Outsourcing is now one of the most contentious issues globally during the last couple of decades. Outsourcing in the context of small business does not always imply sending work elsewhere. When most small company owners think of outsourcing, they're picturing recruiting freelance writers to generate content, engaging an accounting firm to handle bookkeeping, or depending on an employment agency to find and place hired staff.
This post will go through a few of the greatest SaaS organizations that have outsourced software development to third parties.
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What is Outsourcing?
When a company pays an outside provider to supply goods and services rather than completing the work in-house, it is known as outsourcing. The technique began in the 1970s and became increasingly popular for businesses to minimize their operational cost.
Outsourcing stands to reason only when the cost of purchasing goods or services from a third party is much less than the cost of providing the service or manufacturing the product in-house. However, many businesses have learned that pricing isn't the only factor to consider when deciding whether or not to outsource.
Advantages of Outsourcing
Here is a list of the top advantages of Outsourcing.
Your core staff may excel in a few areas, but no one is excellent in all areas. Companies can frequently significantly increase performance by outsourcing specific jobs by drawing on the niche skills of experts in certain fields.
Things Get Done Fast
One of the most common motivations for small firms to outsource work is to complete it faster. If you have a small team, delegating time-consuming tasks to freelancers or outside organizations can help you get things done much faster.
Focus on What Matters
Another advantage of outsourcing jobs is that it gives you more freedom. You will be able to focus your expertise on strengthening and refining the essential procedures that keep your organization running smoothly by passing on supporting processes.
Share Some Risk
Risk assessment is one of the most important factors for any project. You will manage risk by outsourcing a particular process or campaign to experts or specialists.
Outsourcing fragmented work is nearly always less expensive than recruiting full-time employees. You will not only save time and money on recruiting but your profit margin will also be increased due to lower overheads.
Work Around the Clock
The biggest advantage of outsourcing is digital work to another country is the significant time zone and holiday variances you may experience.
Simplify Project Management
When you opt to outsource work through various specialist freelancing websites and online services, you'll frequently be given active and straightforward platforms to help you keep track of what's being done, when it's due, and how it'll be paid. Most of this may be automated, allowing you to focus on other vital tasks.
Simplify Work Relationships
Many small company teams are made up of close friends and family, which is wonderful. When you're close to your coworkers, though, it might lead to problems if work isn't done properly. You can usually reduce work connections to basic, contractual arrangements by outsourcing tasks.
Efforts Are More Targeted
Another advantage of outsourcing is that it allows you to develop and execute more effective, focused campaigns and initiatives that you otherwise wouldn't be able to handle. This allows your company to take new risks and test alternative exposure approaches.
Peace of Mind
Opting to outsource with a trustworthy individual or agency should calm you that jobs will be done correctly and effectively without you needing to worry or raise a finger. What could be better than that?
What is SaaS?
Software-as-a-Service (SaaS) is a software licensing model in which users pay a fee for access to software hosted on external servers rather than on internal servers.
Typically, Software-as-a-Service is accessible via a web browser, with users entering user login details. Instead of installing the software on their computer, users can access the program over the Internet.
Benefits of SaaS (Software as a Service)
Here are the benefits you will get using SaaS for your next project.
For many reasons, using SaaS can save you a lot of money. To begin with, SaaS reduces the user's upfront fees of purchase and installation. SaaS is simply downloaded and essentially maintenance-free from the user's end, eliminating the need to spend big sums of money on physical resources.
Time is a valuable commodity. Fortunately, SaaS can assist firms in reducing both costs and time. Installation of SaaS apps requires only an internet connection and the activation of a login.
Scalability and Accessibility
Another advantage of SaaS is the incredible customization it provides. Businesses that use SaaS can modify their consumption plan without giving early notice because the software is maintained externally by the vendor. Furthermore, because SaaS solutions are web-based, they can be accessed from anywhere in the world.
Users can connect to the most recent updated version of their SaaS product when using SaaS. Updates and upgrades are managed by the SaaS vendor, which eliminates the need to install patches.
SaaS guarantees that the end-user has access to the most recent version of the program at all times. The concept of software as a service involves removing software maintenance and incompatibility issues, resulting in a more streamlined focus and increased productivity for your business.
SaaS solutions, in most cases, can keep a company's corporate data safer than traditional software. For example, at Radixweb, we have many data centers located throughout the globe that communicate with the IT infrastructure to serve our SaaS products. If an issue arises in one of our data centers, the other will continue to provide our services.
High Adoption Rates
Because SaaS solutions are offered through the Internet. They often require significantly less training because employees are already accustomed to working on the Internet, resulting in quick acceptance by the workforce.
Top SaaS Companies That Outsourced Software Development
Outsourcing brings many advantages to SaaS development. Building a SaaS product introduces many challenges, especially acquiring the right talent for the project meeting budget and time targets. Many successful businesses out there recognize their shortages and turn to development companies.
This article presents a list of top SaaS companies that outsourced development and became successful.
One of the most popular communication tools many businesses use, including Selleo and some of our key clients, is Slack. Not everybody is aware that the development of this collaboration application launched in 2013 was outsourced.
The four founders of the startup contacted a design company to handle the website, application, and Slack’s logo. The MVP was later distributed to beta testers and gained 8k users on the final launch day.
As for today, Slack is used by nearly 8 million users per day and is steadily gaining momentum and recognition.
Founded in 2008, Expensify is a tool that helps to organize, collect and store expenses, receipts, and other transactions. To shorten their time-to-market, they decided to outsource the development of the entire back-end.
That allowed the Expensify team to focus solely on the front-end and other business operations crucial to a successful release.
They are a company with over 130 employees used by 2 million users growing day by day.
Klout is a ranking tool created for social media. It allows users to rank users based on their social media influence. The founder of Klout recognized the power of outsourcing and went even further with the development, flying over to meet the team and working with them on-site.
After just three months of intensive work, they created a working prototype. Working this way allowed them to save money and time while focusing on a distraction-free environment. Although Klout is a rather extreme example of outsourcing, it is surely one of the more interesting ones.
Groove - an online customer support platform - is yet another amazing example of what outsourcing can give you. After selling his previous company, its founder, Alex Turnbull, wanted to get back into the game as quickly as possible. Lacking technical knowledge and staff, he decided to outsource the product's entire development.
This allowed him to save money that would have been spent on hiring employees, offices, etc.
In 2016, Groove gained a total revenue of $5.2 million and is now employing people worldwide.
This is an example of a company that decided to outsource its initial development and continues to outsource many business areas. AppSumo is a website that distributes and shares deals on subscriptions, software, and online courses.
Noah Kagan - the founder of AppSumo - hired developers to code a PayPal integration into his MVP. This integration allowed him to start selling subscriptions and grow the business.
Over 700k people now use AppSumo, and its value exceeds 2 million.
A Data-to-Everything Platform deals with data search and analysis used by enterprises like Airbus or Porshe. They decided to reach out to outsourcing agencies to design and develop the infrastructure and a ready solution. With over 5k employees and 27 offices in various locations worldwide, Splunk is yet another success story of outsourcing.
Yes, Microsoft is a giant that does not have to be introduced. Employing more than 131k people, Microsoft is said to have as many remote contractors as its direct employees.
In 2010 Microsoft signed an outsourcing deal with a provider in India to manage its internal IT operations. The partner was responsible for managing the IT help desk and servicing applications, devices, and databases in 450 locations in more than 100 countries.
This allowed Microsoft to reduce IT support costs and even scored them an award thanks to the consulting with Accenture.
This electronic signature service provider has been outsourcing product development, which allowed them to cut costs by half and provided flexibility in the team size. The outsourcing team joined the existing DocuSign and is dealing with adding new features to the service and support and maintenance of the system.
Adroll is a marketing platform supporting their clients in attracting, converting, and growing their customer base. It serves over 30k clients worldwide. Adroll decided to outsource the marketing platform development by expanding its existing team with 20 remote full-stack engineers. Technologies like Python, React.js, and Node.js were involved in the project.
15five is a US-based SaaS company helping its clients to improve employee performance. The solution provides managers with tools for giving feedback, objective tracking, reviews, etc. They are serving clients like LinkedIn, Spotify, or Hubspot.
The Co-founder and CTO of 15five decided to outsource Python development as the resources available on-site was not enough for him. This gave him the freedom to scale and focus on the product itself.
This Account-Based Orchestration Platform utilizes the power of AI and machine learning to analyze buyers’ behavior helping revenue teams gather information about buyers.
Thanks to that, they can prepare better offers, generate more opportunities and deals in advance, and in the long run, be more competitive.
6sense was looking to hire talented engineers in San Francisco, but in the end, they decided to outsource the development, saving money, time and gaining international experts.
Those few stories from SaaS startups that recognized the value of outsourcing their development are truly inspiring. They are proof that outsourcing saves money and quickly creates prototypes and shortens time-to-market.
You can read more about outsourcing in our other posts.
And if you are looking for a company to help with your SaaS development, contact us!