Custom Software Development Outsourcing: Boosting Efficiency and Innovation

Software development outsourcing is on the rise, with a projected growth of 70% in 2024. Outsourcing offers plenty of benefits, ranging from cost savings to access to specialized expertise. In this article, we'll delve into the world of custom software development outsourcing, exploring its advantages, challenges, best practices, and future trends.

What is Custom Software Development?

Custom software development refers to the process of designing, creating, deploying, and maintaining software solutions tailored to meet specific business requirements. Unlike off-the-shelf software, custom software is built from scratch or customized extensively to address unique challenges and opportunities faced by an organization. This approach allows businesses to have full control over the features, functionality, and user experience of the software, ensuring alignment with their goals and processes. Custom software development involves collaboration between clients and developers to define requirements, develop a solution, and iterate based on feedback. The result is a highly personalized and scalable software solution that enhances operational efficiency, drives innovation, and gives businesses a competitive edge in their respective industries.

When considering custom software development outsourcing, businesses often explore various software development outsourcing models to find the best fit for their needs.

5 Popular Types of Customized Software

Customized software solutions cater to various business needs, offering tailored functionalities and features. Here are five popular types:

Content Management Systems (CMS)

Content Management Systems (CMS) enable businesses to create, manage, and publish digital content efficiently. With features like content editing, version control, and workflow management, CMS platforms empower organizations to maintain an engaging online presence. Whether it's a blog, e-commerce site, or corporate website, CMS software provides the flexibility and scalability needed to adapt to evolving content requirements.

Customer Relationship Management (CRM)

Customer Relationship Management (CRM) software helps businesses manage interactions with customers and prospects, streamlining sales, marketing, and customer service processes. By centralizing customer data, tracking leads, and automating communication, CRM systems enhance customer engagement and retention. With customizable features like lead scoring, pipeline management, and analytics, CRM solutions empower businesses to build stronger relationships and drive revenue growth.

Enterprise Resource Planning System (ERP)

Enterprise Resource Planning (ERP) systems integrate core business processes, such as finance, HR, inventory, and supply chain management, into a unified platform. By providing real-time visibility and data insights across departments, ERP software enables businesses to optimize operations, improve decision-making, and enhance productivity. With modules for accounting, procurement, manufacturing, and more, ERP solutions offer comprehensive functionality tailored to enterprise needs.

Enterprise Software Solutions

Enterprise software solutions encompass a wide range of applications designed to support large-scale business operations. These may include human resources management systems (HRMS), enterprise asset management (EAM), and project management software. Tailored to meet the specific requirements of large organizations, enterprise software solutions offer robust features, scalability, and integration capabilities to drive efficiency and competitiveness.

Operations Management Software

Operations Management Software focuses on optimizing various aspects of business operations, such as production, inventory, and supply chain management. These solutions streamline workflows, automate tasks, and improve resource utilization, leading to enhanced efficiency and cost savings. With features like demand forecasting, inventory tracking, and logistics management, operations management software helps businesses meet customer demands while minimizing waste and maximizing profitability.

Benefits of Custom Software Development Outsourcing

Unique Solution Exclusively for Your Business

Outsourcing custom software development ensures tailored solutions aligned with your business needs. With dedicated teams focusing solely on your project, you can expect personalized software that addresses your unique challenges and goals. This approach fosters innovation and differentiation, giving your business a competitive edge in the market. By collaborating closely with outsourcing partners, you can customize every aspect of the software, from features to user experience, resulting in a solution that truly reflects your brand identity and values.

Cost-Effectiveness and Budget Management

Custom software development outsourcing offers significant cost savings compared to in-house development. 

Nielsen reports that businesses can save up to 70% in expenses by outsourcing software development. 

By outsourcing certain tasks, businesses can reduce overhead costs associated with salaries, benefits, and training. Additionally, outsourcing allows for better budget management, as costs are typically predictable and transparent. With a fixed budget, businesses can allocate resources more efficiently and invest in other areas of growth. This cost-effective approach ensures that businesses can achieve their software development goals without breaking the bank.

Utilizing an offshore software development center can significantly reduce development costs while maintaining high-quality standards.

Access to Global Talent and the Latest Technologies

Outsourcing custom software development provides access to a diverse pool of talent from around the globe. 

A regional report by Gartner indicates that 90% of Fortune 500 companies outsource software development to access global talent and technology expertise. 

With outsourcing partners located in different regions, businesses can tap into specialized expertise and niche skills that may not be available locally. Furthermore, outsourcing enables access to the latest technologies and development methodologies, ensuring that your software stays ahead of the curve. By leveraging the collective knowledge and experience of global talent, businesses can innovate faster and deliver cutting-edge solutions to their customers.

Partnering with offshore software development companies allows businesses to tap into a global pool of highly skilled developers.

Flexible Capacity & Scalability

Custom software development outsourcing offers flexible capacity and scalability to accommodate changing business needs. Whether you need to scale up development resources to meet project deadlines or scale down during slower periods, outsourcing partners can adjust their teams accordingly. This scalability ensures that businesses can adapt to fluctuations in demand without being constrained by internal resources. Additionally, outsourcing allows for rapid ramp-up of development efforts for new projects or initiatives, enabling businesses to seize opportunities and stay agile in a competitive market.

Concentrate on Core Business Functions

Outsourcing custom software development allows businesses to focus on their core competencies and strategic initiatives. By delegating non-core functions to outsourcing partners, businesses can free up internal resources and bandwidth to concentrate on activities that drive growth and innovation. This strategic outsourcing approach enables businesses to streamline operations, improve efficiency, and maximize productivity. 

A Statista survey revealed that 80% of businesses prioritize outsourcing for quality assurance and ongoing maintenance. 

By entrusting software development to external experts, businesses can leverage their specialized skills and knowledge while maintaining their focus on core business functions.

Quality Assurance and Continuous Support

Custom software development outsourcing offers comprehensive quality assurance and continuous support throughout the development lifecycle. Outsourcing partners follow rigorous testing protocols to ensure that software meets quality standards and performs reliably. 

Additionally, outsourcing providers offer ongoing maintenance and support services to address any issues or updates post-launch. This commitment to quality assurance and support ensures that businesses can deploy robust and reliable software solutions that meet their long-term needs. With dedicated support teams in place, businesses can rest assured that their software will remain secure, stable, and up-to-date.

Challenges of Custom Software Development Outsourcing

Communication Barriers

One of the most common challenges of outsourcing is communication barriers. Differences in language, culture, and time zones can hinder effective collaboration between remote teams and their clients. However, these challenges can be mitigated through clear communication channels, regular meetings, and the use of collaboration tools.

Choosing between nearshore software outsourcing and offshore outsourcing can influence the ease of communication due to time zone differences and cultural alignment.

Time Zone Differences

Time zone differences can also pose logistical challenges for outsourcing projects. Coordinating schedules and ensuring overlap hours for real-time communication can be difficult when teams are located in different parts of the world. Nevertheless, proactive planning and establishing clear communication protocols can help alleviate these issues.

Quality Control

Maintaining quality standards can be a concern when outsourcing software development. Without direct oversight, companies may worry about the consistency and reliability of the work delivered by external teams. Implementing robust quality assurance processes and conducting regular code reviews can help ensure that deliverables meet the desired standards.

Data Security Concerns

Data security is another critical consideration when outsourcing custom software development. Entrusting sensitive information and intellectual property to external vendors carries inherent risks. To mitigate these risks, companies should conduct thorough due diligence on potential outsourcing partners and implement stringent data protection measures.

Key Considerations When Choosing a Custom Software Outsourcing Partner

When selecting a custom software outsourcing partner, several crucial factors should guide your decision-making process:

Experience and Expertise

Look for a partner with a proven track record of successfully delivering custom software solutions in your industry. Experienced firms bring valuable insights and best practices to the table, ensuring the success of your project.

Evaluating different outsourcing companies is crucial to ensure they meet your project requirements and quality expectations.

Knowledge of Innovation Technologies

Ensure your partner stays abreast of the latest technological advancements and innovation trends. A forward-thinking approach enables the adoption of cutting-edge technologies, enhancing the functionality and competitiveness of your software solution.

For specialized projects, such as developing custom construction softwares, finding an outsourcing partner with specific industry expertise is crucial.

Scalability and Flexibility

Choose a partner capable of scaling their resources and adapting to changing project requirements. Flexibility ensures the seamless integration of new features and functionalities as your business grows.

Security and Confidentiality

Prioritize partners with robust security measures and a commitment to protecting sensitive data. Confidentiality agreements and compliance with industry regulations safeguard your intellectual property and customer information.

Quality Control and Process Quality Assurance

Select a partner with stringent quality control processes in place. Rigorous testing protocols and quality assurance procedures guarantee the reliability, performance, and usability of your custom software solution.

Post-Implementation Support

Ensure your partner provides comprehensive post-implementation support and maintenance services. Timely updates, bug fixes, and ongoing technical assistance are essential for the long-term success and sustainability of your software solution.

Cultural Fit and Compatibility

Consider the cultural fit and compatibility between your organization and the outsourcing partner. Effective communication, shared values, and a collaborative working relationship foster trust and synergy, driving project success.

MOR Software - Expertise in Custom Software Development Outsourcing

At MOR Software, our expertise is underscored by numerous achievements and recognitions. Our software engineers hold over 150 international certifications, showcasing proficiency in prominent IT skills like AWS Cloud, Salesforce, Mulesoft, and more. Additionally, they possess certifications in project management, scrum mastery, and language proficiency, ensuring comprehensive skill sets for diverse project requirements.

We're proud to have been ranked among the Top 10 Leading Information and Communication Technology (ICT) Companies in Vietnam in 2021, specifically recognized for our impressive growth. Moreover, our commitment to quality is evident through our ISO 9001:2015 certification for Quality Management System and ISO/IEC 27001:2013 certification for Information Security Technical standards, demonstrating adherence to stringent quality and security protocols.

Furthermore, our partnerships with industry leaders such as Salesforce Consulting and ISTQB as Platinum Partners highlight our credibility and commitment to excellence in software development. These accomplishments collectively testify to MOR Software's exceptional expertise and reliability as a premier choice for software development outsourcing.

Case studies

PEOPLE, a significant ecosystem for human resources management in Japan, was established in October 2011. This is an Enterprise Software Solution, which focuses on managing internal operations such as staff evaluation, recruitment, planning, and target management. Over time, more corporates, especially commercial banks, have trusted PEOPLE for its efficiency and convenience.

Due to the high demand for developing new features and its system product, the development team of PEOPLE was overwhelmed. Consequently, they sought solutions from MOR Software.

MOR Software was engaged as a trusted vendor. The company's talented engineers proposed innovative solutions based on their expertise and experience. They not only provided a dedicated team of software engineers but also suggested new feature development and consulted on utilizing new technologies for the PEOPLE project.

The project has been ongoing for five years with a total cost of approximately $8 billion. Currently, nearly 100 developers from MOR Software are involved. Initially an outsourcing team, MOR Software has evolved into a reliable partner and distributor of the PEOPLE project. The company's engineers swiftly integrated customer data and received a commendation for their innovative solutions and IT talents. Leveraging their understanding of PEOPLE's advantages, MOR Software successfully promoted the platform in the Vietnamese market.

Feedback from the client indicates satisfaction with the IT talents and technology solutions provided by MOR Software. See feedback from Mr. Shin Matsuda - CEO of PEOPLE: 

FAQs about Custom Software Development Outsourcing

What is the process for developing Software?

The software development process typically involves requirements gathering, design, development, testing, deployment, and maintenance. 

What mistakes do you need to avoid when building Custom Software?

Common mistakes in building custom software include unclear requirements, inadequate testing, poor communication, and underestimating project complexity.

What is the average cost of custom software development?

The average cost of custom software development varies widely depending on factors like scope, complexity, and technology used, but it can range from thousands to millions of dollars.

What Are Some Examples of Custom Software?

Examples of custom software include enterprise resource planning (ERP) systems, customer relationship management (CRM) software, inventory management systems, and e-commerce platforms.

What is the difference between Custom Software and Off-the-Shelf Software?

Custom software is tailored to specific business needs and built from scratch, whereas off-the-shelf software is pre-built and sold to a broad audience, requiring businesses to adapt to its functionalities.