For any company, cost reduction is the primary goal due to which they opt for outsourcing services. However, during these recent years, the outsourcing paradigm has shifted towards mutually beneficial cooperation. This results in an increased value in crafting and developing specific software solutions.
Most companies who opted for software development outsourcing have discovered the hidden costs while they desire to put quality above cost optimization.
Learn More About the Hidden Costs in Software Development Outsourcing Services
There are three ways a company can outsource their Custom Software Product Development Services –
- Hire A Local Custom Software Development Company
- Partner with A Custom Software Solutions Provider
- Recruit an In-house Team of IT Professionals.
In short, you can call three available ways - onshore, nearshore, and offshore software outsourcing.
In the first case - onshore, companies can save higher costs while eliminating the need for office space, employees’ training, and insurance costs. Also, hiring a Custom Web App Development Agency will always result in the favor as you work with the industry experts.
By opting for the nearshore approach, you save costs on office space and employee benefits. And apart from that, you also reduce software development cost by approx. 20-25%.
Finally, offshore software outsourcing. In this case, you can witness real cost savings rooting in. You can either hire the entire In-house team of IT professionals or just a project manager who keeps a record of everything. A project manager would be responsible to ensure on-time completion of the project while meeting your budget and functionality requirements. In case, you don’t hire a PM, your project might suffer double costing as well as the time to be completed.
There are many more ways you can avoid the hidden costs of software development outsourcing. Let’s check out the tips mentioned below and use them smartly to reduce the cost of custom software development solutions.
How to Avoid Hidden Costs While Outsourcing Agile Development?
If you’re looking to accommodate software development solutions, then you’re at the right place. As more and more companies prefer to bring Digital Transformation in their operations, IT outsourcing is the crucial step to make the first move.
Let’s assume you’re owning a real estate agency and considering outsourcing the development of your mobile app. Your main motive is to facilitate better communication between agents and home buyers.
So, before you choose a custom software development services provider, make sure to perform a detailed analysis. You must determine whether the app will enhance your business, or you need a website.
Although most onshore, nearshore, and offshore vendors usually hire business analysts to take all headaches of strategy mapping. He/she will also discuss your project requirements, goals, and visions. He will try to understand your pain points and accordingly will share the right and feasible solution.
For all this to happen nicely, you need to be specific about your expectations, budgets, desired timeline, and everything. You can also avoid hidden costs by choosing the right pricing models. Most software development companies offer three types of pricing models to their clients –
- Fixed Pricing Model
- Time & Material Pricing Model
- Team Pricing Model
If you know what type of software product you need and what functions should be there in the app or website, you can go for the Fixed Pricing Model.
It saves a lot of time on project management and you can easily segment your project phases into several stages. This enables easy tracking at the completion of each stage.
In the Fixed Pricing Model, companies must plan their software development costs prior. So, this model is best preferable for small or medium-sized organizations that do not want cutting-edge technologies.
Under circumstances when you want to outsource innovative software development like IoT, AI, VR, and AR. You might require making multiple changes to the project scope during the development phase.
In such a situation, you can prefer the Time and Material Pricing Model which enables you to pay only for the time and efforts spent on the project.
Finally, the last pricing model i.e. the Dedicated Team approach is best suited for the companies that extend their in-house teams. The companies that can coordinate project management activities and build long-lasting partnerships with an outsourcing provider can opt for this model.
It is a great pricing model in the long run. Both teams remain on fruitful sides. A customer must provide the software development team with a certain amount of workload every month.
Conclusion -
If you’re looking forward to the right outsourcing software development partner to outsource your IT project, connect with us. Always remember that the software or app must eliminate all inefficiencies in the workplace and meet your expectations too.
