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This page summarizes some of the benefits you can gain through outsourcing.
Saving money is the most commonly cited reason turn to outsourcing. Software development has become quite expensive, especially in the United States and Europe. By using outsourcing, organizations can save big on the cost of wages, benefits, office space, equipment, legal costs, even beauracracy.
While some of the savings incurred through outsourcing are intangible, Recent studies show that the "average" organization can expect to save between 10% and 40% through outsourcing relationships.
While these costs savings are significant, we've found that we're not an "average" outsourcer. The savings we return are generally on the higher end of the spectrum. Contact us to start learning about just how much you can expect to save with Novaleaf consulting.
Saving money's not all there is to outsourcing! Read further to learn more about many other ways outsourcing can help your organization.
In 2005 and 2006, clients of IT outsourcing found re-allocation of their internal resources either their #1 or #2 reason for engaging IT outsourcing.
Generally, the resources Organizations free up through outsourcing are human. By moving current responsibilities of IT employees to outsourcers, internal employees are free to work on new projects and tasks. This practice often has a high success rate, primarily due to an increased likelihood of being well defined and understood by both the client and outsourcer.
IT needs fluctuate a great deal. A classic example is the enterprise which needs 15 engineers to develop a product, yet only 4 to maintain it. What should this organization do with the extra 11 developers it has once the project is completed? Organizations, especially Western and European, are relatively reluctant to reduce headcount as a solution; they usually choose instead to design or develop new projects or project versions, train, test, or develop internal tools. The concern is not that these activities do not return value. They often do. However, if your organization's original intention was to focus on releasing a product as opposed to shuffling an organization to adequately consume human resources - not having an alternative is often frustrating and expensive.
The science of appropriately deploying resources based on demands over time is called Variable Capacity Management. It is one of the top reasons why organizations choose outsourced development. The concept is simple. As outsourcing is engaged on a per project or time period basis, clients can easily adjust the quantity of employees and skill set to meet their fluctuating needs. It's just another tool Novaleaf can help add to your arsenal.
This benefit of oursourcing can also be termed "focus on your core competence(s)"
Developing an organizational capability to successfully develop, release, and maintain software products is neither simple or short. As consultants, managers, entrepreneurs, and engineers, we've watched organizations ranging from SME to Fortune 500 incur vast resource, time, and capital expenditure to build software development capability. It is a process that can take months or years and generally costs millions of dollars. Furthermore, many organizations find that developing and maintaining an internal software development competence becomes a burden that significantly detracts from focus on concieving, designing, and specifying their software products.
Regardless of whether you are an existing software organization which understands many types of software, or a startup with little more than a project concept - you should at least consider outsourcing as a potnetial tool towards keeping the resources in your organization focused on their core competence.
For numerous reasons, including limited profit margins, shift of organizational focus, or a need to recoup employees to new tasks - existing products often are seriously considered for retirement. Sometimes, a outsourced team is the perfect choice to either increase profitability or keep your local team focused without having to drop product lines that have remaining revenue streams.