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How to Outsource Product Development

21 Mar 2023

You would agree that the time-to-market of a software product is one of the critical make-or-break factors for its success. And, if you run a business, lead an emerging startup, or experiment with a new idea, you must be looking out for optimal software development.

While this inclination drives many decisions, the dilemma of in-house vs outsourcing product development has prevailed over the years. If software development is not your forte, why attempt it in-house? Especially when outsourcing product development (OPD) can offer several benefits. From providing skilled and experienced resources to best-in-class development processes while managing everything – from the concept to the deployment stage. Further, you can delegate product development responsibility partly or entirely to a third party so that you can focus on what you do best, i.e., running your business.

This blog will discuss the specifics of product development outsourcing, what and when to outsource, its benefits, factors to consider before outsourcing, choosing an outsourced development company, and more.

Table of Contents:

What is Outsourced Product Development?

Outsourced product development (OPD) is a business strategy for hiring a third-party service provider to develop, design, test, and launch new products or services. The third-party service provider can be located locally or overseas, depending on the requirements and objectives of the company. OPD allows companies to focus on their core competencies while outsourcing product development activities to a specialized provider. They can manage the entire product development lifecycle, including ideation, research and development, prototyping, testing, and launch. It allows organizations to leverage the provider’s expertise, infrastructure, and resources while reducing the time to market and overall costs associated with product development.

Here are some trends for outsourcing product development:

  • IT outsourcing is projected to reach USD 430.5 bn in 2023 and grow at a CAGR of 8.07% to hit the market volume of USD 587.3 bn by 2027.
  • 42% CTOs perceive outsourcing as a key to quickly scaling, and 99% of senior technology and HR leaders recognize the benefits of remote teams.

When to Outsource Product Development?

Market demand often exceeds the capabilities of companies to deliver quality products. Forward-looking businesses utilize software product development outsourcing to accelerate their launch. It’s not always about what is right but when it is suitable for the company to outsource.

  • Lack of Resources and Skills: The in-house team may lack relevant skills in any area of the end-to-end product development cycle. It would provide access to specialized skills and knowledge.
  • Cost Savings: Outsourcing product development to a country with lower labor costs can result in cost savings for the company.
  • Achieve Scalability: Outsourcing can help companies scale their product development efforts up or down as needed without investing in new infrastructure or personnel.
  • Time-to-market: When you need speed-to-market deadlines, you can accelerate the development process by providing the in-house team with the support of remote development teams. They can complete specific sections of the product development project as needed.
  • Access to New Markets: Outsourcing can provide access to new markets, particularly if you want to expand your product offerings globally.
  • Unique Product: Sometimes, you need a fresh perspective to ideate a product different from your usual. Your in-house team develops a pattern and gets comfortable with the process to see things differently. By outsourcing, you can bring new excitement and energy into the product development process.
  • Risk Management: Outsourcing can also help mitigate risks associated with product development, as the outsourcing company assumes responsibility for managing the project and mitigating any potential risks.

What to Outsource in Product Development?

Outsourcing can be an excellent way for companies to access specialized expertise and resources they may not have in-house. Regarding product development, several areas can be outsourced to help streamline the process and bring a product to market faster. There are different types of outsourced product development services. You can select the ones that meet your business objectives.

  • MVP Development: You need an MVP (Minimum Viable Product) to validate customer needs and demands before building a fully featured product. You can commission your product idea to an outsourced product development company that can bring it to life.
  • Strategy Execution & Management: It involves end-to-end development services from product ideation to launch and maintenance. Here, you outsource everything, like managing a team, budget, timelines, quality, etc.
  • Testing and Quality Assurance: You can get your application quality tested by an outsourced team. It helps you get a different perspective than using your in-house IT team, who have probably built the app.
  • Coding: Your product needs clean codes written in programming languages that enhance its functionality. You can outsource coding to experienced professionals to ensure the smooth working of your product.
  • Design: Be it UX (User Experience) or UI (User Interface), design is crucial in how the product meets your business objectives. You can hire experienced designers via the outsourcing route.
  • Engineering: Outsourcing can be a good option if a company needs specialized engineering expertise for a particular aspect of a product. For example, if a product requires expertise in specific software or hardware, outsourcing to a firm with that specialization can help. It would ensure that the product is developed as per the necessary specifications.
  • Modernizing Legacy Applications: You may need to refactor code and maintain its high quality to ensure your IT systems and products meet customer expectations. Outsourcing to specialists can help increase the efficiency of your product.

It’s important to note that while outsourcing can be an excellent option for many companies, choosing a reputable outsourcing partner, like Rishabh Software, and having clear communication and expectations throughout the process is essential.

Confused About Outsourcing Product Development?

We’re at your service. Rishabh’s capable team, with its talent pool, can build the software product of choice without hiccups.

Factors to Consider While Outsourcing Product Development

It is essential to avoid mistakes and know the factors to consider for product development outsourcing to attain maximum benefits. They include:

  • Quality of the Outsourcing Partner: Look for a partner with a track record of delivering high-quality products, preferably with experience in your industry. Check references and case studies to ensure your chosen company has the skills, expertise, and resources to handle your project.
  • Communication: Good communication is critical to the success of any outsourcing project. Ensure the outsourcing partner has a clear communication plan and is responsive to your needs. Clear communication channels will help you ensure the project is on track and quickly resolve any issues. Align your internal development methodology with the outsource team for smooth operations. It could include reporting standards, sprints, record-keeping practices, testing, issue-resolution approaches, etc.
  • Intellectual Property (IP) Protection: Ensure the outsourcing partner understands and is committed to protecting your IP. A non-disclosure agreement (NDA) should be in place before the project begins, and the outsourcing partner should clearly understand your IP rights.
  • Time Zone And Cultural Differences: If you are outsourcing to a different country, be aware of time zone and cultural differences that may impact communication and project timelines. Ensure that the outsourcing partner is mindful of cultural differences and has a plan to mitigate potential issues.
  • Hiring Cost-Effective Resources: Cost reduction is one of the most crucial reasons for outsourcing. Identify where your in-house team lacks the skills or bandwidth to meet deadlines and outsource the same.
  • Risk Management: Assess the potential risks associated with outsourcing and develop a risk management plan. Follow the guidelines and best practices as per the regulatory structure. Identify risks involved in outsourcing software product development, like copyright infringement. Mitigate them by ensuring your outsourcing services provider understands compliance with regulations and conducts operations reasonably to safeguard your security, privacy, and business continuation. This plan should identify potential risks and include strategies for mitigating those risks.

By carefully considering these factors, you can select the right outsourcing partner and ensure the success of your product development project.

Benefits of Outsourcing Product Development

Why Outsource Your Product Development

Companies looking to outsource product development often seek financial benefits, specialized skills and talent access, and fast-tracking deployment. Here are some common advantages that suggest why to outsource product development:

  • Right Skills & Experience: As your products change and upgrade to meet customer demands, the skill sets you need to develop them in-house may also vary. Bringing the right people on board is not always feasible, but you can hire them remotely via outsourcing.
  • Time Savings: By outsourcing, you cut time previously spent on talent acquisition, onboarding, and training. Also, the outsourcing company ensures that you complete the project within the expected timeline.
  • Cost Savings: Outsourcing allows you to hire experienced developers that fit into your budget. Utilizing the right outsourcing company can ensure you get a better-quality product within a lower allocation than in-house development.
  • Reduced Time To Market: Outsourcing product development can help businesses bring products to market faster by leveraging the experience and resources of outsourcing partners. It can help companies to stay competitive in fast-moving markets and capitalize on new opportunities. You can get consulting services concerning your product idea, technology, and plan. Experienced IT professionals can help enhance your monetization strategy and product features while providing valuable market insights.
  • Get More Time To Focus On Your Core Business: As your outsourcing team handles the time-consuming aspects of your product development project, you get extra time to focus on your core business activities like strategic and growth planning.

How to Choose the Right Outsourced Product Development Partner?

The following considerations can help you choose the most suitable partner for outsourcing product development:

  • Determine Your Needs And Expectations: Clearly understand what and how you want it. It would be best if you had a clear understanding of what you need, what your budget is, and what timeline you have in mind. Give specific instructions to the outsourced developers to avoid any room for misinterpretation and misunderstanding.
  • Evaluate The Outsourcing Company’s Portfolio: See if the company has completed projects in your industry and worked on similar products. Identify what they can bring to add value to your proposed software product & have a track record of success, and can provide references and case studies.
  • Check Out Customer Testimonials: No matter how experienced an outsourcing company is, it always helps to check their client’s experiences. It helps gauge the company’s capabilities and dedication toward successful project completion and high-quality delivery.
  • Evaluate Their Expertise: It’s essential to evaluate the expertise of the company you’re considering. Ask about their development process, the technologies they use, and the expertise of their team members. A good, outsourced product development partner will have a team with various skills, including design, development, testing, and project management.
  • Evaluate Their Security Measures: If your product involves sensitive data or intellectual property, it’s essential to evaluate the security measures of the outsourced product development partner. Ask about their security policies, data protection measures, and disaster recovery plans.
  • Check Their Scalability And Flexibility: Finally, choosing a partner who can scale their team as needed and is flexible enough to adapt to your changing needs is essential. Look for a partner who can provide additional resources and has experience working on projects of different sizes and scopes.
  • Interview The Developers: You can check the skills and experience level of the developers on your outsourced team. It ensures you get the right resource that meets your expectations and budget. Interacting with them also helps you understand the communication gap, and you can proactively strategize to bridge it.

Following these steps, you can choose an outsourced product development partner to help you develop a successful product that meets your requirements, budget, and timeline.

How is Rishabh an Ideal Outsourced Product Development Partner?

With a highly skilled and experienced development team, Rishabh Software is well-placed to meet business needs and add value to product development.

With a dedicated development center spanning 100,000 sq feet, you can rest assured of getting the infrastructure required for sensitive software development. We offer the right culture fit and enable you to get the right resources. Our comprehensive software product development services include UI/UX design services, PoC and MVP development, product development, modernization and migration, product testing and QA, and maintenance and support.

Before engaging with us, you can check out our working methodology.

Our development center focuses on the 4 Ps- People, Processes, Products, and Projects.

  • People: We have an experienced and diverse skillset of 700+ professionals comprising business analysts, developers, QA engineers, project managers, UI/UX designers & more.
  • Process: We provide 100% compliance with quality and project management processes. You get optimum knowledge management and retention across the team and customer. Besides, the time zone advantage helps to improve productivity.
  • Product: You get end-to-end product development exposure, from idea brainstorming to Proof of Concept (POC) to development, testing, and implementation. We also offer optimized infrastructure & material costs. Our team ensures faster go-to-market and leverages design thinking-led methodologies.
  • Project: We ensure 100% successful outcomes by improving customer satisfaction, providing flexibility across the board, and improving risk management and continuity plan. We also offer dedicated infrastructure with the hardware and software aligned to your business.

Here are Some Benefits of Engaging With Us

  • Flexibility: We’re flexible and adaptable to the client’s changing needs, allowing us to provide customized solutions that meet specific business needs.
  • Varied Experience: Our skilled developers have expertise in various technologies and programming languages to provide high-quality solutions. We offer a dedicated resource pool with superior IT skill sets for projects.
  • Quality Assurance: We follow a rigorous QA process to ensure that our solutions are of the highest quality and meet the industry standards as per ISO 9001:27001.
  • Timely Delivery: We’re committed to delivering projects on time, allowing our clients to meet their deadlines and achieve their business goals.

Rishabh Software believes in providing value to clients by offering custom engagement models that meet their business goals. For ease of decision-making, we also provide several ready-made engagement models that could meet specific client requirements. These include:

  • Hire and Go
  • Agile Pod
  • Dedicated Workspace
  • Captive Unit Model (B-O-T)

Our Success Stories

Case Study 1:

Client Profile: France-based leader in the global digital-out-of-home (DOOH) marketplace

Engagement Highlights as their Outsourcing Development Partner;

  • 10+-year-old association for multiple global entities of the same client
  • Started with initial testing engagement with >5 and helped develop a team of 150+ qualified resources
  • Offered data engineering, QA, and DevOps services while developing, maintaining & supporting the entire product line

Case Study 2:

Client Profile: US-based hospitality giant

Engagement Highlights as their Outsourcing Development Partner;

  • 5-year-old association with the parent entity and supporting subsidiaries
  • Started with initial testing engagement with >2 and helped develop a team of 50+ qualified resources
  • Offered data engineering & data visualization services across more than five projects

If you wish to learn more about how we enabled the above-listed clients and helped solve potential challenges, feel free to write to us at sales@rishabhsoft.com

Concluding Thoughts

Outsourcing product development can be profitable and convenient if done the right way. Now you know everything about outsourcing, like what it is, what and when to outsource, factors to consider, how to choose an outsourced development company, and more. So you can avoid mistakes and ensure your project’s success.

Want to Build Your Software Product?

As your outsourcing development partner, we can assure you of high-quality end-to-end services from ideation and prototyping to deployment and maintenance.