Outsource Your Next Technology Solution

New functionalities and solutions are the way today’s tech companies remain competitive—Gartner’s CIO Agenda found more than 80% of tech organizations are moving quickly on new development initiatives designed to make them more innovative, resilient, and competitive. 

The PwC Pulse Survey, documenting the insights of thousands of CIOs, CTOs, and other technology leaders, asked where companies were spending time and money. The results were somewhat surprising. Despite the importance of developing and introducing new solutions to customers, only 27% of respondents listed acquiring and developing the right talent as a top priority. 

Part of that might be because we’re amid a tech-talent shortage—there are more skilled specialists than ever needed in today’s development industry, but a real lack of candidates to fill these roles. Another reason might be that savvy organizations are outsourcing their tech solutions to save money, extend their team without making hires of their own (partially to combat the tech-talent shortage), and efficiently keep up with the demand for new proprietary solutions. 

What You'll Find in This Post: 

• What is Tech Outsourcing? 
• The Benefits of Outsourcing Tech Solutions
• Our Suggested Outsourcing Modality 
• How to Find the Right Outsourcing Partner
• Related Resources 

What is Tech Outsourcing? 

Outsourcing is often thought of as having freelance overseas talent, working for a fraction of a US-based developer’s salary, create your new solutions. That certainly happens, but it’s not the only modality outsourcing covers. Outsourcing is simply using external solutions to develop your new products or services. It also encompasses utilizing domestic freelancers, outsourcing agencies, private labeling or white labeling your new solutions. 

We’ll go over our suggested modality below, but first, let’s go over the benefits that make outsourcing so popular among tech companies—59% of organizations outsource in some capacity to cut costs.  

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• Save Time and Money
• Extend the Bandwidth of Your Team
• Keep Up With Demand
• Remain Competitive
• Create Products That Scale

McKinsey found there’s a 70% failure rate for new digital tools, which is another reason businesses might be drawn to outsourcing—you’re trusting professionals who have had others use their products, mitigating the risk of spending time and resources developing a new solution only to have it not work. 

Save Time and Money

Estimates place the range for developing a market viable product (MVP) between $50-250k. Still, costs can often go higher—70% of software development costs occur after implementation, and unexpected challenges result in 53% of projects costing 189% more than the original estimate. Upkeep and updates also account for additional expenditures. 

DevSquad reports that building an MVP takes an average of 2-10 months, while additional sources report 8-9 months to get new platforms up and running. Keep in mind that this doesn’t account for the time it takes to hire and onboard new talent to produce your new solutions. 

61% of U.S. recruiters report hiring developers as a big challenge, especially because of how expensive it is—the average developer salary is $110,140. 

Outsourcing bypasses the time and money spent on building new solutions from scratch and can save more than 50% of the SaaS development cost. 

Speed wins when developing new SaaS solutions, and competitive outsourcing organizations can get new solutions up and running in weeks or days.

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Extend Your Team's Bandwidth

One of the biggest benefits of outsourcing new tech features or platforms is that it doesn’t pull focus from your team off your core competencies, allowing them to work unencumbered and continue delivering the product and features that initially delighted your customers. 

Outsourcing can also be highly beneficial if you’re branching out into new products or features your team doesn’t have the experience or expertise to take on. It widens the scope of what you’re able to create. 

Additionally, some outsourcing modalities like private labeling, white labeling, or working with an outsourcing agency already have fully staffed departments of experts—ranging from customer service to marketing to sales, in addition, of course, to engineering and product—who will help ensure the product they deliver supports your goals and grows your business. 

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Keep Up With Demand

Today’s SaaS customers expect the regular release of new features and functionalities. 83% of tech executives foresee a greater need for new products and services to stay competitive. Outsourcing will become critical for businesses, especially smaller companies, as this expectation for innovation grows and customers expect new functions faster. 

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Remain Competitive

As the intro of this piece made clear, today’s tech companies run on innovation, and today’s work runs on tech—99% of businesses use SaaS solutions, and 80% of organizations rely solely on SaaS applications to run their business.

With 17,000 SaaS companies serving 59 billion worldwide customers, competition between U.S. companies for customers is fierce, and companies that can’t grow run the risk of failure. McKinsey found that if SaaS companies only grow at 20% annually, there’s a 92% chance they’ll close shop within a few years. 

Outsourcing tech talent allows companies to grow cost-efficiently, saving on operational and labor costs without sacrificing the quality of their service, core competencies, or new features. It will enable your organization to remain competitive in ways you wouldn’t be relying only on internal staff.

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Create Products That Scale

Developing new applications or services takes time and resources, especially if you’re exploring a competency you’ve never worked with before. However, you need the proper infrastructure to grow these additional competencies. A mistake many tech companies make is attempting to grow their offerings and solutions at the expense of the service and solution that made their business successful in the first place. 

Outsourcing allows your organization to scale quickly and efficiently with the support needed to make this growth successful. It also allows you to scale up or down depending on current business needs. 

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Our Suggested Outsourcing Method: Private Label Your New Tech Solutions

Many companies are partnering with white label or private label companies to save time and money, keep up with the demand for new feature velocity, remain competitive, extend their teams, and ensure they’re scaling healthily. While the white label and private label modalities are often used interchangeably, there’s a reason we suggest using private labeling: customizations. 

What is Private Labeling? 

Private label software is purchased from a SaaS or PaaS provider and customized with the branding and bespoke workflows the purchaser requires. Instead of draining internal resources, researching, and building additional software, private label purchasers work with private label providers as a mutually beneficial partnership versus the traditional buyer/client relationship. Since end-users aren’t aware of this behind-the-scenes partnership, and customers can present their private label platforms as proprietary solutions, it strengthens the brand and scope of the private label purchaser’s product offerings.

White label partnerships work similarly, but they only offer custom branding. Going further with the customizations tailored to specific business goals and industry practices sets private labeling apart.

Why Private Label Over Other Outsourcing Modalities? 

We suggest private labeling over working with freelancers or even outsourcing agencies because private label developers typically work with and have perfected their solution of choice. For example, here at HiringThing, we private label our award-winning applicant tracking system (ATS). An ATS is hiring software that streamlines, automates, and strengthens the recruiting process. We’re hiring and HR tech experts, keep up with ever-changing trends, and know how to market and sell this product. We’re not creating any new solution you pay us to create, but rather are committed to ensuring this solution and the support that comes with it is top-notch. That’s the private label difference. 

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How to Find the Right Outsourcing Partner

A private label partnership goes deeper than your typical buyer/customer relationship. They’re an extension of your team and brand. You want to ensure that this relationship is right on every level before proceeding to stake a large part of your business in this new relationship.

No matter what outsourcing modality you choose, an outsourcing partner isn’t a task to be taken lightly—the 2022 Global Outsourcing Trends and Rates Guide found that 97% of SaaS companies that outsource aren’t “qualified to deliver the outcomes” companies need. 50% of companies end their outsourcing partnerships because of “performance or fit issues.” 

Those stats aren’t promising, but we’ve got you covered. Since private labeling is crucial to the success of our business, it’s something we know in and out and think about often. We've created The Ultimate Guide to Establishing a SaaS Private Label Partnership to help companies looking to private label new solutions ensure they have all the information they need to make the most informed decisions. Check it out!