In our previous blog post, Custom Software Development Outsourcing vs Partnering, we review the reasons why you should consider partnering with a development firm over outsourcing the work. This blog post will focus on more the traditional outsourcing model and review some of the pros and cons with an outsourced technology strategy.
Traditional outsourcing is referred to as the contracting or subcontracting of noncore activities to free up cash, personnel, time, and facilities for activities in which a company holds competitive advantage. Companies having strengths in other areas may contract out data processing, legal, manufacturing, marketing, payroll accounting, or other aspects of their businesses to concentrate on what they do best and thus reduce average unit cost. Outsourcing is often an integral part of downsizing or reengineering. Also called contracting out.
Pros of Custom Software Development Outsourcing:
- Reduced labor cost and quicker return of investment (ROI).
- Allows companies to focus on core competencies while not being concerned about outsourced routine activities.
- Reduces cash outflow and optimizes company resource utilization.
Cons of Custom Development Outsourcing:
- Possible loss of control over a company’s business processes.
- Problems related to quality and turnaround time.
- Sluggish response times coupled with slow issue resolutions.
- Lower than expected flexibility and innovation.
- 50% of employers report quality of their service providers and a reactive versus proactive attitudes are the most frustrating issues to deal with.
- Language barriers and cultural differences.
- Reduction in employee morale.
By partnering with an Agile company rather than outsourcing, each of these cons, or risks, can be dramatically decreased or eliminated. The Agile Manifesto and the Agile Principles, when applied correctly, directly challenge all the underlying symptoms which cause these problems.
Contact One80 Services Custom Development today and see how we differ from other custom development companies.
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