Small and large companies rely on outsourcing for various reasons. Some businesses need it to get access to new technologies, increase productivity, access innovative talent, and much more. Unfortunately, this brings room for unplanned risks (such as security breaches), lower productivity, and poor management, just to mention a few.
Fortunately, there are other suitable alternatives to outsourcing you could go for.
1. Freelance Developers
According to Matt Barrie, CEO of Freelancer, there will be a permanent change in working from home and the use of freelancers by businesses. Companies can enjoy flexible costs — different freelancers charge different rates. Even better, you can enjoy a wide pool of skills with thousands of freelancers today.
Here are a few statistics that reveal the current state of freelance work:
- Freelancers make up 35% of the global workforce
- CNBC further adds that there has been a 25% increase in freelancer demand in 2021
- 70% of small businesses have worked with freelancers
- 81% of freelancers believe their employer will offer remote work after the pandemic
Benefits of Freelance Developers
Minimized Costs
One of the biggest advantages of freelance developers is the rates they charge for their services. The medium hourly rate for a skilled freelancer is $28. Additionally, there is no need to invest heavily in upfront costs such as allowances stipulated by strict legal restrictions. All costs are kept to a minimum with freelance workers, and the company only focuses on paying for the work delivered.
The flexibility of work schedules
Freelance developers can set their own working schedules and deadlines on top of their agreement with the client. And since most freelancers work alone, they are able to work faster than a larger corporation with multiple employees. Freelancers have learned how to streamline their processes over time, delivering products depending on their expertise.
Cons of Hiring Freelance Developers
Although freelance developers have several benefits, there are a few drawbacks to entrusting them with your project.
Risks of disappearing in the middle of the project
Many times freelancers get “bored” in the middle of the project and simply vanish. This would present a risk for the company, especially if a down payment was already made to begin the work. Even if you find a reliable talent, collaborating will be hard if their location is in a different time zone.
It is hard to find reliable, skilled expertise.
There are several loopholes to consider with a global pool of talent, such as finding the best talent. Even worse, retaining such talent is not as easy as it seems.
Miscommunication
Miscommunication leads to unintended results and time wastage for both the developer and the client. Sometimes, what the client has in mind might not reflect on the end result and freelancers find it hard to work with vague/unclear instructions. Additionally, language barriers between freelancers and clients tend to bar even the best developers from developing products that are matched to the clients’ needs.
2. Dedicated Team as the Best Alternative to Outsourcing
Basically, dedicated development team (DDT) entails onboarding professionals to your existing workforce on per need basis. Augmenting your in-house staff is handy when dealing with a one-time large-scale or on-demand project. Your dedicated team service provider does the recruitment job as you focus on spearheading high-value business tasks such as enhancing customer experience.
Dedicated development team is one of the best outsourcing alternatives and solutions in the IT industry for two good reasons. First, it connects companies to the vast pool of highly skilled talents with unique skill sets unavailable in their permanent staff. Secondly, dedicated developers help businesses complete projects that require resources beyond their scope. Think of it as a long-term scalability per-project or permanent basis.
Dedicated Development Team Pros
There are many other advantages of dedicated teams, including:
- High Levels of Adaptability and Flexibility
Hiring dedicated developers makes your business more flexible and adaptable to the prevailing demand. For instance, you can handle time-bound projects swiftly without turning down customer needs and preferences. That also means your business can diversify services or products for enhanced customer satisfaction. Dedicated professionals, whether offshore or onshore, will always bring something new to the table.
- Have Greater Control Over Teams
The best thing about DDT is that it allows real-time monitoring and greater control of projects. Unlike traditional outsourcing, the project’s success doesn’t entirely depend on the team. In return, this also mitigates privacy and security concerns.
Dedicated Dev Team Cons
Dedicated development team stacks up pretty well against other popular alternatives to outsourcing. However, it has some risks too. For instance, some companies can experience challenges when managing specialists alongside their in-house employees. These professionals are new to your company policies and collaboration tools. That means you have to take them through a learning curve. Also, some projects require in-depth organization knowledge or experience. It will take the dedicated team a while to learn and identify with that.
Fortunately, the above cons can easily be avoided if you do your due diligence in finding the right vendor.
3. Leverage a Global R&D Center
Global research and development (R&D) centers are growing in popularity in the IT industry. This model is a go-to option for businesses that want an excellent alternative to outsourcing when it comes to software development. In this model, a business sets its presence offshore, or abroad to access a wider pool of global talent.
The offshore team works under the umbrella of your brand, guided by universal corporate policies to steer your business towards its overarching goals and vision. In other words, a global R&D center immerses the external team into the root of your project as opposed to traditional outsourcing.
The Pros of Building a Global R&D Center
- Access a Larger Pool with Diverse Skill Set
Traditional outsourcing limits you to the size of the talent pool you can access. In fact, it’s almost impossible to build a cohesive team with shared mutual goals if you approach independent outsourcing contractors. On the other hand, an R&D center can include any number of professionals you want to work in the office.
- Localize Your Products
A global research & development center brings your business operations to overseas markets. With the development center in a specific location, you can optimize your products to match the needs of that market segment. You’re working with native experts who understand what locals need in a particular software product or service.
- Cost Reduction
Your go-to service provider will build an R&D center in a country with a lower cost of living compared to your main headquarters. In return, you get to utilize the lower cost of labor and relatively affordable facilities, such as office space. Even better, other infrastructures, such as internet access are also cheaper than in already developed countries.
- Market Expansion
A research & development center allows your business to expand its market reach to foreign geographical locations. As the business grows, so does its reputation in these regions. A good offshore partner will even brand the R&D space for you, so that customers identify with it.
Cons of an R&D Center as an Alternative to Outsourcing
The benefits of building a global R&D center comes with its challenges too, including:
- Miscommunication
Collaboration is more efficient when you can talk to your team members directly. Even if you resort to video calls, you won’t get the same experience as having an in-person engagement. Moreover, time zone differences can work to your disadvantage, especially if your project requires daily briefing.
All that said, with the right global partner and proper planning, these issues can be prevented. Make sure the vendor offers full HR support including one-to-one meetings, daily communication with the team and the client, and retention practices among other services.
Final Thoughts
Nearly 70% of businesses turn to outsourcing because it is relatively affordable. However, these alternatives to outsourcing offer better ROI at more affordable costs. Besides, they also come with other multiple benefits that traditional outsourcing can’t offer. For instance, working with a global partner gives you better control over projects. You also get to respond to change and demand swiftly, especially if you know how to choose outsourcing alternatives that align with your business needs and goals.
Leverage these outsourcing alternatives for competitive advantage and stay ahead of the game.
