subject: Outsourced Development Drives Roi [print this page] Today, if we talk of custom application development, it is a costly process .By this I mean that any project with specialized software application needs involves increased cost of development. Now the main issue that comes to our mind is how to cut-down these costs. To cut down the increased cost of such projects, the best way is to outsource the application development process to lucrative destination.
Outsourcing can prove a very interactive option, especially for the clients for whom it is difficult to survive in their local market due to cut- throat competition. The option of outsourcing provides them the access to expertise of software developers, who have the potential to deal with challenges of custom application development and caliber to deliver the desired results to the clients. Beside this the main factor or we should say the most important factor is Quality at Competitive prices and reason behind this is low development cost.
This was about outsourcing and some of it effects which can help getting applications developed at low cost with better quality. Now the point that how it actually drives the ROI, if we talk of ROI it means the return on investments. Relating ROI with outsourcing, by this we mean how outsourced development can increase the Returns. The basic idea is to know what all benefit that outsourcing provides which directly or indirectly drives or we should say increases the ROI.
After having a brief on the two things and their relation we should move ahead discussing how outsourced application development actually drives the ROI. Below listed are some of the areas or benefits which show how outsourced development drives ROI.
Concentrate on Core business- Outsourcing help the companies to concentrate on the core business rather than investing time and increased cost on such developments which can be outsourced at a lower cost. By this it indicates that company can concentrate and may get more yield by its core business and on the other hand outsourced development helps in quality development and low cost. It is clearly indicated that ROI can be increased by outsourced development.
Avoidance of cost- There are many costs that can be avoided if company outsource the development process. These costs can be full infrastructure cost that is required for the development process such as Data Center, Security, Networking, Devices and software. Some other costs can also be avoided such as cost to be incurred for employing the developers. As these costs can be avoided by outsourced development it saves a lot of expenses which indirectly drives the ROI.
Reduced time to market- It takes a lot of time for the company for setting up an infrastructure that can support Software Development whereas on the other hand outsourcing helps in quick development which helps the company to enter the market in reduced time and compete with competitors in the local market. So ROI can be increased as company reaches the market and end customers very fast as compared to if they would have gone with development on their own. It gives them potential to compete in the market by reducing the time to reach market.
Increased Productivity- Productivity is directly linked with ROI or we should say they both go hand in hand. Increase in productivity increases ROI. Coming to outsourced development, it helps the company to increase the productivity as getting things done from experts is always better than doing it by itself that too by incurring large costs for the same. Expertise can provide products at least time with great quality.
There are many more areas which can have a positive effect and can drive the ROI towards the upper side. However, taking it to the different perspective there are some of the negative effects that may bring the ROI to lower side. And it actually depends on how an outsourcing firm is chosen.
Coming on to some of the negative effects of outsourcing that can have an impact on the ROI.
Hidden & irrelevant costs
Unreliable outsourcing firms
Loss of control
Negative Impact on business.
Now these are certain areas which actually depend on the outsourcing firm chosen. For say an outsourcing firm that is reliable enough to work with, most of the above aspect can be proved wrong. At the same time, if an outsourcing firm is chosen which is not serious with the work and not trust worthy, it might result in losses and ROI actually goes down by this.
So at the end we can conclude that outsourced development can raise ROI, considering that the outsourcing firm chosen is best in the services they provide and reliable enough to work with. A single wrong decision of choosing an outsourcing firm can lead the company towards losses and reduced ROI. So Outsourced Application Development is beneficial in terms of ROI only and only if the selection is done with understanding and experience of the outsourcing firm.
