How to Innovate During an Economic Downturn Using Outsourced Software Development
Gigster
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April 27, 2023
The looming recession is a growing concern for every business, and the signs of an economic downturn are already showing. Even large corporations are being forced to lay off massive amounts of tech workers as spending is cut. According to Crunchbase, 130,000 U.S.-based tech workers have been laid off in just the first quarter of 2023.
Research shows that companies that invested in innovation during economic downturns improved their position relative to their competitors during the recovery period. Unfortunately, the recent tech layoffs show that many companies don’t have the resources to innovate during hard times.
Recessions place enormous strain on businesses, forcing most of them to make tough decisions like trimming budgets and prioritizing projects to survive. During economic downturns, it’s easy for software development to become a casualty in cost-cutting measures. Nonetheless, as companies continue digitizing most aspects of their operations, they’re forced to seek better solutions to help them keep up the pace of software development within the existing budgetary constraints.
A Goldman Sachs survey showing that up to 93% of U.S-based small firms are apprehensive and that at least 38% are already experiencing a customer decline is the most unambiguous indication that companies are already dealing with recession fears. Companies are forced to choose between reducing the quality, size, or benefits of products or services, cutting funding for new projects, or delaying investments to cut costs. For businesses, this means integrating a tried-and-true formula for operating in a world where inflation forces companies to experience slow growth. For software developers, Peter Drucker’s words, “Do what you do best and outsource the rest,” become especially relevant.
If your company has a software development project and you’re considering reducing your workforce to bridge the recession gap caused by the economic downturn, outsourcing to a professional software development platform is the best way to save on operational costs.
According to Statista, software development outsourcing is in high demand, reaching $66 billion globally, and is expected to exceed $99 billion in 2024. That’s all because development platforms like Gigster have teams of experts that ensure you can still prosper with reduced staff and labor costs despite recessions or any other form of economic instability. Using this single strategy will help your business save money and allow you to weather the storm.
It’s an open secret that large software development projects can be complicated and costly, especially when in-house teams are thin and their day jobs include being distracted by other priorities. According to a McKinsey report, the costs and schedule can quickly overrun, causing them to cost twice as much as was budgeted. The best resolution to this common challenge is seeking outside support through outsourcing.
As outsourcing continues to revolutionize the global market, companies embracing it have a competitive edge due to their speed-up-time, enhanced product quality, and reduced costs. Outsourcing software development in any economy is a financially prudent choice as it enables companies better weather the ebbs and flows of business and maintains visibility and continuity in project workflows. There are numerous ways outsourcing makes a difference, including the following:
According to a CIO Magazine Report on the top 10 most in-demand jobs, 86% of tech managers opined that assembling a skilled and talented software engineering team is one of their most demanding tasks. If that’s the boat that your current team is sailing in and you need skills to perform a required project, an outsourced partner could be your solution.
Engaging a partner like Gigster brings on board a team of specialty engineers in a few days to ensure you accelerate your development and deliver your special projects within the desired timelines. Most outsourced providers have groups of tried-and-tested professionals with deep knowledge of different tech stacks, and critical talent is added or removed as and when needed.
Time-to-market is significant as far as the success of software projects is concerned, significantly when it impacts revenue. All such projects must be scoped, ramped, and implemented expeditiously so they can take advantage of market dynamics. Hiring a dependable software outsourcing company ensures you have expert programmers executing your project 24/7, especially if software development is their core competency.
A recent McKinsey study involving over 440 large enterprises identified culture, tools, talent management, and product management as the key factors that enabled enterprises to achieve faster time-to-market. Per the study, faster time-to-market outperforms competitors by up to five times, meaning your business will have a competitive advantage besides improved customer satisfaction.
When a software development company has to continue working, but circumstances such as the economic downturn force measures like cost-cutting to be implemented, it’s easy to settle for any available talent. Outcomes such as reduced salaries will mainly attract workers with less experience, potentially leading to costly mistakes associated with lower-quality work.
The better option is to partner with an outsourcing company whose teams of professionals have accumulated best practices over time and developed skill sets that will bring a meaningful contribution to your business. With research showing that up to 91% of employees report being unsatisfied with existing in-house technology and over 71% consider greener pastures, the importance of outsourcing major software projects must be emphasized. Outsourcing to expert teams integrates a depth of the latest knowledge and a breadth of tools to create efficient automated workflows.
Outsourcing software development means achieving beyond your peak demands without long-term demands or commitments, balancing your workloads, and improving operational efficiency while saving time and money. As technology continues to evolve and businesses struggle to keep pace with the latest advancements and trends, software developers have the higher duty of meeting peak demands. At a period when hiring specialized workers or allocating more in-house resources to facilitate faster processes and operations isn’t an option, outsourcing becomes the better alternative.
Research shows that companies integrating software development with IT experience better productivity and 83% faster releases. Outsourcing software development to leverage outside expertise means innovating more and waiting for less for code since the expert teams can enhance growth, testing, and deployment to bring your product releases faster to the market.
With many clearly outlined benefits, outsourcing software development is undoubtedly a game-changer, especially if you choose the right outsourcing partner. Choose an accomplished and experienced outsourcing company such as Gigster to help your company see higher operational efficiency, improved customer experience, mitigate risks, and reduced operating costs as you continue developing custom software. Moreover, an excellent partner will offer support through every stage of the software development cycle, from conceptualization to deployment.