Technology leaders today have a host of options for building their business-critical software products. But with increased competition to recruit and retain top technology talent, choosing how — and where — to build productive software teams is as difficult as ever.
According to Statista, Enterprise IT spending is expected to reach $672 billion globally in 2022, an increase of 11 percent from the previous year. In the U.S. alone, as reported by the Bureau of Labor Statistics, employment needs for software developers are projected to grow by 22 percent from 2020 to 2030, with an average of nearly 190,000 anticipated openings each year.
A recent McKinsey study points to critical future workforce needs that intensify the demand. Survey results show that almost 90 percent of executive respondents say their organizations face skill gaps, either now or within the next five years. And the areas reported to have the greatest need are data analytics and IT, mobile and/or web design and management.
Over the past decade, software delivery outsourcing has become an essential process adopted by many successful companies seeking to scale their operations by partnering with a product design and development firm. Outsourcing software development or accompanying IT ventures has become one of the essential methods for optimizing an enterprise’s software production and expenditures.
As part of the worldwide trend towards outsourcing, offshore and nearshore software development outsourcing has earned special attention from entrepreneurs and technology leaders. This subcategory of outsourcing gives businesses exceptional benefits and possibilities to grow with minimum expenditures.
Let’s dive into the details of trends within outsourcing digital product development.
Benefits of outsourcing software or product development
Innovation and advancements in technology, changes in the way companies operate as an outgrowth of the recent pandemic and increased remote work arrangements, and increasing industrial applications for technology all increase the urgent need for software development and delivery.
Timing and efficiency are critical elements that outsourcing addresses, whether the partner is located offshore or nearshore. Outsourcing also provides additional benefits:
- Cost-effective solutions
Companies are faced with competing needs in software development: getting the details right and maintaining velocity to stay ahead of the competition. Recruiting, hiring, and equipping an in-house team is a costly and time-consuming proposition, especially as average salaries in the U.S. for software developers well exceed $100K. Outsourcing, whether offshore or nearshore, offers a means to save on your finances while achieving high-quality, timely results.
- Extensive talent pool
In the U.S., demand for software development talent outstrips the available candidate pool. On average, 65,000 computer scientists and software engineers graduate in the U.S. annually in recent years, a number that falls far short of the projected 400,000 openings. Outsourcing either offshore or nearshore expands the accessible talent pool exponentially. Handing over the creation and management of products and services to a team of offshore specialists increases the chances of choosing the right talent from this significantly larger group. Experience shows that popular offshore and nearshore destinations boast large numbers of tech experts producing sufficient quality work to meet requirements.
- Flexibility and task-specific specialists
Offshore and nearshore projects enable technology leaders to hire experts for a specific project for short- and long-term involvement. Outsourcing provides the flexibility to ramp up for a product launch or scale back as needed. Tapping into the abundant global or nearshore talent pool increases the ability to find the right solutions architects or highly trained specialists needed for any IT project.
- Faster recruitment and results
Driven by speed to market or the speed to stay in the lead, timing is key in creating the team to get the job done. Adding to or building an in-house team takes time at every stage, from recruiting to hiring and onboarding; and a comparatively limited talent pool makes the task more challenging and time-consuming. Choosing to outsource expedites the process, leveraging the resources of a complete team structure including developers and managers that are immediately available and experienced in delivering results rapidly.
Read also: Managed IT services benefits and advantages