Outsourcing: Staying Competitive in Today’s Most Influential Industry

Technology is progressing with unwavering speed. Outsourcing work can be a cost effective alternative to web and mobile development, but at what cost?

We are currently living in the wake of this generations tech boom. As a society, we have made more technological advancements in the past 10 years than we have at any point in time. The tech industry is transforming how we operate on a personal and professional scale, and shows no signs of slowing down. The way we socialize and do business has gone through dramatic changes forcing businesses to adapt with the fast paced environment. Tech is today’s most prominent industry; it is difficult to ignore its influence with new advancements being consistently implemented into our lives. A constantly changing dynamic calls for adaptable and highly skilled workers, making the tech industry’s workforce some of the highest paying and sought after positions in the world.

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With that being said, mobile and web studios find balancing high salaries and a positive bottom line increasingly difficult, often times unfeasible without significant capital. To stay competitive, companies have utilized offshore outsourcing firms and individuals to do the same jobs that US developers are doing for up to half the price. Sounds like a good deal right? CodeRed-I (CRI), a Scottsdale based App Development Company, has a unique understanding of outsoursing as they have worked alongside offshore studios in the past. Experimenting with their own IP’s (Intellectual Property), they have an informed impression of what outsourcing brings to the table. With most things, getting your hands dirty is the most effective way to see if something works. CRI has experienced just about all there is to experience when it comes to offshore work giving them a unique perspective and valuable outlook on the matter. With CRI’s expertise, we will assess both the positive and negative elements of outsourcing, as well as possible alternatives to offshore partnerships.

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Advantages

For behemoth tech companies like Apple and Google, offering their talent competitive salaries is not an issue. For smaller to medium sized businesses, maintaining a full house of skilled developers just doesn’t make financial sense. So what kind of impact can offshore outsourcing have for your business? The most obvious benefit to outsourcing is its cost. Now companies can partner with these firms or individuals to complete the same job at a competitive price. Outsource companies in India for example, often offer cost savings of around 60% based on the average cost of developing in the US. Along with saving resources, outsourcing allows you to shift your focus to your company’s core areas. Having an outsourcing firm out of the country allows you to essentially work while you sleep enabling your business to function on a 24-hour clock, giving you a competitive advantage.

Overall, if the right company is found, your businesses efficiency will be increased all while saving potentially 60% on development. Sometimes finding the right outsourcing studio can allow a business to add additional services. An example being an app development company that receives bids for websites. With the right outsourcing partner, that company can add a new revenue stream without removing resources from app development. There are certainly benefits to utilizing an outsourcing company, but there can be just as many risks.

Disadvantages

There are many obstacles one faces when working with outsourced workers. Dealing with companies that speak English as a second language, you can expect complications with communication. Whether it is the time difference or language barrier, general communication can be difficult and can lead to costly errors. An inability to enforce deadlines and milestones due to physical limitations can be irritating, where as someone in-house allows you to watch over progression and make changes on the fly. Holding these firms accountable to your performance standards can be an uphill battle and is never a sure thing. Giving these companies small jobs as a means to assess work turnaround and quality can be imperative to a successful partnership. When dealing with offshore HR or payroll companies it is important to remember you are exposing confidential company information so due diligence is required in finding the right fit for your business. Understanding foreign laws regarding business practices is crucial as they may not be consistent with US laws putting you and your clients at risk.

“Whether it is the time difference or language barrier, general communication can be difficult and may lead to costly errors.”

Often times a small business looking to outsource will find that the savings in time and money is too hard to ignore, even with the added risks. If one must seek out offshore help, finding balance between costs and quality is manageable if you invest time in getting to know that company. For those businesses with no development background, this can be a very unnerving experience. Once development or coding begins, the client often has no means of knowing if the code is correct or suitable for deployment within the App Store (IOS, iPhone, iPad) or Google Play (Android). Testing companies with small projects and physically visiting their office builds trust and can minimize risk. Unfortunately, even that is not always feasible.

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Relationship Building

CRI has had success and shortcomings when working with offshore companies. Experimenting with their own IP’s they have a unique understanding of how outsourcing works. They discovered an alternative solution to work delegation that offers businesses more consistency than outsourcing. CRI began to shift its focus from outsourcing, to building mutually beneficial relationships with stateside companies. Having the perspective that there is more than enough business to go around, CRI began seeking out studios in Arizona and Hawaii that could help with an overflow of web projects. Wanting to focus more on mobile applications, CRI partnered with Hawaiian web studios to help with work overflow in turn for app referrals. A state like Hawaii tends to shy away from partnerships with “mainland” companies due to many jobs going to the mainland. Fortunately, CEO Tina Machado is a native to Hawaii and took time to fly out and meet these companies face to face to build trust. This formula continues to show promise as it benefits the industry and all parties involved. Investing in relationship building with American companies allows the industry to keep jobs stateside all while building up the trade locally.

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CodeRed-I’s Take

More often than not, CRI will receive calls from clients requesting that they look at their code. They are usually concerned that milestones are not being met or the general integrity of the code is at risk. Having a third party to protect your asset, such as your app or website, gives your company a peace of mind that often does not come when dealing directly with outsourcing companies. CRI offers a “big brother” service called Critics of Code. Critics of Code serve to give businesses unique oversight by utilizing experts to supervise second party production. A team comprised of CRI’s Sr. Developers and Software Architects will keep a close watch on development, notifying your business if the code is not up to pace with milestones or is not functioning correctly. CRI’s CEO Tina Machado often compares Critics of Code to getting a second opinion from a doctor or car repairmen, “Know what you don’t know. Not all of us are qualified to form educated assessments when it comes to code, so let someone with experience guide you,” she says. This way you will know early on in development if there is a issue, not after development is complete and it is too late to correct it. CRI will protect your investment, and understand your concerns because they tested the market when they outsourced to help develop some of their own IP’s. CRI firmly believes in relationship building with stateside businesses. Quality of work isn’t sacrificed and although it may not be as cheap as a developer from India, it is more cost effective than hiring a full team of developers.

“Know what you don’t know. Not all of us are qualified to form educated assessments when it comes to code, so let someone with experience guide you.”

Offshore outsourcing serves to cut time and cost dramatically. Thoroughly screening offshore firms and having knowledge of their development process one can lead one to have a very positive experience. If a company cannot commit the time to proper screening and has no background in development there is a steep increase in risk. Hiring a third party like CRI’s Critics of Code to oversee production and give strategic feedback provides an informed second opinion that makes sense and inevitably saves time and resources.

It is important to remember every business is unique, varying in needs and issues that require unconventional solutions. When looking to outsource, take all these things into account so you can best assess what course of action is best for you and your business. Serving as a constructor of ideas and guide to the unsure, CodeRed-I is your mobile app source. Stop by their Scottsdale office for your free consultation.

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