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Mature software product companies can often be skeptical about contracting third

parties for the development process. There are reasons to stay cautious, but after all

outsourcing the development of some of the company’s software makes sense and

deserves a thorough consideration. This guide takes a deeper look at common doubts

and examines the ways to leverage a cost-saving outsourcing solution.

‘Why should we outsource our core activities?’

You shouldn’t. Outsourcing is by no means an all-or-nothing choice. When you own a

portfolio of products with different market shares and budgets, it can be reasonable to

focus on the key competencies and let someone else do the rest.

So what is worth outsourcing? In the first place, consider some of your non-core

products with independent codebases to mitigate security and intellectual property

risks.

You can also ponder creating a specific or standalone functionality of your product,

namely:

Mobile version. Avoid expenses associated with creating your own mobile

development department with a device testing lab. Moreover, a vendor

specializing in mobile development can provide expert guidance in selecting

the most suitable platform and help you to solve the dilemma of

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hybrid/cross-platform vs. native apps. Additionally, thanks to their

experience in releasing mobile apps such a company would know all about

obtaining the necessary certifications (as in the case with iOS apps) thus

shortening time-to-market for your app.

BI. Reporting functionality is always in great demand among enterprise

software users. However, to set it up requires specific development skills,

such as query optimization, creation of OLAP cubes and data visualization.

Since reporting functionality is only loosely coupled with transactional

functionality, it can be easily outsourced.

Data connectors and converters. Ensuring that your product is able to

integrate with other systems can boost sales. As there should be many

connectors and all of them are relatively independent modules, you can

think of commissioning someone to develop them.

‘How can I outsource to someone who does not know our

domain?’

Generally, a company’s substantial domain knowledge relies on the experience of its

product managers and business analysts rather than the expertise of separate

developers. It is the former ones who use their understanding of the end-customer's

needs to create detailed specifications and backlogs. At the same time, what is primarily

required from the developers is excellent technological competence to create the

product following these guidelines to the letter. So when choosing a vendor, you should

consider the following checklist:

Vendor’s technological competence to implement your specification or

backlog

Relevant domain experience so that the developers and testers can correctly

interpret the guideline

For example, ScienceSoft offers to step in providing full development, testing and

management capacities with only a Product Owner on the customer’s side. For 26 years,

software companies have been outsourcing to us the development of complex

products in multiple domains. Among them there have been:

Payment card processing

Healthcare and pharmaceutical solutions

PDM and PLM software

Image processing

CRM and ERP systems

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Construction management systems

Scientific applications, and others

‘We tried outsourcing, but it failed’

As it is with any other service, software development outsourcing is an industry with

dozens of models and offerings. Unsurprisingly, some were not designed to meet your

requirements. But is it a reason to dismiss the entire idea of outsourcing as an

instrument to help you achieve the goals?

By way of illustration, ScienceSoft has more than 200 customers from all over the world,

but not all of them wanted to outsource prior to communicating with us. However, 85%

of our revenue comes from the customers we have been serving for more than 1 year.

‘Outsourcing brings lower-than-expected savings’

Outsourcing is often mistakenly used as a synonym to low prices, however the real

value of cooperating with software vendors cannot be measured exclusively in effective

cash. There are many a cost-saving factor to consider as well as the double bottom to

misguidedly attractive rates. Let’s take a closer look at the following cooperation and

competition strategies in software development outsourcing.

Low rates – the other side of the coin

You get a commodity – in other words, cheaper human resources – rather than

complete services. Indeed, it might be a good idea to expand the development team

and avoid costs of hiring new personnel on site. But at the end of the day you will have

to consider other expenses driven by managing the project on your side and integrating

the development teams. Additionally, in case you want to increase your market share

with a new product or new features you might need to hire technology experts such as

architects, database and framework specialists.

Thinking differently – a cost-effective solution

When you choose a vendor that could take over the responsibility for product delivery

and solve your problems instead of simply providing the means, you will enjoy the

hidden benefits that also add up to your final revenue:

Improved management: A consistent team of a manager (Scrum Master) and

developers with a unified and similar to yours approach can shrink delays

from hours to minutes

Minimized communication risks: When all team members are located in a

single working place and are already familiar with the processes, it can speed

up the process considerably

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Valuable resources included: You can engage technology experts whenever

you need them – they are already integrated in the team

The bottom line is that when weighing the cost-saving effects of outsourcing vs. in-

house development you should not rely merely on the rate advantage. It is a good idea

also to take into account the savings resulting from an improved management and thus

shorter time-to-market. For instance, ScienceSoft’s processes enable our customers to

shrink the time gap between an idea and its implementation by 30% - 70%.

Case study

The following case study provides a comprehensive illustration to the points presented

above and shows how software development outsourcing can grow into a strategic

partnership.

Customer: a European company with 200 employees and a global leader in image

processing with an extensive portfolio of innovative products. Their solutions help to

enhance user experience in all aspects of digital imaging. The Customer wanted to

create a cross-platform desktop application to make image processing easier for

professional photographers.

Solution: With only a Product Manager on the Customer’s side, ScienceSoft assigned a

team of a Scrum Master, 4 developers and 3 testers to work under a T&M arrangement.

The team provided a careful planning and architecture design and made some

proposals to reduce the development costs and improve the product features.

ScienceSoft was delivering the project according to the budget and release plan

provided by the Customer. To ensure effective and agile development, not only the

Scrum Master but the entire team participated in regular correspondence, conference

calls and meetings with the Customer’s Product Manager.

The project was successfully finished in 4 months. ScienceSoft went on to enrich the

tool with new features and cooperate with the Customer on further development of

desktop and mobile applications.

About ScienceSoft

ScienceSoft is an established software development services provider with operations

in the USA, Europe and South-Eastern Asia. The company is a partner of IBM, Microsoft

and Oracle.

To discuss the opportunity of outsourcing software development to ScienceSoft, please

call +1 214 306 68 37 or e-mail contact@scnsoft.com.