Pinpointing the exact moment that IT outsourcing began is not simple but many point to the same key event when Kodak asked IBM to not only build them a data centre but to run it for them. This happened in 1989 and the 90’s started to see a rise in collaborations and ultimately led to 3 different types of outsourcing in software development.
Local - where an agency/contractor(s) were found in the same country to develop some code
Nearshore - Finding people or a company in a different country but still close by and on similar timezones
Offshore - Where we are more and more today, with the use of contractors and agencies in countries all around the world
The reasons for doing this haven’t changed much over the years
- A lack of skills - Kodak selected IBM because they didn’t know how to run a data centre. They could have recruited a lot of new people to do this (as was always the way) but they decided it made more sense to use someone that could already do this. Nowadays, the reason has evolved to being about a lack of these skills locally. So many businesses just struggle to find good developers that it’s easier for them to look in other countries and either contract to work exclusively for them or use an agency to get resources for a specified period of time
- Cost. Money quickly became the dominant reason for businesses to outsource when they realised two key facts
- Developers in places like India or Eastern Europe were much cheaper than most of the western world, where developer salaries have continued to grow exponentially
- They don’t have to hire people longer term. They can use these external resources for a shorter period and then end a contract - basically only using developers on a project-by-project basis
Whilst these are the main reasons/benefits for outsourcing, there are other reasons why outsourcing has been popular.
- You get a wider variety of skills. By accessing an agency, you can find a great selection of skills. As a general rule, you would have to employ a much larger internal team if you wanted to cover all these skills in-house but with outsourcing, you can access different people and skills for the time you need them
- Domain and sector knowledge. If you select carefully, you’ll find it easier to discover someone externally that has developed within your arena
- Match targets to performance. You can match required outputs to payment, if the agency doesn’t deliver then you don’t pay them, so you have more confidence in the value you are getting
Challenges With Outsourcing
Outsourcing is not without its challenges though; there are many good reasons businesses don’t choose that route or when they have, it doesn’t work out for them. Here are some of the main reasons why outsourcing software development doesn’t work for everyone.
- It is a much bigger job to make sure the outsourced developers understand the culture and needs of the business as they will not be an integral part of it. Depending on how the business works, this is often a big blocker for a business selecting an external agency
- Communication can become a problem when working in a language that is not native to the agency, which is a large concern for smaller, local businesses
- You end up employing additional internal staff members to manage the outsourced agency just to ensure they are working as you expect or pay additional fees to the agency to have a project manager at their end
- Long-term ownership and quality concerns. By not being a permanent part of the team, there is less incentive for the developers to code to the highest level of quality. This means that long-term you might have issues with bugs and other forms of technical debt
- If the agency is not diligent and following best practices, you run the risk that the documentation will be of a lower quality, which will also cause long-term problems for the business that needs to maintain the code as well as evolve it
- You might initially be able to vet the developers you use but as time goes on they will add new members to the team to cover the work or new skills and you’ll be relying on someone else’s recruiting processes or spending a lot of time continually vetting team members for quality
There is Another Way
The good news is that there is a third option which can mitigate some of the weaknesses of both the in-house and outsourcing solutions. For the past 5 years, no-code platforms have become increasingly popular with businesses, project managers and founders. No-code has built up its own eco-system, including excellent ways to solve the developer shortage.
These no-code tools allow businesses to build new products, websites and apps without needing to write lots of code, they allow non-technical members of the team to get involved, give more power to product managers and they streamline the whole development process.
Why is no-code so popular? That is an entire article in itself but to very briefly summarise
- It is allowing those not as skilled in development to build products or at least get more involved
- With so many features and functions pre-built into the platforms, the development cycle is much faster
- Faster development, a wider range of developers and cheaper resources make it a cost-effective approach for businesses of all sizes
But the single most significant benefit of the no-code revolution is that it has allowed many more people to become software developers, allowing it to combat the largest issue in modern development, a lack of development resources.
This increase in available, affordable talent is allowing businesses to build large external teams that are dedicated to their project. Because they are working on the same platform, many issues with outsourcing don’t happen.
For example, with functions like logins and registration paths built into the platforms, fewer bugs are created within the core functionality, leaving fewer issues for later.
Building the Ideal Team
When you compare the strengths and weaknesses of the different approaches to development that we have discussed, the logical conclusion is to combine the benefits of outsourcing with no-code. Take the best of both worlds and build a team of no-code experts that can develop whatever project you need - it couldn’t be easier.
You start by talking to an expert on how to build a team. We have people that have helped do this for hundreds of businesses and will understand the project you are looking to build and have access to thousands of the most qualified no-code developers on the market, who are skilled in every major no-code platform.
Once the project is fully understood, our team will build the perfect team for you (developers, designers, PMs - whatever you need) and agree a fixed monthly fee so you have complete control over costs and timelines.
You’ll be able to manage the team completely through our platform, plus we also use the platform to monitor and ensure your project is going to plan.
By building this team and getting the best of an outsourced approach using no-code, you can get so many benefits and avoid the pitfalls of the traditional and outsourced route
- Cost. Offshore outsourcing is more cost-effective than traditional in-house teams but by using no-code tools and developers, you’ll notice a significant cost reduction on even that solution
- Communication of requirements is better for a couple of reasons (a)You can build a team that you are confident will be fluent in the language needed. (b) The nature of the no-code tools means its easier for the product lead in the business to show the developers what they are looking to build, not relying solely on written user stories
- Hybrid working is ideal in this model. You are all working off the same platform that controls what is possible and allows everyone to see what is happening, meaning it is much easier for the internal team to take on the code once complete, which is again positive for the confidence in the long-term quality of the code
- The platform you have access to and with our team checking in, means it is better managed and you don’t need a full-time person within the business. We suggest the normal sprint lead should be able to manage things at the clients' end
- All the developers we use have to go through a university course that we have developed. This ensures that everyone on your team is of a very high standard - we believe this approach has left us with the top 1% of no-code developers in the market
If you’d like to kick this off with a no-risk, free consultation call, we will help you build a roadmap for your project and you are clear to walk away without any attachments if it doesn’t feel like the right approach for you.