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November 12, 2012

5 Levels of Software Outsourcing Demonstrate Client Maturity

chess.jpgA company may want to establish offshore operations, but if they are not at the right stage, they may be acting beyond their capabilities. The five levels of software outsourcing demonstrate your company’s maturity, and knowing what stage you are at is crucial to successfully engaging with a software development services company.


Stage one is that of the offshore bystander. They are not yet taking advantage of the benefits of global software development resources, but they are at least considering the prospect as they watch other companies outsource. The first stage is the opportunity for the company to think about what level they are at and whether they are ready to move forward with an offshore operation.

The next level, stage two, is the experimental piece. In this stage, the company is likely to outsource a project with a small number of people, simply to see how it works and gain knowledge about the experience. For software development companies with minimal needs, this stage might be as far as they need to go to accommodate their small projects. Others will use this stage as a stepping-stone to recognizing the incredible value of outsourcing.

Stage three is cost strategy, in which a company is striving to get software developed at a lower cost, as they perfect their processes. This stage can be very broad, in that it can be geared towards hiring programmers in the early stages, or it can be about embracing the concept of global software development. Outsourcing not only solves the cost problems that many company face; it solves the overall resource problem in general.

The fourth stage is all about strategy. Outsourcing gives company the opportunity to work with those who have specialized skills and knowledge, which increases speed, agility and flexibility. Those who outsource gain location-specific advantages that they would not normally have access to. This tactic reduces cost and increases leverage for your company as you begin to build a global network.

Last but not least is stage five: the offshore operation. At this point, you have made a solid commitment toward outsourcing to a foreign country. In this stage, you move beyond that of a mere strategic advantage and gain even more leverage by possessing a subsidiary. It is a full expansion of your software development company, with access to previously unattainable resources and consumers.

It is important that a company is aware of their level of maturity. There is a danger in trying to perform at stage four when a company is only at stage two. This was apparent in a client who wanted to clone an online auction web site at a fixed price yet did not have enough detail or experience to receive an adequate bid. To gain leverage offshore, it is crucial that you can complete a small task before committing to an ongoing process. At Accelerance, we can help clients who are in stages three and four, as well as those in stage two who are interested in growing. Once a client knows what their goals are, we can assist in leveraging resources in the most effective manner.

To learn more about the 5 levels of software outsourcing, or to discover how an Accelerance Partner can assist you with your IT or software development requirements, please contact us today at 877-992-2235 x 100 or by email at info @

Andy Hilliard

As CEO, Andy leads and advocates for the globalization and collaboration of great software teams with companies in search of talent, innovation and a globally-distributed extension of their engineering function and culture. Andy founded the ground-breaking nearshore software development services company, Isthmus Costa...

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