One of the biggest questions that tech startups face in today’s times is whether they should develop the product in-house or outsource it to external teams. That’s why it’s a mandate for you to know the answer of : why is outsourcing important for startups?
There are multiple options available in the market to execute your task. However, when it comes to startups, they have a conventional thinking that outsourcing is for enterprises only.
You can certainly outsource product development as a startup and this is important to your business as well. Here’s why-
There are multiple reasons behind it lets start with cost.
Cost cutting: Managing budget is a big challenge for startups. However, outsourcing helps a lot to do it right.
In fact, according to a research, 87% of US companies outsource product development to save cost.
The risk is lesser: In case of new products whose market is yet to be tested, outsourcing plays an important role in mitigating the risks of trying out something new.
Since the outsourced teams work on flexible models the risks are definitely lower.
It’s Faster: Outsourcing the development helps in faster development with Agile model and helps in tremendously reducing the time to market.
9% people globally outsource only to fasten their process.
Technical Expertise: You may be new to market. That’s not an issue until you have technical expertise with you. If you already have that, then it’s good, however, if you don’t then its better to outsource.
15% people globally outsource to access expertise
Free up time and more focus: For startups, investing time to high priority things is very important. When you outsource, you free up your time for other important things. This helps a lot. This image will show you some other reasons why is outsourcing important:
You can also check this list from entrepreneur of successful startups that were built with the help of outsourced teams.
Now, as you know why is outsourcing important, here are some key steps for your startup to effectively outsource product development:
Choosing the right vendor for outsourcing application development is a must. An outsourcing company with expertise in the required development skills, will surely be helpful. Picking up freelancers is definitely not advisable, as they cannot be relied upon, for taking up product ownership.
One of the important points to consider,
while selecting a vendor for outsourcing development is flexibility of hiring models.
This helps the startup choose a hiring plan that will optimize the costs of outsourcing in accordance with the development requirements.
It is also important to evaluate the portfolio of the hiring vendor to understand the level of specialization in different business verticals.
The second most important step in outsourcing your product development is to define the scope of the project. First you need to convert the business idea into a business plan and then put down what all you need from a successful product. Defining the technology with which you wish to develop your product is another crucial decision. This also helps in defining the skill levels of the teams you wish to hire.
Once the scope of the project is defined and the vendor for product development has been chosen, the service level agreement with the vendor can be created.
This helps in ensuring that the outsourced teams are working according to the plan of action.
The outsourced teams must be clearly communicated about the expectations and the milestones. This helps in developing mutually beneficial relationship with the outsourcing partner.
Keeping in touch with the outsourcing partner on a regular basis and reviewing project work in progress on a constant basis is important. This is helpful in improving project productivity level. Motivating remote teams with incentives and appreciation is helpful in getting better business results.
Overall, a continuous communication helps you to finish tasks smoothly.
We Brew Our Blogs Especially For Startups, Agencies & CTOs. Subscribe & Get Latest Updates Straight To Your Inbox
Save Upto 50% Of Development Cost and Get 2x Faster DeliveryCONTACT US
There are lots of factors to consider while choosing the right place to start you technology business. Doing a thorough study before starting up can help you take the […] - Read More
There are many key challenges faced by businesses who are looking for software outsourcing of their projects to third-party software development companies. The first […] - Read More
Building an eCommerce business can be a huge challenge as it involves more than what meets the eye. The site must be well maintained and well managed so that it can get […] - Read More
India is often referred to as world’s ‘back office’ as the country over the past two decades has established itself as a global hub of outsourcing services. The […] - Read More
Getting help from IT consultants in overseas is nothing new. Whenever you need it you contact your tech partner and start your project. However, do you know that being […] - Read More
Running a successful business is not easy. A lot of processes are needed regularly for it’s smooth functioning. Bigger the company, more perplexing are the functions. […] - Read More