#development, #outsourcing, #product
4 September 2021
Julianna Sykutera

When Should You Outsource Product Development?

Product development can be hard. It requires time, effort, teamwork, careful planning, meticulous execution, viability analysis, security checks, market analysis, etc. Once you are done with the first version of it all, you need to start once again, based on the feedback from your users and threats from new avenues. It’s an exhaustive iterative process that requires constant work and dedication to details, and to top it all, there’s always a dearth of available talent and time. To put it in the simplest terms, product development requires knowledge and experience, and efficient product development even more so. 

Whether a lone founder, small startup, or big multibillion-dollar company, the question is: when should you outsource product development? If you don’t know how to decide – you’ve come to the right place! In this article, we will look at different scenarios where outsourcing new product development makes sense, as well as what to consider when outsourcing.

Product design and development outsourcing

Outsourced product development means hiring a third-party contractor for the complete or partial development of a product or service. For IT projects, this means that external individuals or companies can be involved in all or some of the development stages: from idea generation and prototyping, through development and testing, and finally commercialization and business analytics. The external partner can be a large IT corporation, a smaller software house, or even individual developers – each approach has its own advantages and disadvantages (read more in our article on the topic). Some of the benefits of outsourcing include:

  • Access to a global talent pool
  • Cost and time efficiency
  • Faster to market
  • Flexibility
  • Tech experience

But how do you know if outsourcing is the best path for you and your company? Let’s take a look at what conditions can call for hiring an outside team to outsource product development!

When to outsource product development?

There are situations when choosing to outsource product development is your best direction.

Lack of expertise

Perhaps you are the sole founder or part of a small startup with an app idea but no technical experience. IT outsourcing for startups is a great way to get access to a development team which: works well as a unit, has experience developing similar products for other companies, and has the technical knowledge required for the specific project. This is also true for large companies, which might have their own in-house development teams, but which do not have the necessary skills or facilities for a particular undertaking. 

The most important thing to note here is that remote teams do not only help you with the development! Rather, they can also assist you in defining the project scope, completing and analyzing the market research, devising a marketing strategy, as well as feedback analysis – all vital steps to creating a successful product!

Budgetary constraints

Hiring and training an in-house developer or team of developers is an expensive matter. Furthermore, you need to think about the cost of obtaining and maintaining technical equipment as well as the human labor costs. Such large expenditures at the very start of a business can easily spell doom if the project does not go exactly on track. Comparatively, outsourcing product development is not only cheaper – but you also don’t have to worry about any of the overhead costs like software licenses, updates, equipment upkeep, employee benefits, etc. Therefore, if you have established a fixed budget, the best course of action is to search for a dedicated software company which can deliver the project within the set limits.

Time limitations

If you are time-restricted and don’t already have an internal development team, you definitely don’t have the time to start that whole process! Additionally, precious time can be highly wasted if the development team lacks the experience – even if the expertise is there! For example, developing an app for the first time, even for coders, will surely have a larger learning curve. Mistakes will be made, ideas will be modified – leading to longer development periods. Other interruptions or downtime are things which can easily happen in any company – and all further slow down the process. If you are under strict deadlines to get the product to market to a certain date, it’s worth considering outsourcing new product development. 

Flexibility

Product development is messy; sometimes the market demands a subtle but important change in the product, sometimes new information comes to light that requires a redo of a major portion of the work, and sometimes someone simply has a new – much better – idea that essentially needs the creation of a new product! Technologies might become obsolete, new and better solutions might become available during the creation of the product, or a competitor might have launched a similar solution before you. This constantly-changing environment requires a high level of flexibility that the developers must incorporate in their daily work, and that might be missing from your own team. 

Remote development teams are easily adaptive to clients’ changing requirements, and can readily scale the operation up or down. This outsourcing also allows the client flexibility to focus on other topics surrounding the product development and launch – such as investor chasing, marketing channels, customer service, etc. 

Final words

Now that you know what all circumstances might demand an external partner, you need to reflect on your own current position – are you at a stage where you need help to start, maintain, or scale a product? Do you recognize your own situation in the ones detailed in this article? If the answer is yes, then it’s time to seriously consider the option to outsource product development. If you are looking for an experienced software development company, contact us here at Redvike! We can assist you in any stage of the product design and development, so you can have the best possible experience and be confident of successful cooperation!

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