Outsourcing Software Development: Why CEOs Love It

To grow faster, CEOs must prioritize technology and digital transformation

Companies that lead in technology innovation achieve 2-3x more revenue growth as compared to their competitors. Savvy CEOs focused on getting back to growth in the wake of the global pandemic are prioritizing technology to accelerate digital transformation and drive innovation. At the top of the CEO agenda?:

• Launch new products and services that improve the customer experience

• Monetize data with technologies such as artificial intelligence (AI), machine learning (ML), blockchain, advanced data analytics, and more

• Create value from the Internet of Things (IoT) and connected enterprise

• Modernize applications and migrate workloads to the cloud where they can be worked on from anywhere

In short, CEOs are looking at however and wherever technology can be used to deliver continuous value that creates advantage and grows the business.

 

Should you build software in-house or outsource it?

To deliver on these critical technology initiatives, companies need a sourcing strategy that balances speed to market and investment. It turns out that access to talented software developers may be one of the most challenging pieces of the puzzle. 

A sustained global talent shortage means skilled technical talent is hard to find, expensive to hire, and difficult to retain. KPMG reports that 67 percent of tech leaders struggle to find the right tech talent, and 22 percent of organizations surveyed by Coding Sans ranked increasing development capacity as their top challenge. CIO.com notes that it took employers an average of 109 days to fill roles in machine learning and AI, compared to 44 days to fill jobs in general. 

Skill shortages can delay project kickoffs and delivery. Not surprisingly, the skill sets companies need to drive significant enterprise software builds, such as big data and analytics, cybersecurity, and AI/ML, are among the most competitive.

Many companies find the best solution in something that isn’t so new: software development outsourcing.

Ready to have a conversation about outsourcing your software development to a top-ranked Agile development team? Let’s talk.

 

Software outsourcing: the CEO’s best (not so) new business strategy

Software development outsourcing, once seen as a staffing approach to help internal teams accommodate spikes in demand, has rapidly become a strategic business advantage. 

In fact, the global market for application outsourcing, which includes application development, testing, and maintenance, is expected to exceed $108 billion in 2021. As much as 51 percent of U.S. companies outsource software development (Statista), including well-known companies such as Slack, WhatsApp, Google, Alibaba, and GitHub.

It’s not hard to understand why. Software outsourcing can provide the optimal mix of speed and cost, empowering companies to access top technical talent, scale teams up and down fast, improve quality, leverage the latest technologies, reduce costs, and deliver significant innovation faster. There are three primary options for outsourcing software development, including:

• Onshore, using local resources 

• Offshore, using resources from a variety of global locations

• Nearshore, using resources from nearby countries in Latin America

 

Which software development outsourcing methodology is right for you?

Which software outsourcing approach you choose will depend on your specific requirements. 

Onshoring: when you need to outsource in-demand skills 

If you need highly specialized technical skills that can only be found in the U.S., or your business culture doesn’t easily accommodate remote work technologies and practices, you may need a software outsourcing strategy that keeps your developers onshore or on-site. The downside? As with developers you may hire as permanent employees, skilled onshore developers can be hard to find, expensive, and easily poached by other companies.

Offshoring: when you need to outsource simple, well-defined maintenance tasks

Software outsourcing offshore promises lower costs by providing access to developers in global locations with lower labor costs, such as Poland and India. However, many companies report issues with poor quality code, miscommunication, lack of big picture thinking, or limited understanding of the business problem being solved by a project. For these reasons, offshoring is most suitable for projects that include simple maintenance tasks such as updates and basic enhancements: projects for which you can better control quality and minimize time-consuming back-and-forth discussions.

Nearshoring: when you need to outsource with affordable expertise and excellent collaboration

Outsourcing software development in nearby Latin America, a practice referred to as nearshoring, solves many of the challenges that come from working with software development teams across the globe. Fortune 500 companies like Amazon, Citibank, and Proctor & Gamble have all discovered the advantages of outsourcing software development nearshore. These companies find it easier to work with teams in nearshore locations than traditional offshore locations, because the teams are highly trained, share the same language and cultural affinity, and work during the same business hours. Organizations that value the transparency and efficiency of Agile software development find that software outsourcing with a nearshore distributed team also enables them to get more value from their budgets.

Ready to see what affordable expertise and excellent collaboration look like? Talk to us.

 

Agile software development is best for speed and flexibility, but is it compatible with software outsourcing?

For companies tackling business-critical and complex projects that support digital transformation and the current CEO agenda, the ability to rapidly produce minimum viable products (MVPs) is essential. Most companies now practice some combination of an Agile software development methodology together with DevOps or DevSecOps to achieve the speed and flexibility required to design, develop, and deploy products that satisfy requirements.

Some companies mistakenly believe that Agile is incompatible with software outsourcing because of its emphasis on small, co-located teams. In fact, Agile methodologies such as the Scaled Agile Framework (SAFe) have evolved to successfully encompass distributed, enterprise environments and complex software builds that involve dozens or more teams. The reality is that most organizations work in a much more distributed fashion; a recent State of Agile survey shows that 81 percent of companies report members of the same team may work in different locations and 71 percent report multiple teams across multiple geographical locations.  

Unlike traditional, over-the-wall application development, distributed or scaled Agile approaches enable all teams to successfully work together to create detailed plans, implement smaller deployable units, push updates faster, and respond more quickly to market dynamics. Whether teams work physically located together in the same office, or remotely in distributed offices around the world or from home, Agile can ensure you achieve full transparency and control your needs while outsourcing even the most complex software builds. 

 

What software development capabilities do you need?

Whatever digital initiatives are on the CEO agenda, you are likely to need a mix of software development technologies. Some of the most common include cloud, IoT, big data, AI/ML, mobile, and more.

Cloud capabilities for software development outsourcing

Cloud is the foundational technology for digital transformation, empowering companies to innovate and deploy products and services to market and scale more quickly and efficiently. Achieving the best return on your investment in the cloud requires significant planning. Depending on the maturity of your cloud strategy and the requirements of your project, you may need a software outsourcing partner with a broad range of cloud expertise to help:

• Architect solutions to deploy in the cloud, whether public clouds such as AWS and Microsoft Azure, multi-cloud, hybrid cloud, or private cloud 

• Modernize applications and operations for cloud

• Ensure security and compliance requirements are met for data stored in the cloud or in transit through the cloud 

• Build the continuous integration, delivery, and performance testing that a DevOps or DevSecOps approach requires 

• Deliver a unified view of systems activity through monitoring

Internet of Things (IoT), big data, and AI/ML capabilities for software development outsourcing

Powered by billions of connected devices that share data about their use and environment, the Internet of Things (IoT) creates a treasure trove of information that companies can leverage to radically transform business. Companies are building smart devices, using IoT to track data and control devices, and more. Increasingly, companies are also combining IoT with big data, artificial intelligence (AI), and machine learning (ML) technologies to create a truly connected enterprise, sometimes called Industry 4.0. Depending on your project requirements, a software outsourcing partner may help:

• Leverage the latest cloud technologies to build custom platforms, applications, and solutions that incorporate smart usability and data analytics 

• Enable device control via mobile and/or web applications, or voice control using personal digital assistants like Amazon Alexa, Google Home, and Apple HomePod 

• Provide embedded development needed to build highly performant, network-enabled IoT devices

• Use real-time data analytics, business intelligence tools, and machine learning to provide a hyper-relevant, user-friendly experience

Mobile app capabilities for software development outsourcing

It’s a mobile-first business environment and companies are looking to deliver exceptional, enterprise-grade customer, employee, and partner experiences via mobile apps on Android, iOS, iPad, tvOS, Roku, and other mobile and streaming devices. The approach you choose for your mobile app will depend on your requirements: 

• Native mobile apps for Android, iOS, and others

• Hybrid mobile apps that combine native and web-based approaches

• Cross-platform mobile apps that allow you to build once and use on multiple platforms

• Develop progressive web apps (PWAs) that let you build websites that look and feel like mobile apps

• Create a highly engaging user experience and user interface design that keeps mobile users with high expectations from deleting the app

• Meet the needs for privacy, security, and compliance with commercial, contractual, and legal requirements, including HIPAA, PCI-DSS, and more

• Make sure your mobile app is accepted into the app store successfully

Cybersecurity capabilities for outsourced software development

The explosion in cloud adoption, mobility, IoT, and bring-your-own-device (BYOD) policies mean your enterprise application needs robust, multi-layer security that addresses the rapidly evolving threat landscape. To protect your enterprise application and ensure compliance with any international, national, or local laws that govern your business operations, you must ensure that your software outsourcing partner builds security in from the start, including:

• Providing comprehensive cybersecurity strategy, assessment, design, and implementation

• Using international standards-based security approaches like ISO-2700

• Establishing scalable and maintainable user and identity management, authentication, and authorization

• Conducting security and risk assessments, pen testing, and vulnerability scanning

• Completing secure code reviews

Enterprise web app development capabilities for software outsourcing

Responsive, extensible web applications can be game-changing for your business, but can also be complex to design, build, and deploy. A proven partner for software outsourcing can help you successfully navigate the challenges, including: 

• Creating intuitive, full-stack web apps that span devices and share the same code base so that end users have the same seamless experience everywhere

• Evaluating emerging technologies, backing them up with practical examples, and explaining if and how they can support your objectives

• Ensuring your enterprise web application is high-performing by using methodologies such as test-driven development, behavior-driven development, functional-driven development, and more

UI and UX capabilities for software development outsourcing

Modern software takes a user-centered approach to user interface design to ensure that the application meets the business priorities, the end user’s goals, and the product team’s technical requirements. A software outsourcing partner will work with you to create a responsive design system that scales, ensures consistency, and improves the overall user experience by:

• Conducting user research and developing user stories that speed time to MVP

• Defining how users interact with your digital product to make it user-friendly

• Using rapid prototyping and interactive prototyping to quickly turn your ideas into working software 

Back-end development capabilities for software outsourcing

Modern enterprise software must integrate with your critical business systems and data, such as billing, inventory management, ERP, and CRM. Whether providing business analytics and reporting to help drive your strategic initiatives or aggregating data to back your enterprise web and mobile apps, a software development outsourcing partner can help you:

• Choose the right technology stack, combining the programming languages, databases, and server architectures that meet your needs 

• Develop an adaptive network and applications for both legacy and microservices-based architectures 

• Migrate apps and code to the latest technology stacks

• Integrate systems to extract the maximum value from your apps

• Get the most out of your data with data warehousing and analytics

Quality assurance and testing capabilities for software outsourcing

Continuous collaboration between quality assurance (QA) engineers and software development teams is crucial to your ability to deliver value to your users. With advances in web, mobile, and API test tools, building and maintaining automated tests for your applications has never been more effective. Your software outsourcing partner should provide the robust QA and testing required to ensure your app performs flawlessly, including:

• Building and maintaining unit tests

• Running automated API and UI testing

• Completing performance and stress testing

 

What should you look for in a software development outsourcing partner?

When you are planning a business-critical, enterprise software build, you need a software outsourcing partner who will invest in your long-term success. There’s no shortcut to due diligence.

Here’s a checklist you can use to start the process of selecting a software outsourcing partner:

1. 1. Track record: What track record does the vendor have with its existing clients? Does the vendor foster long-term, strategic partnerships?
   2. Client-focus: Does the vendor push pre-defined solutions or work closely with each client, investing the time to get to know teams and their unique needs? 
   3. Location: How will the vendor’s location(s) complement your project? For complex, business-critical, and enterprise software projects, look for a vendor with expert Agile developers in time zones that are within your normal business hours and who speak English fluently.
   4. Capabilities: What skills do you need to realize your vision, and does the vendor have those capabilities? Can the partner help you see around the corners and uncover possibilities you might not be aware of?
   5. Skilled, experienced people: How does the vendor vet your team members? How much do they invest in continued education and training? Do they look for skilled technology professionals who are problem solvers and team players? How do they support and encourage open communication?
   6. Purpose-built teams: Will the vendor assemble your team based only on the technical skills needed or what resources are currently available? Will they work with you to define the skills, experience, and work style you need, and guarantee the fit? 
   7. Agile approach: How passionate and proficient is the vendor with Agile development methodologies like SAFe? How does the vendor run distributed Agile teams, run sprints, and incorporate feedback? Can the vendor help you evolve your own Agile development practices?
   8. DevOps approach: How skilled is the vendor with DevOps, DevSecOps, and running a CI/CD pipeline that ensures you get value quickly and continuously?
   9. QA approach: Does the vendor have a dedicated quality assurance and testing practice, with robust automated and manual testing?

 

Outsource your software build with Gorilla Logic to increase velocity and achieve better business outcomes

As a custom software development outsourcing partner, our clients rely on our proven software development services to deliver value that helps them thrive. Our highly-skilled Agile “Gorillas,” based in the U.S., Costa Rica, Colombia, and Mexico, work in your time zone, speak your language, share similar cultures, and become part of your team. They work closely with you to understand your business and your customers. Whether you’re building a native mobile app or a complex e-commerce enterprise web solution, your team of Gorilla Logic software engineers can guide you through recommendations based on their deep experience and deliver the highest quality work on time, so you optimize budget, increase project velocity, and achieve business outcomes.