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Is Offshoring SAAS Development a Good Idea?

why offshoring SAAS development is a good idea?

What is SAAS?

Wikipedia says, SAAS also known as software as a service is a software licensing and delivery model which runs on a subscription model. It is also called “on-demand software”. Efficiency and low cost are the two main reasons why cloud-based SAAS is used by many businesses around the globe. There are other advantages of using SAAS as well. Low setup and infrastructure costs, scalability, automatic updates, and high security are some of the other reasons SAAS is used.

In simple words, it is basically hiring software developers outside a country’s border for cheap and expert labor availabilities. Generally, offshore hiring works well for short-term projects like developing an online web-based mobile application.

Due to the worldwide COVID-19 pandemic, companies are spending more and more time finding a way to reduce operational costs. In fact, it is one of the main challenges CTOs and CIOs are facing now a day. As a cost-cutting tool, SAAS is a great way to minimize companies’ expenditure. The practice has spread to any IT development project that will require more staff resources than a company has on staff under its own roof. Thus, more and more CIOs have been realizing the benefits of offshore SAAS development.

According to reasearchandmarkets.com, in 2020, the global market value for IT based offshore industry is estimated at around 333.7 billion USD. Not only this, the amount is expected to grow by 397.5 billion by 2025. The research reports a continuous yearly growth of 4.5%. Such trend is a clear indication that the Outsourcing industry is not slowing down any soon.

Groove, an online customer care network, is among the best instances of SAAS outsourcing. Like many businesses, Groove’s CEO and creator, Alex Turnbull, needed technological expertise, funding, and personnel. He chose to completely outsource the building of SAAS. As a result, he avoided spending money on employee salaries. Now, Groove brings in more than $5 million annually.

Bangladesh is a great source for the offshore development team. A large number of dedicated, skilled software developers are there. The labor cost is comparatively inexpensive with a non-negotiation of quality.

How does it work?

A shortage of skilled and experienced software developers still exists in almost every country. Hiring some in-house software developers and building a dedicated team is a tedious and expensive process. Rather outsourcing a project and hiring a team of dedicated members meeting the exact skills that the project demands is way easier and cost-friendly. With the tremendous development of information and communication technology, geological borders between countries is not a barrier today. As part of the global village, today, it is possible to cater to international clients with minimum supervision.

Here’s how offshore SAAS development works –

The offshore company will provide software developers with the exact skillset match according to the project demand. From the pool of experienced and talented developers, a team will be built and will work solely for the project.
Payment will be prepared based on the monthly hour of service provided. This is one of the best advantages of offshore SAAS development that a company doesn’t need to hold onto employees and keep paying them.
The company hiring the team normally treats the developer as the members of their own company. They also handle their human resources issues and provide administering benefits.

Let’s have a look at the benefits of offshoring SAAS development –

 Hassle-free administration:

The paperwork for internal hires is extensive. performance evaluations, HR practices. Frequently, parental leaves and healthcare benefits. long-term employees need to know all of these things. Offshoring, however, completely outweighs all of that administrative work and expense. Simply choose what is needed, include them in the workflow, and pay a one-monthly charge. There is no easier way.

Facile recruitment:

Hiring an in-house developer team can slow down the overall workflow by four to six months. From the job advertisement to obtaining hiring budget permission, publishing the position for the designated period, sifting through candidates, conducting interviews, getting a team onboard, training them, and finally starting the project, the process is dull and time-consuming.
Working with an offshore firm eliminates all of these processes and gets a team assembled in just days.

Flexible accessibility:

In software as a service cloud computing system, applications can be used across multiple devices with a single login with a user ID and password. It doesn’t require an individual license for a single device. Unlike traditional software, SAAS doesn’t need to be downloaded to be upgraded when available.

Breaking the geological boundaries and accessing the world talent pool:

It is not always possible to find the best-suited developers with the exact skillset and mindset needed for a specific project. Limiting oneself within the geological boundary is so backdated nowadays. We, as a member of the global village, now, have the opportunity to connect with the best-talented people specializing in a specific sector. Therefore, it is now possible to find international talent and thus meet the quality of the work. It is easier to put the trust in them as they are already examined, checked, and are the best of the candidates.
Apart from all the benefits, there are some downsides also.

The drawbacks are –

Attachment:

In the case of in-house employees, they have the opportunity to connect to the products and customers. It is easy for them to be inspired by the company’s ideas. On the other hand, offshore employees are not very well aware of customer feedback, revenue growth, future plan, etc. So the risk of poor performance due to the lack of proper motivation is ample in such cases. But this situation can be avoided by organizing meetings from time to time. Visiting the team personally and having a physical meet-up can be very effective.

Possibility of low quality of work:

Hiring anyone is always risky. When it comes to hiring someone offshore, the risk increases higher. Thus, the chance of getting conned is pretty high. To avoid such a scenario, it is required to put trust in reviews, portfolios, and virtual meet-ups via video conference. Hiring a team from offshore is always a tricky business. You can read how to hire the best offshore development team for your company.

There are other pros and cons of hiring an offshore software development team. You can visit the advantages and disadvantages of remote development team.

Final thoughts

SAAS and cloud computing has advanced significantly in recent years. SAAS Integration Platforms (SIPs) like Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) have emerged as a result of increased awareness and adoption of SAAS products. Companies will continue to hire specialized service providers who can do non-core IT tasks better to handle for them. The cloud strategy can assist businesses in creating comprehensive, integrated solutions and free them up to focus on their core competencies while leaving a variety of hardware and software IT challenges to service providers.

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