Why Outsource Software Development: Benefits, Pros and Cons

Software outsourcing is gaining momentum in Europe and North America these days, and it is no wonder why. As more and more industries require digitalization or an update of the existing software solutions – the demand for IT expertise increases exponentially. 

IT development agencies are there to help companies shape their future in the digital realm. They analyze the client’s strengths and weak points and define an effective tech strategy. This, in turn, helps to automate data processing and manual everyday tasks like accounting and logistics, increasing the overall efficiency of the operation as a result.

Most of these goals are achieved through developing new and fine-tuning the existing software. 

At that, not every company can afford to hire and maintain a team of software experts usually required for executing such tasks. Of course, this doesn’t mean businesses should give up on the idea or eliminate their budget altogether. 

This is where outsourcing teams come in handy, providing the opportunity to cover the companies’ digital needs pain-free. 

Outsourcing is one of the fastest-growing trends in the IT world. Its global market size approached a $100BN mark in 2019, according to Statista. But, why is it so attractive to businesses of all shapes and forms? And what are the main benefits of shifting your digital tasks out of the state?

Let’s find out.

Benefits of outsourcing software development

Remote Work Graphic

When it comes to the benefits of IT talent oursourcing, there are 4 key points. 

Those are:

IT talent acquisition

The first and foremost advantage of leveraging developers from outside is the extensive pool of experts that becomes available to your business. 

The software world is vast and complex, so it makes no sense for businesses to try and fill all of their potential tech needs via in-house developers. You’d have to employ an entire state of IT experts to achieve that. Definitely unrealistic.

In such a situation, relying on third-party software production capabilities is a great and effective choice. 

This is why, even established enterprises like Microsoft resort to outsourcing to pump up their workforce, forget about smaller companies. 

Efficient workflow

Here’s another point in favor of delegating some of your coding work to external specialists. Even if you are willing to reserve extra space in your office and budget for a team of devs, the challenge remains to manage all of the working processes and people. 

Do you have the time and knowledge to oversee all of it? 

It’s a good question to ask yourself. 

Very often, it is more efficient for executives to focus on indispensable business activities like marketing and client acquisition – something they are experts in themselves, and leave the technical issues to the others.  

In fact, Harvard Business Review found that a lot of managers admit feeling incapable to understand, let alone – manage – the technical part of the IT development processes. Instead, they choose to maximize flexibility and control by finding a good outsourcer to rely on to solve these issues. 

Lower production costs

If balancing the budget is anywhere on your business’ agenda, then outsourcing is definitely a worthwhile option to consider. 

For a number of reasons, remote software production will usually cost fairly less than the same amount of intellectual work executed in-house. Not only the aforementioned management nuances and greater talent access play a part in this. The economical diversity between places and regions of the world is drastic. So, what costs a dollar in NYC may be sold for less than a fifth of that, just across the Atlantic ocean.  

Difficult to believe? 

Check out these stats from SalaryExpert, but take a comfortable position/seat first: 

This is how much devs earn (and thus – charge) on average in Manhatten: 

Average IT salary in Ukraine

And here’s how much the same type of work costs in Eastern Europe, Ukraine: 

Average IT salary USA

You may do the calculation yourself. 

When this article was written, this equaled $19,345.

Divide the two numbers and you get a stunning 6.58x difference in costs for the same type of service. And we’re not talking about rent prices – a piece of code surely doesn’t change in a fancy location. 

Are you on Upwork already? 

Don’t rush, there is another crucial factor when it comes to our topic… 

High-quality software services

Last but not least on our list of the outsourcing benefits, is consistent product quality provided by dedicated dev teams. 

Naturally, nobody can give a 100% cashback-if-you-don’t-like-it guarantee that the team you choose will satisfy all of your project’s needs exhaustively. Actually, it’s the same with in-house workers. You would have to do research and run through a few options before finding the best solution for your goals and setup.

That said, just like with air travel – the statistic is on your side in this one. Over 78% of business owners are fully satisfied with their outsourcing partner, according to Deloitte

Most of the remote teams out there consist of high-skilled professionals operated by seasoned PM’s. This ensures a smooth development process and above-average quality of the end-product – two of the clients’ most common pain points. 

IT outsourcing challenges

Looking for the drawbacks of hiring remote dev teams, one will have a rather hard time finding one.

Time difference? Perhaps.

Not meeting each other at corporate events? Possibly another benefit.

Most of the time, the working process with outsourced partners is virtually the same as with in-house ones. However, you need to consider the following when outsourcing IT services:

Remote communication

The first seeming issue with outsourcing contracts is communication. Talking to colleagues online is slightly different than in real-life meetings, but not nearly big enough to worry about. A time difference may shift daily/weekly calls slightly, but you can always negotiate a comfortable time.

In fact, we’ve got a short read that’ll help you make the most of online meetings. So go and check if you have any concerns about communication over distance.

Legal regulations

Another obvious issue with ordering products services from abroad is versatile legal regulations and taxes.

The laws are different everywhere, and it may be a lot more or less expensive to outsource depending on your partner’s location.

Moreover, the rules keep changing.

Like that, Britain’s controversial IR35 corporate tax law reforms have complicated a lot of things for businesses not only inside the country but also those working with British companies. Meanwhile over in Ukraine, on the other hand, the taxation scheme has been rather simple and beneficial for international partnerships lately.

So, you have to explore current laws for each particular location individually when looking for outsourced services.

Political situation

One more challenge in international talent sourcing is geopolitics.

Unfortunately, we have seen government tensions around the world harm the informational technology sphere here and there.

One of the biggest IT talent outsource pools, India is breaking records with nearly a hundred cases of nationwide internet outages this year. Another major player in the international outsourcing arena, China is known for radically limiting web access for its citizens, too. Now, the web access pandemic has reached a primary provider of outsourced talent in Eastern Europe – with the recent web access outages in Belarus.

In fact, you may find it interesting to check this up-to-date map of global internet restriction levels – just to have a vague image.

For the local IT businesses under such circumstances, this can mean anything from missed deadlines and postponed work to compromised production and lost contracts. And for their clients, it is clear that outsourcing to a politically unstable country may cost one a business, so they look elsewhere. 

Where to source IT services?

MintyMint’s extensive team of experts is always at your hand when it comes to IT services. Otherwise, it may be helpful to check out this list of the top eastern European software development companies to paint a better picture of what the market has to offer.

We’re on that list, too, in case you wonder.

Final word 

With international enterprises and leaders of software production investing more and more into the remote workforce, it is fair to say that the practice is approved by the giants of the industry. 

IT outsourcing can help to access great talent, improve management, and save the budget. It takes a lot of stress away and allows you to focus on high-impact work. 

You make the bet as what’s best for you and your business. If it’s quality, convenience, and efficiency – our team is here to help

Startup MVP Development: How To Build A Minimum Viable Product

They say that customer is always right. 

Indeed, it doesn’t take Gary Vaynerchuk to see that every business or service revolves around the client. The stumbling stone here is guessing exactly what the customers want, and while market analysis and research can surely contribute to that, nothing paints as accurate a picture as a field study would.

Now, how do you do it without wasting a fortune on running the show? The answer is a Minimum Viable Product, or simply – an MVP.

What is it and how to make a minimum viable product your most valuable player? Read on to find out!

What is an MVP product?

Defined in The Lean Startup by Eric Ries, MVP is a functional version of a product that enables gathering maximum customer feedback with the least effort. It can be a landing page, a promotional video, or even a Kickstarter campaign.

The idea is to produce a practical learning tool that’ll help to craft the best solution for a target audience’s issue. So, instead of assembling a complex business plan and relying on expert estimates, you introduce a ready solution using the least amount of resources possible and observe the actual user behavior. The insights gathered then suggest whether you are moving in the right direction or need to change course.

MVP development process typically consists of the following stages: 

  1. Idea
  2. Research
  3. Conceptualization
  4. Implementation
  5. Feedback

In general, it looks something like this:

Startup MVP development life cycle.
Minimum Viable Product Development Cycle

Before moving on, let’s get clear with the terminology. 

The word viable means capable of working successfully. This is something many entrepreneurs miss, yearning for perfection. A successful MVP resolves a key user issue and is neither fancy nor sophisticated. Moreso, it can be plain out boring (unless you’re making a game, of course), as long as it provides value.

Here’s an example: 

Say, you’re making a dating app. The perfect scenario here would be a responsive multi-platform app with ratings, interest-matching algorithms, and an in-built messenger. However, the minimum value of a dating app is for a user to find a date.

In this case, a possible MVP looks like a serverless web service with profiles that include a picture, location, and an email (or a public messenger link).

MVP vs final product

A minimum viable product is very different from the final product, mainly in its goals. It’s not there to sell, but rather to test the market. 

Here’s a real-life case in point everyone is familiar with:

McDonald’s founders jump-started the now-global chain of restaurants by combining two of their customers’ main values – top-demand food and low lead time. They reduced the menu to just 3 food positions (with a few choices of drinks) and managed to cut the order time down to under a minute.

Like that, their clients’ favorite meals were ready for takeaway in a blink of an eye. No friction, and ultimate efficiency. 

Years later, McDonald’s menu grew back to include dozens of positions and is available in every corner of the world. But they had to strike that MVP offer first, in order to take off.   

Startup MVP development vs complete product or service
McDonald’s Original Menu vs Today’s Offer

MVP benefits

Creating an MVP can help you to: 

  • Cut costs.
  • Save the production time and resources.
  • Build up an initial client base.
  • Get feedback from the market.
  • Collect insights on focus features. 
  • Attract early investments.

Doesn’t all that sound great?

Naturally, there is rarely a one-fits-all solution in the IT industry, even more so for startup MVP development. Different approaches to building a minimum viable product will fit better or worse depending on your main goals and project stage.

For that matter, MVPs are divided into low-fidelity and high-fidelity ones. 

The first approach is good when you need to:

  • Get to know your target audience and their issues.
  • See if your product satisfies the customers.
  • Evaluate the overall market demand for your offer (smoke testing).
  • Find the best solution to the clients’ need. 

Whereas high-fidelity MVPs are helpful to: 

  • Assess the optimum price for your offer.
  • Get early adopters that’ll recommend your product.
  • Optimize your promotional strategy.
  • Spot further business growth opportunities.

Before you start building a minimum viable product, consider your main goals and risks, the potential time to market, and your budget and/or funding sources. These questions will help you to paint a clear roadmap of the MVP development process, hopefully, the one to success. 

Types and examples of an MVP

Now that we’ve covered the definition and the main benefits of our subject today, let’s look into the common MVP types along with some notable examples from history to back up the point.

Landing page MVP

Unsurprisingly, a landing page MVP implies creating a simple landing page to present your product or service. The goal is to provide potential clients with a general image of what you offer along with a call to action, whether it’s to sign up or make a pre-order.

In this case, you don’t even need to have the business going on. The idea is to smoke test your offer. Once people discover your “website” and begin interacting, you can evaluate the numbers to learn whether the target audience likes the solution at all.

Like that, your spendings are down to the cost of a landing page plus your ad campaign budget. It is the strategy Joel Gascoigne applied when launching his two-page LP (description & pricing) for Buffer, with no actual functionality behind it.  

Buffer's startup MVP development example - landing page MVP.
Buffer’s landing page MVP

Video MVP

Another option of a minimum viable product comes down to recording a promo clip or an explanatory video, putting it up on YouTube, and watching if it gets the views and feedback. The good news is that engaging videos often get viral, automatically launching a word of a mouth promo campaign. The bad news is that few videos hit that mark, and it’s impossible to predict which one will. 

You have to climb a tree in order to get the fruit. After all, producing a video clip is not nearly as cumbersome as developing a complete product. It worked for DropBox, so why wouldn’t it do the same for you? 

Btw, here’s the award-winning video: 

DrpoBox’s premier video MVP

Crowdfunding MVP

Another great way to get your project up and running without eliminating the family budget is to launch a crowdfunding campaign.

In this case, what you do is prepare a concise presentation of your idea, a prototype, or a visual design. Then, share it at either of the popular crowdfunding services like Kickstarter, SeedInvest Technology, or the one developed by our team – 4Friends.

A crowdfunding MVP is really a win-win option. If your idea gets the attention, you receive the funding to invest in something already favored by the market. If it doesn’t – you lose nothing. The only drawback here is that your idea can potentially be stolen and compromised. But hey, you don’t have to give away all the key ingredients. And plus, if the idea is that good – you’ll get the funding before the plagiarists jump out of bed. 

One of the most impressive crowdfunding MVP success stories is that of Pebble. Back in 2012, Eric Migicovsky decided to try his luck on Kickstarter after running out of the initial funding for his revolutionary smartwatch. Guess what followed? A $10M investment and almost half a million watches sold in two years.

Impressive, huh?

Actually, the brand repeated its success a couple of years later, scoring another eight-figure. 

Pebble's startup MVP development example - crowdfunding MVP.
Pebble Watch Kickstarter campaign MVP

And yes, it didn’t quite survive the competition as time passed, but that is the topic of a whole another discussion…

A Piecemeal MVP

A piecemeal MVP simply means using a free digital platform to provide your service. 

You can throw a promo campaign on social media, launch a special offer email campaign for existing contacts, or explore new audiences via mass-mailing. The key thing is to use a free platform to reach your customers. 

Uber is a great example of applying such a strategy, famously requiring the initial customers to email or SMS one of the founders in order to access the service.

As they say, all is fair in love and war… and business, of course. 

Uber's startup MVP development example - email & sms MVP.
UberCab email and SMS MVP

Similarly, you can leverage the power of social media platforms in the same way as Uber did with emails. With billions of users spending half of their free time on social media every day, who said a thoroughly worked out Instagram page can’t be your minimum viable product at the first stages?

Concierge & Wizard of Oz MVPs 

These two minimum viable product types imply using human resources to manage what should potentially be automated. 

With the concierge method, you act like a concierge – greeting guests in person and opening the doors on their way to the value provided. Meanwhile, you are able to collect direct feedback from working closely with the clients.

The Wizard of Oz scheme applies a similar approach. The main difference is that while using manual work to execute the task, it is visually indistinguishable from a complete, finished project. Therefore, users see it as an end product while it’s actually not so – behind the curtains. 

For example, you make a website with a catalog of products, without stocking it. Once an order comes in you get that item from the original supplier and ship it to your client. Believe it or not, this is how Jeff Bezos initiated Amazon back in the day. 

Amazon's startup MVP development example - wizard of OZ MVP.
Jeff Bezos’ Amazon back in 1995

Single-Feature MVP

Last but not least, a single feature product can be your best bet type of MVP. The idea here is to offer a service with nothing but one key feature.

Say, you want to make an online photo editing tool with lots of cool filters, albums, crop tools, etc. Just to kick things off and prove there is potential, you choose one supreme filter and develop an app where users can process and share one pic at a time. 

This will require minimum investments, low server capacity, and overall production simplicity. If people love it, you can always scale up. 

A good example of a successful single-feature MVP is the way Richard Branson’s Virgin Airlines took off by flying just one plane en one route between two major airports in London and Newark, New Jersey. You know where it’s taken sir Branson since.

Virgian Airlines' startup MVP development example - single-feature MVP.
Virgin Airlines’ original route map

How to build a minimum viable product for my business?

Now that you know everything about the concept and types of minimum viable products, it’s time to dive into the process of startup MVP development for your own business.

On this path, there are 5 main steps:

1. Allocate the budget

Before launching any product development process, it is crucial to assess how much exactly you will need (1) and are willing (2) to spend on it.

Speaking of MVP, we naturally imply a constrained budget. That said, everyone has their own limitations, and what may be just enough for a mobile application or a web service is probably way above the line for a simple landing page or online business card.

Therefore, evaluate your possibilities and set out a realistic budget for the project first!

2. Determine the type of MVP that suits your purposes the best

As mentioned above, different projects require a different type of MVP to kick-start, no pun intended. Which one suits your purposes is, of course, for you to determine, but here are some general guidelines:

If you promote a product or service and just need to reach your customers and provide them with web space to explore your offering – then a landing page MVP is really all you need.

Looking to mass-produce a product you already have or can make a prototype within your budget to present to potential investors? Then a crowdfunding MVP is the perfect choice for you to amass the funds needed to scale up.

Have a great idea and want to see whether it’ll rock the market? Consider a video MVP where you present the concept in plain words or with minor graphic design to let the world know about your idea and evaluate whether it has the potential to blast.

Should you have the initial budget to invest in a simple mobile or web app to present your business and are willing to take care of the back office work manually – then a concierge or wizard of OZ MVP is your best bet.

Finally, if you’re just starting out a side-hustle like a small retail shop or some sort of beauty nail studio from home, and especially if you target youth and young adults for the most part, then a Social Media MVP is a great point to start from in order to present your service and try to gain the initial client base, without eliminating your budget.

3. Define your target audience

Once you get clear with the budget and the best MVP type to fit your needs, proceed to paint a vivid picture of your target audience. What is your typical customer like, what are his needs and desires, and most importantly – how can your product or service help him achieve it? What features would appeal to your clients the most?

Think about the key benefits you can hook your potential clients with and focus on delivering those. The rule of thumb here is that of space travel voyages – only take the very essential on board.

4. Hire a qualified team

Now that you know exactly what kind of product you need and what does the target audience looks for in it, it’s time to bring it about.

At this stage, it is extremely important to have a qualified team or seasoned individual experts in the field of your project backing you up on the technological (and creative) frontier. Whether it’s a graphic designer, a video editor, a voice-over narrator, or a professional software development team – you’re going to need that expertise to make your MVP stand out and win the hearts of the crowd.

5. Invest in marketing

Last but not least – marketing. They say that a good product will sell itself, which is entirely true. Just think about Apple, for example.

That said, unless you’re making a world-leading digital gadget in bulk or anything of that grade, your product or service will definitely need at least the initial push before the word of mouth picks it up and carries your name around the world.

So, PPC, SEO, SMM campaigns, or influencer marketing – any advertising tool valid in 2021 is at your service, once again, highly dependent on your budget and targeting audience.

Your Minimum Viable Journey

All in all, creating an MVP allows you to save time, cut spendings, understand potential customers, and build up the initial client base. This is an efficient marketing tool not only for startups but for existing companies introducing new services just as well. 

A common mistake to avoid here is confusing the idea with a minimum value solution, which is a totally different thing. By implying a minimum product, an MVP actually offers ultimate value.    

Contact our team if you need help with minimum viable product development!

Recent from #Business

Top 3 Integrations for Enterprise-Grade E-Commerce Platforms

E-commerce is purchasing and selling goods and services via the Internet. In March 2021, e-commerce sales grew across most retail

React Native vs Swift: What is the Best iOS App Platform in 2022?

Is it likely to make iOS native apps employing React Native and Swift? Or is it better to use only

How To Develop A Product Strategy For A Startup: The Ultimate Guide

Product strategy is essential to launch a successful startup. Learn all the tips, tricks, pitfalls to develop a winning game

Digital Transformation in Private Equity and Venture Capital

Digital transformation in venture capital and private equity companies is different from that across the fintech industry. Jump in to

Digital Transformation in Fundraising: Trends, Issues, and Solutions

Digital transformation is the key to sustainable fundraising in 2021. When to do it and how we can help? Learn

Digital Transformation In Investment Banking: Trends and Opportunities

Digital transformation in investment banking - why do it, what can help to achive, and how to get started? Find

Digital Transformation in The Banking Industry

Digital transformation in the banking industry. Why it's important, how to do it, and what does the future hold for

Digital Transformation in the Healthcare Industry

Business process automation is a hot topic in healthcare. Learn everything about the key automation trends in the industry right

Shopify As A Marketplace – Explained

Shopify is a leading eCommerce tool today. Learn everything about its benefits and drawbacks, as well as available alternatives -

How To Make Remote Work Successful: Best Productivity Tips

How to make remote work effective during the pandemic: proven guidelines on effective management of remote processes and operations.

Pick a comfortable time for call or fill out the form

[contact-form-7 id="1896" title="feedback"]