Organizations Turn to Outsourcing for App Development.

• By Katy Flatt
• 22-05-2023
• Mobile App Development

Outsourcing app development is becoming increasingly popular among businesses, as many organizations turn to third-party vendors for their software development needs. With 60% of organizations turning to outsourcing, it’s a common route for those looking for assistance, with 72% of those organizations in the financial services sector and 31% in healthcare. (Source)

But what are the benefits of outsourcing versus keeping app development in-house? What common mistakes should people be aware of when outsourcing their app development?

Let’s take a closer look at how this method can be useful for your needs.

What to Know About Outsourcing

Outsourcing software development is hiring a third-party company to develop a custom software application or solution for different types of businesses. Businesses outsource for several reasons, such as reducing costs, accessing specialized skills or knowledge, or freeing up internal resources to focus on other priorities.

At its core, outsourcing app development is a way for businesses to reduce costs and focus on their core competencies. In addition, by outsourcing this task, organizations can tap into the expertise and resources of third-party vendors, allowing them to take advantage of specialized skills and cutting-edge technology that may not be available in-house.

Plus, outsourcing allows businesses to manage their time and resources better since these providers typically work with a set timeline and budget, enabling organizations to focus on other important tasks.

Why Do Companies Still Lean on Custom Apps?

For companies that are scaling rapidly, or who have intricate products or solutions, custom applications are essential. Pre-packaged, and out-of-the-box software solutions simply won’t get the job done because what they provide isn’t powerful enough for what a company needs to do internally, and also the functions they want to provide their customers and end users.

When you create your own custom app, the features of the app reflect the nuances of your business and the work that you do for clients, rather than you having to somehow customize out-of-the-box solutions to these same circumstances.

Additionally, when you build a custom application - either internally or through outsourcing - the overall threat from hackers and other cyberthreats decreases, as you can build in security in systems that make those efforts difficult if not impossible.

Intellectual property is a big consideration here, as well. When you custom-build, you keep the ability to make changes on the fly when necessary and also add features as your business grows and evolves. This flexibility and dynamism simply isn’t possible with out-of-the-box or turnkey software solutions.

Building apps through outsourced teams requires a certain degree of management acumen to ensure all of the benefits above are taken advantage of, but there are also a wide range of benefits in doing so.

Building an App Through Outsourced Teams

Building and launching an app can be incredibly complex. App development requires the expertise of app developers, who come with unique skill sets, experience levels, and associated pay rates. How much a company spends on app developer and app builder costs varies depending on the app type they create; mobile, gaming or web-based apps all have different requirements.

Each team needs to research ahead of time to learn about the average market rate for app developers or consider hiring an app development agency to handle their project from start to finish. No matter how brands proceed with app development, they must know about the app developer and app builder costs before diving in.

One important process of app development is sprint planning. App development teams will create a roadmap and timeline of the team's app development goals and objectives. Sprint planning helps the team stay on track during the app development cycle, allowing them to focus on specific tasks and stay organized.

During this process, app developers should consider their resources, timeline, budget, and other constraints to develop achievable goals that will result in higher-quality software products.

This process often involves gathering feedback from stakeholders and leveraging existing technologies to create efficient processes. Sprint planning is a great way to get app developers on the correct path to complete their projects promptly while delivering excellent results.

Finding the Right App Development Team

People need to research and find reputable vendors with a proven track record of delivering high-quality software solutions on time and within budget to make outsourcing worthwhile.

Businesses should also be prepared to provide detailed requirements and feedback throughout the development process so they can promptly address any issues.

Ultimately, outsourcing app development will depend on a specific business’s needs and goals. For example, outsourcing may be the right choice to save time and increase efficiency. But if control and quality are priorities, outsourcing may not be the best solution for their organization. Ultimately, it is important for everyone to carefully consider all of their options before making a decision that could have a major impact on their business success.

However, outsourcing app development has its risks. For one, outsourcing can make it difficult to track your progress on the app. Additionally, there is always the risk that outsourcing vendors may deliver poor-quality apps or fail to meet project deadlines, resulting in significant delays or cost overruns.

Benefits of Outsourcing Software Development

For anyone wondering why they should choose this particular route, it’s a good rule of thumb to weigh the pros and cons. Outsourcing app development may seem like putting a lot of trust in others, but these teams are equipped to deal with the task.

There are many potential benefits of outsourcing software development, including:

• Reduced costs: When done correctly, outsourcing can help a company save money on development costs. This savings is because they can often find vendors who charge less than what it would cost to hire in-house developers with the same level of skill and experience. Plus, for one-time app development, businesses won’t need to pay an employee’s or team’s salary since this will be a contract or freelance role.
• Access to specialized skills and knowledge: One of the biggest advantages of outsourcing is tapping into a pool of highly skilled and experienced developers worldwide. This talent pool means that companies can find the perfect people to develop their projects, regardless of size or complexity. Instead of relying on someone on an existing team who may need to be more knowledgeable in this area, brands can find the right people to complete the task.
• Faster development cycle: In general, outsourcing the development of an app is supported by faster developmental cycles. This speed is greater because the company focusing on the development of your app is only focused on that task, where your internal software developers would have many different concurrent responsibilities at any time, making development slower by default.
• Increased flexibility: Outsourcing allows people to scale up or down their development team as needed. This flexibility can be helpful if they have a project with fluctuating demands or need to ramp up development quickly to meet a tight deadline. In addition, many issues can arise in app development, or needs may change, so flexibility is important for whatever may come up.

Risks of Outsourcing App Development

No pros list is complete without its cons. As with any business decision, there are some risks to outsourcing software development.

These may include:

• Loss of control: When companies outsource software development, they are essentially handing over control of the project to a vendor. This loss of control is problematic if the vendor has a different level of commitment to quality and customer service than the team. Setting clear expectations is a great way to ensure no loss of leadership or regulation happens.
• Maintaining organizational alignment: The further your company gets from the process of building an application that will have a major business effect, the more difficult it is to maintain alignment with organizational goals. That said, with the right project and program management practices in place this becomes less of a concern.
• Hidden costs: Leaders should always thoroughly review their contract before signing it so they know all potential costs involved in the project. Otherwise, all participants involved may be surprised by hidden fees later. In addition, staying on top of any costs, researching the typical rates of app development, and providing a budget ahead of time will help to prevent potential confusion down the line.
• Communication difficulties: Communication is one of the challenges of working with an offshore vendor. Time zone differences, language barriers, and cultural differences can make it difficult to communicate with a team. These factors can lead to miscommunication and delays in the project.
• Security and privacy risks: When you outsource an app development project, there are several security and privacy risks to consider including data breaches, compliance issues and the risk of intellectual property theft.
• Dependence on external vendors: Even though you may contract with one primary developer or development group to outsource the work on your application, that doesn’t mean the outsourced group won’t have their own sub-contractors or vendors with whom you’ll also have to build a relationship to keep things moving slowly. And those types of relationships aren’t always so easy to build - especially in the short-term for a time-constrained project.

How to Avoid Common Mistakes

Businesses can do a few things to avoid common mistakes when outsourcing their software development, such as clearly defining their requirements, doing their research, and choosing a reputable company.

When outsourcing app development, you should seek out collaboration between businesses and vendors to ensure the integrity and success of the app. One primary mistake is not vetting these vendors.

Teams should understand what process vendors use for app development, each vendor's resources, and the costs associated with app development. Researching vendors with high ratings or reviews is a great place to start, but word of mouth is also helpful for a niche or industry looking for software development.

Another mistake businesses commonly make is miscommunication or a lack of comprehensive detail on requirements. Instead, teams should utilize wireframes, communication protocols, and roadmaps when starting an app development project so that everyone involved understands their role and expected outcomes.

A contract is a good place to clearly define goals and expectations and establish a communication method that works for both parties in emergencies or with changing needs.

A third mistake is undervaluing security and privacy. Teams in charge need to ensure the app is safely launched with all regulatory compliances to avoid legal issues. Working with vendors on these issues is also important, and businesses must consider what to do in case of compromise. The adage “you get what you pay for” is crucial, and companies should be mindful of vendors who can deliver protections for their new app.

Last but hardly least, businesses must do rigorous and extensive testing all throughout the process to make sure that the roadmap which was laid out for the contracted resource is being followed closely, and the app is operational at all stages, not just upon completion. You can’t necessarily take an outsourced development company’s word that the app is staying functional throughout development - it’s something you have to validate for yourself to ensure that is the case.

Conclusion

Outsourcing app development should be a comprehensive decision for businesses. Of course, there’s no one-size-fits-all approach, but outsourcing allows for reduced costs, more knowledgeable vendors, and better flexibility around changing deadlines and due dates.

Each company should research and find reputable vendors to ensure they’re getting the right fit for their team to deliver a secure and functional app. It’s a smart and practical route for those seeking app development while saving precious time, money, and energy for other areas of their business and feeling secure in their vendors’ delivery of quality work.