Startups can cut costs and reduce risks if they outsource their software engineering, especially if combined with a strategy of growing assets over time, building up in-house talent and ensuring quality of deliverables throughout the software development lifecycle.
There are many good reasons for a startup to outsource its software product and solutions development, but as so often, the devil is in the details. It is vital to have a good grasp on how software assets should be built and kept within the startup while ensuring that the outsourcing partner is capable of providing the agility and brains required, without being an added burden to an already thinly stretched startup management team.
Items to consider when selecting an outsourcing partner
- Skillset and available references in the required domain
- Time needed to start a new project with a reasonably sized team
- Commitment to take on projects without detailed concepts and system requirements (again, is agility and enough brains available?)
- Is the outsourcer able to commit project management and team leading experienced in the required domain? Is it experienced working with agile methodologies? Can it potentially even supply direct support for an inexperienced product owner in the startup?
- Ability of the outsourcer to commit to fix problems and errors at short notice, to refactor and alter artifacts with passion as requirements change
- Ability to provide code excellence and software craftmanship. Refactoring software should be a joy and not a pain and it is important that a future engineering team taking care of further development and maintenance in the startup is enabled to do so
- Engineering costs over project life, not only cost per person-day or person-hour, but how costs of engineering typically develop through a projects lifetime
- Agility and capability of software & QA engineering and specifically how QA is integrated with the rest of the engineering teams
- And of course, try to figure out if the outsourcer match the chemistry of the startups own team; It is indeed an extension of the team, not a completely separate entity and the success of the solution or service provided relies on how well this combined, distributed team works together
Common reasons why outsourcing might be a good move for a startup
One of the direct, tangible benefits for a startup outsourcing its software development efforts is cost-cutting, where fixed costs are converted into variable costs. The saved money can be used for investing into other areas providing direct revenue, which in turn should make the company more attractive to private equity investment.
Professional support and no delay to get new projects off the ground
Working together with a specialized company, like enprovia, provides the startup with direct access to skilled people having many years of hands-on experience in the areas where the startup is still lacking experience. Having a partner that can directly take on new projects without additional training is a further benefit working with an outsourcing company. Starting up a software project in-house might easily take months, especially considering the hiring process, whereas with an outsourcing company you normally talk days or maybe only a few weeks to get a new project set up and rolling.
No office space required and lower labor costs
No recruitment and no training required, no space for the software engineers needed and of course, no other employment related costs are coming to play either.
Reduced risks while staying focused on the core business
Outsourcing the software engineering to a specialist company that is able to provide smart people, potentially including project management and team leading, reduces the load on management, making it possible for it to focus on developing the core business thereby reducing risks.