Software Development Outsourcing Trends: What to Expect in 2022

Software development outsourcing has garnered wide popularity over the past years due to several reasons such as professional development services, top-notch skill set, time and cost-effective development, better focus on key business activities, and others. As stated in a recent report by Statista, the global IT outsourcing market has already surpassed $92 billion and the software development outsourcing sector has a significant contribution to it.

Starting from startups to medium or growing businesses - software development outsourcing can be a good fit to meet the product requirements, and address the key problem statements of the target audience. Generally, there are three ways to develop a product - hiring an in-house team, building it from scratch on your own, or outsourcing it.

You can either opt for the development process, management, or complete end-to-end software development process for outsourcing, the last one is the most effective and popular one. To make the best decision in software development outsourcing, you need to have proper knowledge of software development outsourcing trends. Let’s start from the basics and delve deeper.

What Is Software Development Outsourcing?

Software development outsourcing is defined as the process of outsourcing the software development process from a third-party company, team, or service provider. Software development outsourcing is highly efficient in turning your software development plan or idea into a successful product. Software development outsourcing offers a complete solution for professional development planning, features and solutions outlining, tech stack research, MVP development, testing, and launching.

There are mainly three types of software development outsourcing process:

1. Onshore Software Development Outsourcing

Onshore software development outsourcing is the process of outsourcing your software development from the same country as yours or of your company. Here, the team who develops your software operates from the same country and this makes the communication process better while improving the overall transparency.

While for many ones onshore software development seems to be a good and hassle-free option, it may or may not be that much effective based on your country of residence or where your company is based at.

2. Offshore Software Development Outsourcing

Offshore software development refers to the process of outsourcing the software development process from a third-party team, company, or service provider from a country other than the country where your company is based.

Offshore software development is highly sought after among startups as well as growing companies. Generally, in offshore software development, the communication and software development process take place remotely which reduces the development cost and helps optimize the resources. Furthermore, it gives you the liberty to choose the offshore development country as per your preferences to reduce the development cost.

3. Nearshore Software Development Outsourcing

Nearshore software development outsourcing, as the name suggests, is when your outsourced software development team works in the same time zone. This type of software development outsourcing is a combination of both onshore and offshore software development and is more cost-effective than onshore software development.

See More: Outstaffing vs. Outsourcing vs. Managed Services: Hire the Right Team for Your Software Development Needs

Software Development Outsourcing Trends

If you are planning to outsource software development, then you must be well aware of the current and upcoming trends to make the best decision possible. Here’s a list of the top software development outsourcing trends in 2022 and beyond.

1. Unleashing the Power of Cloud Technologies

The application of cloud technologies in software development outsourcing got prominent over recent years. Due to its several advantages such as fast and accurate access to information, better connectivity over the world, better efficiency and productivity, improved infrastructure, and others, cloud development has made its place in the software development outsourcing process.

According to a recent report by Statista, the global cloud applications market is set to reach $168.6 billion by 2025 from its benchmark of $133.6 billion in 2021 while growing at a 4.8% CAGR. No doubt that it remains one of the top software development outsourcing trends in 2022 and the coming years.

2. Growing Adoption of RPA

One of the noticeable software development outsourcing trends in the current years is the high adoption rate of RPA or Robotic Process Automation. Robotic Process Automation is defined as an advanced software technology that helps build software robots that are capable of doing various labor-intensive activities with better precision and ease.

Software development outsourcing companies are adopting RPAs at an increasing rate to automate the relevant business processes, reduce risks, and errors, and to optimize the overall development process. As per a recent Statista report, the global RPA market is set to surpass $10 billion by 2023 from 4 billion in 2020 and this is majorly driven by the rising adoption of RPA by software development outsourcing companies. This is definitely going to remain one of the top software development outsourcing trends in the near future.

3. Opting for Multiple Vendors

Businesses are no more just opting for a single software development outsourcing vendor, but leveraging the skills and expertise of multiple vendors. This helps them cater to their every software development requirement, the requirements for proper skill sets for specific areas, or the needed real-time expertise in several fields.

It’s been a while since businesses are preferring assorted teams and vendors from diverse backgrounds and with differential professional expertise and this is set to thrive as one of the key highlights of software development outsourcing trends.

4. More Emphasis on Delivery

It’s been a while since businesses have been focusing on the delivery of software more than ever. Timely delivery of user and market-driven products, ensuring the proper market placement of the product, or gaining competitive advantages over other existing products - are some of the most crucial factors related to the product delivery approach and time. And even in the upcoming years, this tends to be one of the top software development outsourcing trends.

5. Higher Focus on Cybersecurity

Increased focus on cybersecurity during outsourcing product development is one of the prime software development outsourcing trends that has taken the spotlight in 2022. Taking care of the proper security standards, adhering to the relevant security compliances and guidelines, and managing proper authentication and access controls - are some of the key areas that businesses are focusing on during software development outsourcing and it is subject to remain a significant software development outsourcing trend even in the unforeseeable future.

See More: KPIs for Outsourced Software Development: What Are They, and Why do They Matter?

Software Development Outsourcing in 2023: Why Do Companies Outsource Software Development?

If you are still wondering about why outsourcing software development is a good option, then read on. Here we are going to walk you through the top reasons why companies outsource software development.

1. Cost-effectiveness

If you are running a startup or planning to start one, then outsourcing software development is undoubtedly the most efficient and cost-effective option to choose. Even for medium to big businesses, outsourcing is the best way to get your product developed while ensuring high quality and without investing heavily.

All you need to do is, opt for a region that offers the most cost-friendly software development services such as South Asian countries like India, China, and Japan, to name a few.

2. Professional Expertise

If you want your product to be developed under high professional expertise without making a hole in your pocket, then software development outsourcing can be the best option for you. It lets you get your product under a high level of professional expertise and ensures that your product can meet all the key goals of your product development.

3. Resources Optimization

No matter whether you have very limited resources or want to optimize them further, it is recommended to opt for a good software development outsourcing company. As professionals with real-time experience, they will know how to develop your product most efficiently while optimizing time, money, and other resources.

4. Market-Driven Product Development

Just developing a product is not enough, but developing a product that fits the current market is the goal. Through software development outsourcing from an experienced third party, you can be ensured of launching a product with competitive features and solutions. This in turn will help you secure the market position and beat the competition later.

5. Support & Security

For in-house software development as well as building software from scratch, support and security is a major issues. Be it technical glitches or ensuring impenetrable security in the cases of certain security threats - dealing with all can be a challenging task.

Furthermore, you may not have the required time and expertise for this. Outsourcing software development, on the other hand, takes care of this by offering you long-term security and support solutions provided you choose the right company.

Undoubtedly outsourcing software development is the best way to develop a high quality product with highly sought-after features and solutions. And if you are yet to decide on this, now is the time. We, at Third Rock Techkno, offer an extensive range of software development services and solutions starting from app development to voice development. Check out our portfolio and get in touch for a free consultation.

FAQ

1. How much does it cost to outsource software development?

The cost to outsource software development majorly depends on the region from where you are outsourcing the software development solution. While in the regions like North America, Europe, and others the cost ranges from $50 to $200 per hour or even more on an average, the countries like India is well-known for offering the most affordable and quality software development solutions which cost $16 to $52 per hour on an average.

2. How to successfully outsource software development?

You can successfully outsource software development by planning your requirement, resources available, budget, and others. It is the best to go for a experienced software development agency to ensure quality and reliability.

3. Why outsource software development?

You must consider outsourcing your software development if you want to develop a high quality, competitive and market-driven product. Also, it ensures cost and resources optimization while developing a quality product.