Outsourced software development is increasingly common as agencies turn to third-party vendors to take over projects and alleviate pressure on in-house staff. The global market for outsourced IT services is worth an astonishing $92.5 billion — and that’s only set to grow as more companies continue to leverage external teams’ capabilities.
There are two primary ways that third-party development partnerships can accelerate a company's growth.
According to research by Deloitte, almost 59% of the organizations outsource or reach out to third-party vendors to reduce or control their costs. Working with an external vendor means you’re paying only for their services without the additional expenses associated with in-house staff, such as sick pay, hardware, rent, software, and training.
When outsourcing your development process to vetted third-party vendors (such as Crowdbotics), you're able to connect with the world’s best specialists, irrespective of the geographical location.
Working with professionals on a project-by-project basis can bring pleasant surprises, too. While a company will provide software developers with a clear brief and targets to hit, the specialists use their own experience to identify opportunities and make the product even better.
There are a few different arrangements that agencies typically establish with third-party development partners.
Development agencies can collaborate with third-party app development teams to develop white-label applications. Such applications will be built by the outsourced vendors and sold by the agency under their own branding. A white-label app can also be a specific application built by a provider that is rebranded and resold by multiple resellers. In this way, the agency saves time on hiring specialists and reduces business costs.
Another scalable approach is to transfer an entire project to a third-party development team. This not only helps you generate more revenue, but also allows you to take on more clients, which is an easy way to grow your network. However, you should be extremely cautious in choosing a trustworthy third-party development team for your work, as it puts your reputation on the line.
If you are not outsourcing the client project completely, you can collaborate with third-party development teams to build it. You can have your team members split the work a with third-party development team to attain the desired product and minimize the chances of miscommunication.
If you have a great team of designers but want a specialized team of developers for the development process, you can get in touch with third-party development teams such as Crowdbotics to work on the development process for the client build.
For certain projects, you can also bring in developers from a third-party team to work as part of your team on a short- or long-term basis.
Each partnership type creates unique opportunities to grow your software development agency. Here are a few specific advantages.
Partnering with third-party vendors will help your agency to take on more clients, as you can focus on your preferred niches and hand off clients who aren't an exact fit for your team. This helps you capture revenue on projects that otherwise would have been a challenge for you to deliver.
Outsourcing development enables you to dip your toes into new sectors or technologies with minimal risk. For instance, if you want to try your hand at building an AR/VR application for the first time, having a third-party partner that specializes in AR/VR development gives you a backup plan if the build is unexpectedly challenging.
If you have hired a third-party development team to make an application for your client, and you own the application, you can also reuse its components on other builds. This approach will save you massive development costs in the long run as long as your agreement with clients permits the reuse of code.
You cannot use the same app with every client, but you can certainly reuse common modules, which can be built as separate reusable components or templates. This dramatically increases your profits from hiring a third-party development team.
We all have faced situations when someone from our development or design team had to leave either due to a medical or personal reason. Due to lack of resources in your agency, the project could be left unfinished. Here, the third-party development team can help your agency complete the project on time and preserve your client relationship.
There can be different types of partnerships depending on the size of your agency.
As a small business, outsourcing entire builds to a third-party development team allows you to get more done and entrust important tasks and processes to professionals without having to grow your full-time team in a significant way. Your top priority is growing your network and building a base of happy clients, which can only be achieved by expanding your available labor power.
If you're a specialized agency that has expertise in one niche, it's wise to either add third-party developers to your team on an on-demand basis or hire third-party teams for partial, collaborative development. If you specialize in design services, you can hire a third-party development team for the software or application development process and work together to build the desired product.
With ample funds and a specialized team on various domains, a large company should either choose on-demand hiring or add temporary developers to their team for several projects. This can be helpful for an agency to expand and contract the team as needed for maximum flexibility.
The ideal length of your third-party contract depends on your company's size and funds. If you cannot hire a third-party development team every time, you should get some white-label apps made for your agency, use them with multiple clients, and only maintain a short-term relationship with the third-party development partners.
But if your agency works with clients of different domains regularly and cannot depend on white-label applications for long, then you need to maintain a long-term relationship with your third-party development partners for sustainability in the market.
Will your agency benefit from outsourcing development process to a third-party development partner? Do you expect such a partnership to save time, energy, and cost?
If you'd like to discuss these questions in detail, then we recommend consulting a trusted third-party development team like Crowdbotics for a full assessment of your development strategy. Crowdbotics’ managed app development is a leading option for rapid app development, and our team has experience in a broad range of industries and technologies.
November 12, 2020