A software development model for 2022

I’ll just say it – the co-location development model is a waste of resources and offers negligible benefits. Is this statement controversial? Sure, but it’s getting less and less every day. More and more companies are realizing that remote and outsourced development can lower costs, is highly scalable, and provides access to a broader talent pool. And talent is the key to what really matters in modern software development.

With COVID, distributed development makes even more sense as the economic disruptions in 2020 rocked the world and we still haven’t fully recovered. Working hours and job losses were four times higher than the crash of ’09.

Paradoxically, despite record unemployment, companies could not find the right people to fill positions – another kind of record high. In addition, the average salaries in the IT industry are rising, partly to retain talent.

With the traditional co-location development model, we see these key challenges:

– Talent acquisition and retention

– Transition to remote work

-Stay competitive as salaries rise

And this is where distributed development and remote insourcing come into play. Let’s examine both models in more detail.

How remote insourcing and distributed software development work

At its core, a distributed team is a group of people who work together across geographical boundaries. You use various collaborative tools for real-time communication, but you can also work together asynchronously.

You can hire high quality IT staff from countries with lower salaries, reducing costs without compromising on quality. IT employees from Eastern Europe, especially from Ukraine and Belarus, have rightly earned a reputation as highly qualified, goal-oriented specialists. While the salaries of Eastern European team members will be more expensive than developers from South Asia, for example, the quality of their work is closer to that of their US colleagues.

2021 “Cost of Ownership” (salaries, bonuses, additional benefits, other expenses) for North American developers ranged from $ 80,000 to $ 300,000 per year; in Central and Eastern Europe, service provider charges were significantly lower, going from $ 40,000 to $ 140,000. It’s not just about savings, but above all about time-to-market, the success of your innovation and competition.

If distributed development sounds pretty good, just wait to hear about remote insourcing. When you create a distributed development team, you still have to deal with sourcing, training, and retaining people – they’re just in more convenient geographic locations.

Traditionally, when companies didn’t want to grapple with all of this, they worked with an outsourced development team. However, the tradeoff with outsourcing is that you have little or no control over the quality and training of the team.

Remote insourcing is the best of both worlds – it gives you access to lower salaries and better scalability while giving you full control over productivity and quality. In this model, a remote, independent development team integrates with your own employees.

As opposed to an outsourced team, a remote, inlaid team works under your direction, and you would work with them as you would with your own employees. However, they also get the help and service they need to grow and shrink the team as needed.

A Remote Insourcing Case Study: Health Portal

To illustrate the benefits of remote insourcing, I would like to a Case study with you: A US health care company wanted to develop a health portal that can support hospitals, practices and practice groups with business development. The company had previously worked with outsourcing providers, but their attempts failed due to a lack of skilled workers and organizational reasons.

After switching to the remote in-sourcing model, a team of five people seamlessly integrated into the company’s own employees. Due to the simple scalability of this model, the healthcare company could then increase the team it bought to more than 50 people.

Over 10 years of continuous collaboration, the remote insourcing team has designed and implemented 100 percent of the company’s health products, including a health portal that now serves five million people a year.

By following the remote insourcing model, the company was able to collaborate with highly skilled developers at a lower cost and maintain full control of the team.

Are you ready to change your model?

I want to leave you a quick checklist of whether distributed development or remote insourcing is right for you. Obviously, this won’t give you a definitive answer to your situation, but it should serve as a starting point for further research.

Distributed development

Remote insourcing

-You don’t need a quick turnaround time for team building.

-You want to use global markets to reduce costs.

-You want a team made up of your own employees.

-You don’t want to pay change management costs.

-You need a quick turnaround for team building.

-You want to take advantage of global markets without having to devote resources to finding talent around the world.

-You want full control of the team without having to worry about logistics.

-You want to work with an outsourced team as if they were your own employees.

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