Last but not least, data security remains a critical concern for companies engaging in software outsourcing. Given the increasing amount of sensitive data being processed and stored, companies are searching for outsourcing providers with robust cybersecurity standards in place. As Gartner highlights, 45% of organizations will experience software supply chain attacks by 2025, which represents the scale of challenges businesses are bound to deal with. Now, software development outsourcing companies are responding by investing in advanced cybersecurity technologies, such as blockchain and biometric authentication, so as to protect their clients’ data and networks.
What are the types of software outsourcing?
In 2022, Deloitte conducted a survey with more than 500 business and technology leaders in order to get a better perspective on the status quo in the outsourcing industry. This survey identified three types of outsourcing services, namely:
- Traditional outsourcing is aimed at automating monotonous time-consuming tasks and serves the purpose of cost optimization. It resembles a transaction between two companies where the client usually seeks assistance in specific business processes such as network administration or customer support.
- Managed services offer cost reduction and transcend the boundaries of traditional outsourcing. This type of cooperation implies a hidden value that comes with a broad spectrum of services as well as intricate expertise. Managed services are built on a long-term partnership whose cost depends on the implemented resources and the ultimate outcome of the software development project. They encompass hosting/cloud operations, infrastructure support, etc.
- Operate services transfuse the company with top-notch experience and in-depth expertise. In addition to cost optimization, they are geared towards driving business value and are often incorporated into the strategy of the company’s growth. Enterprises opt for operative services when reaching for a highly cooperative partnership with an outsourcing vendor who is capable of comprehensive technical assistance. Operate services encompass the nuanced areas of strategy consulting, custom software development, or infrastructure management.
Over the years, outsourcing services have greatly evolved in their nature and design. Today, the majority of companies are choosing either managed or operate outsourcing services to find new vectors of growth. According to statistical evidence, operate services constitute a priority for enterprises choosing software outsourcing:
Figure 2. Deloitte Global Outsourcing Survey 2022
From cost reduction to highly collaborative technological support, the purposes for using outsourcing are many and varied. More companies at this time are leveraging operate services in order to benefit from this outcome-oriented technology implementation model. Typically, they leverage the potential of outsourcing services to:
- Benefit from end-user experience digitalization
- Integrate data-driven decision-making
- Build modern IT infrastructure
- Revamp talent acquisition practices
- Advance vendor management strategies
With the right outsourcing strategy, enterprises can achieve their long-term objectives and also advance their overall organizational performance.
How do you find the right outsourcing vendor?
Building a strategic collaboration with a software outsourcing company can be challenging. While some companies experience difficulties creating realistic attainable goals and prioritizing them according to their business needs, others need a greater understanding of how to set up effective governance arrangements with their technology vendors. Meanwhile, software outsourcing companies often grapple with similar complexities, from recalibrating their approaches to suit clients’ wishes to continuously adding improvements to their products and services. The question is: how do you find a technology enterprise that can get a pulse on your objectives and then position your company for long-term thriving?
Step 1. Rely on transparency. According to the Deloitte Global Outsourcing Survey 2022, 54% and 41% of respondents identified transparency and trustworthiness respectively as key qualities of a software outsourcing company (see Figure 3).
Figure 3. Deloitte Global Outsourcing Survey 2022
That’s why looking for a company that is open and honest about its development process, including the scope of potential change, technical risks, and human-related risks, can be critical to your project’s outcome. A company that strongly emphasizes a transparent and direct communication approach to defining the project’s estimate will deliver services and solutions that are not only technically sound, but also align with your specific needs and requirements.