Why should you outsource app development?

IT strategy

India is becoming an increasingly important factor in the IT sector. For many companies, having their own development team on the subcontinent is increasingly an option. This article describes which software services are suitable for outsourcing and which are unsuitable.

Better develop start-up projects locally

Many founders try to have their software developed inexpensively in India. In most cases this leads to losses as these startups have little experience with the subcontinent and its business practices.

There are various alternatives for founders to develop inexpensively:

  • Allow developers to participate in the company's success: Many successful startups have offered their programmers and employees a profit sharing scheme in order to reduce the cost of salaries.

  • Developer as co-founder: Every company needs a Chief Technology Officer. The developer who builds the first version can also be brought on board as a co-founder. Here, too, a possibly high salary does not apply and in return the developer can participate in the company's success above average.

  • students: At the universities you can find enthusiastic computer science students who, out of enthusiasm for the project, implement the project for a lower salary.

Should a startup nevertheless consider having programming in India, then the order should not go beyond a prototype. With this prototype, the company can then approach local investors and negotiate further funding. This money can then be used to hire full-time developers on site.

Do not sell embedded systems abroad

Systems that are very close to hardware should not be outsourced by companies abroad. An automobile manufacturer, for example, is well advised to develop the software directly on site, where the production and inspection of the finished vehicles also takes place.

These software systems are too critical to try to achieve cost savings here. A recall campaign can cause millions of euros in damage. On-site experts can thoroughly test the software and discuss it in meetings in which all team members are in the same room.

Implementing ERP systems is too dangerous

In most cases, ERP systems are also too critical to consider outsourcing.
In addition, the aspect of data security also comes into play here. In most cases it is not worth handing over company data abroad. A higher level of legal security results from working with an implementation provider based in Germany.

Desktop applications prefer to be on site

Desktop applications are difficult to create in geographically dispersed teams. The need for coordination is usually very high. At the same time, testing will be easier when everyone is in the same place.

  1. Sourcing Day 2016
    Sourcing Day 2016 is already the fourth edition of the successful event format. On June 1, 2016, almost 130 CIOs, buyers and sourcing experts met again in Cologne.
  2. Sourcing Day 2016
    Michael Beilfuß (IDG), Ulrich Bäumer (Osborne Clarke) and Klaus Holzhauser (PAC) welcomed the participants as hosts (from left to right).
  3. Sourcing Day 2016
    Even before her opening speech, she was in a good mood: Henriette Reker, Lord Mayor of Cologne. Mrs. Reker is framed by Dr. Peter Kreutter (WHU, left) and moderator Horst Ellermann (IDG, right).
  4. Sourcing Day 2016
    Born in Cologne, Reker led her election campaign from a coworking space and attaches great importance to learning from “the young”.
  5. Sourcing Day 2016
    Jens Siebenhaar, managing director of the Rewe IT subsidiary Rewe Systems GmbH, will contribute the content of the Sourcing Day 2016. His message: External employees are ultimately more expensive than permanent employees because of the complex induction.
  6. Sourcing Day 2016
    Questions, objections and good starting points for discussion also came from the plenary.
  7. Sourcing Day 2016
    Christoph Bäumer, CIO of Deutsche Post / DHL and topic sponsor of the workshop on business process outsourcing, in conversation with a participant.
  8. Sourcing Day 2016
    Moderator Horst Ellermann (IDG) in conversation with Ansgar Kirchner (Airbus) and Harald Wolf (ISG).
  9. Sourcing Day 2016
    Ulrich Bäumer (Osborne Clarke, right) and Kewin Stöckigt (Lidl, left) moderate their joint workshop.
  10. Sourcing Day 2016
    Ansgar Kirchner from Airbus speaks as a topic sponsor in his workshop on digitization in the sourcing and service lifecycle.
  11. Sourcing Day 2016
    During the breaks there was ample opportunity for the participants to exchange ideas.
  12. Sourcing Day 2016
    The parallel workshop tracks were also well attended.
  13. Sourcing Day 2016
    COMPUTERWOCHE editor Hans Königes presents the key findings of the IDG study “Sourcing 2016” to the participants.
  14. Sourcing Day 2016
    The English-language workshop on Business Process Outsourcing was held by Katharina Grimme (PAC, right), Christoph Bäumer (Deutsche Post / DHL, left) and Ramesh Ramani (Cognizant).
  15. Sourcing Day 2016
    Andreas Beeres, CIO of Schott, advised CIOs interested in outsourcing to first set up their internal organization so that they can outsource before the first tasks are outsourced.
  16. Sourcing Day 2016
    Peter Meyerhans from Drees und Sommer contributed the user perspective as a topic sponsor for the workshop on the topic of "Holistic Personnel Management".
  17. Sourcing Day 2016
    "From someone who outsourced and learned to fear": With this promising lecture title, Almirall-CIO Matthias Moritz encouraged the participants to stay until the end.
  18. Sourcing Day 2016
    Satisfied participants look forward to a long but successful day at the conference.
  19. Sourcing Day 2016
    The crowning glory of Sourcing Day: a short city tour through Cologne with the destination Cölner Hofbräu P. Josef Früh.

Web-based and cloud-based projects are great

Web applications and cloud-based IT systems can be developed excellently in India. India is very well connected to the internet these days and developers working from there can easily access development environments and team collaboration tools.

At the same time, new updates can be introduced relatively quickly, which can also be carried out remotely. In contrast to embedded systems, a first web version can have one or two errors. These can then be resolved over time and through user feedback.

Mobile app development can come out

Mobile applications can also be easily created abroad.
In most cases, no developers in the areas of iOS, Android or hybrid app programming can be found on site. This is also due to the fact that the demand for mobile apps is very high. Almost every company would like to have such an application developed. On the other hand, the technologies in this area are still very young and few programmers have adopted them.

However, a distinction must also be made here how critical the application is for the company. In most cases, however, such applications can be developed in India or abroad.

Software testing is well suited

In most cases, software testing is a monotonous task that most developers, no matter where in the world, are reluctant to carry out. Many young university graduates can be found in India who pursue this task with great interest.

Here too: Web-based solutions can be easily checked by Indian testers. Embedded systems and hardware-related programs are preferably tested on site.

IT system houses and software companies

Basically, a distinction should be made between IT service providers and companies that mainly do not provide IT services for their customers.

An IT system house or a software company can rely on a partial outsourcing of programming work abroad. In most cases, there is the technical know-how and the knowledge for successful distributed work.

Manufacturing companies and IT departments of medium-sized and large companies should be more careful with outsourcing projects. The protection of company data in their IT systems and the expert knowledge of global teams is not given in most cases.

Conclusion

Outsourcing to India is an alternative that more and more companies in Germany are thinking about. Also because their competitors in the USA are already making massive use of this option and are thus securing a competitive advantage for themselves.

The points mentioned in this article are intended to help you make a decision as to the areas in which outsourcing to the subcontinent can be useful.