The SaaS market is worth billions of dollars and believe it or not, we all use SaaS applications on the internet daily. These applications follow a subscription-based model and rely on cloud servers for efficient operations.
As to why more and more businesses are choosing to outsource SaaS development, is a question that many are asking, and the answer is simple: the outsourcing model entails immense benefits, and businesses are bent on leveraging all of them. To gain a thorough understanding of SaaS outsourcing, make sure to read till the end!
What is SaaS outsourcing, and why is it becoming so popular?
Following the significant transition to this business model, SaaS outsourcing has grown to be a highly sought-after service for both new and established companies. The reasons for its increasing popularity are many, but before we get into the details, we first need to understand what is meant by software as a service.
What is SaaS (Software as a Service)?
Software as a Service (SaaS) allows users to access and use cloud-based applications distributed over the internet. These are generally web-based applications that can be accessed through a browser or an app, and users are not required to download the application.
Examples of SaaS applications include Gmail, Office 365, Trello, Slack, etc. The application is not sold to the consumer; instead, SaaS providers actively provide and maintain the software for their users via the cloud. SaaS is currently the most widely used software delivery model and the most popular public cloud computing service.
Why is outsourcing SaaS development gaining speed in the industry?
Outsourcing is on the rise as more and more businesses are now opting to outsource their work to achieve promising results. SaaS development is no stranger to outsourcing now as companies are starting to realize the benefits associated with outsourcing SaaS development.
The practice is essentially on the rise due to its cost-effectiveness, access to specialized skills, and the agility it offers in accelerating time-to-market. In addition, the SaaS market is among the IT industry’s fastest-growing niches, and this growth requires more resources, which are easily obtained through outsourcing.
What are the different types of SaaS outsourcing models?
SaaS development outsourcing can be categorized into a few models, each of which can be selected based on the specific business requirements. Before deciding to follow a model, you must carefully consider the advantages and disadvantages of each model.
Three of the SaaS outsourcing models are mentioned below:
Dedicated team outsourcing
Businesses, especially startups that lack the time and resources to invest in recruiting a skilled in-house development team follow this strategy of outsourcing their work to a dedicated team. The model ensures full commitment from a team of experts solely dedicated to the project’s success, enabling startups to focus on core business aspects while leveraging external proficiency.
While the model does provide benefits such as faster project delivery and higher quality output, it also has a few limitations. The model is not helpful for short-term projects and works better for longer-term projects where consistent collaboration and thorough integration are critical. Additionally, time zone differences between the company’s location and the outsourcing team make it difficult to collaborate and communicate in real time.
The fixed-cost outsourcing model is used for SaaS projects that don’t require scalability or any significant adjustments. These projects are clearly planned out with requirements, complexity, time, and deadlines already configured, based on which a price is negotiated between the client company and the service provider.
Setting a fixed price from the beginning allows client companies to predict the budget in advance, which is critical for new startups that lack financial flexibility. However, this model also has its limitations as it decreases workflow flexibility. Decisions made at the outset should not be altered because doing so could result in updating the fixed cost.
Sometimes, businesses require extra hands on their project to finish the task on time or need to access skills that are not available in the in-house teams. They can utilize part-time outsourcing, which allows them to hire skilled individuals for a short term or until their requirements are met.
It involves outsourcing only select portions of the project to address particular challenges in the development process. It effectively minimizes the effort required to expand the in-house team with specialized skills. But, it also poses some challenges, such as a need for better communication as multiple teams, in-house and external, working on one project might develop inconsistencies.
What are the benefits of SaaS outsourcing?
Listed below are a few benefits of SaaS outsourcing which have become a primary reason for businesses utilizing this model:
Saves time and money
Outsourcing SaaS development allows companies to gain access to a multi-functional team that builds the product in the most cost-effective and quickest manner without compromising quality. Several businesses choose to outsource SaaS development as it minimizes overhead management and reduces the cost of recruitment.
Moreover, outsourcing your work to an already established team of experts is less time-consuming than hiring an in-house developer.
Access to specialized service providers
SaaS products are multicomponent systems and are not always the simplest to develop. The development of SaaS applications requires an adequate amount of knowledge and expertise in building and supporting infrastructure and cloud services, data storage and management, application development, third-party integrations, etc.
SaaS companies frequently collaborate with tech providers to go beyond merely assembling engineering teams; they seek partners who bring substantial technological and managerial expertise to their projects. They aid clients not just in assembling teams but in selecting the most suitable tech stack, identifying optimal third-party services, and harnessing the full potential of cloud technology. This partnership extends beyond staffing, providing crucial guidance in shaping the technological backbone that powers SaaS products.
Enhanced flexibility and scalability
For businesses, outsourcing SaaS development has major advantages like increased flexibility and scalability. First off, it enables companies to adjust their development efforts in accordance with project requirements. Outsourcing allows for quick resource adjustments, whether it be in response to changing demands, growing or minimizing the team, or meeting seasonal demands.
Moreover, it enables the rapid scaling of operations without the hassle of recruiting, training, or managing additional in-house staff. Maintaining a competitive edge and satisfying market demands requires constant growth and staying abreast of emerging technologies, which is ensured by outsourcing.
Improved product strategy
Outsourcing SaaS development to a tech provider offers a strategic edge, leveraging the vendor’s industry experience for added value. These providers offer invaluable insights into making informed technical decisions, guiding technology choices, analytics utilization, and feature prioritization. Furthermore, their deep understanding of business objectives and long-term SaaS project involvement enables them to contribute significantly to product strategy.
Less overhead management
Overhead management is a task observed by almost every company to look after the individual progress of each employee. Though necessary, this task adds additional burden upon the company staff.
Outsourcing SaaS development reduces this burden of overhead management as it is the responsibility of the SaaS providers to track and manage the specialists employed by them. Moreover, experienced SaaS vendors may also assist you in devising more effective plans and modifying technical specifications, eliminating the need for intricate micromanagement.
How to choose the right SaaS outsourcing agency?
Before taking the leap of selecting your outsourcing partner, make sure to consider these factors to avoid unfavorable outcomes in the future:
- Make your goals understandable: You need to take appropriate measures to make your requirements easily understandable so that the service provider company is aware of your business needs. Keep everything clear and precise so that there is no room for confusion regarding the actions that need to be performed.
- Evaluate the outsourcing company’s reputation: Evaluating your vendor’s reputation is essential to ensure that they have completed past projects and are reliable enough to be trusted with your work. One way to evaluate the company’s reputation is by collecting testimonials from past clients.
- Verify that your needs match their skill set: Not every company provides all kinds of services, so identifying whether the companies you are interested in providing the services you require help filter out options that don’t meet the criteria.
- Build effective communication: Effective communication is pivotal in business engagements to prevent misunderstandings and ensure alignment of requirements. It’s crucial to review and emphasize critical points multiple times during discussions to ensure clarity. After onboarding, maintain regular communication to track progress, offer feedback, and maintain ownership of the project to promote a collaborative environment.
- Define terms and conditions: Review the contract policies of the service provider before finalizing an agreement to help you stay out of trouble down the road. In order to make it simpler to back out if necessary, it is crucial that you emphasize the contractual policies during the initial discussions.
Why should you choose Codesy as your SaaS outsourcing partner?
Finding the right partner whom you can trust and work with always requires extensive research and attention to detail. You can save your resources involved in hunting for the best outsourcing company and choose Codesy Consulting to provide the services required by your business.
Codesy has been in the outsourcing business for several years and boasts a long list of clients who praise Codesy’s efforts in developing effective solutions and rendering amazing services. So, what are you waiting for? Contact Codesy today to outsource SaaS development and expect wonderful results!