I wrote about the benefits of outsourcing before, and how it lowers costs and increases efficiency. For software as a service (SaaS) companies, the competition is increasing, and businesses must find a way to meet market demands. Outsourcing allows them to do this.
SaaS is quickly becoming the single most popular method of software delivery for customers around the globe. According to a report by BetterCloud, 73% of businesses say their applications will be SaaS by 2020. And with the fastest-growing SaaS companies scaling their teams by 56% each year on average, hiring the right talent is very important. But it can also be their biggest hurdle. Finding talent is a challenge. There are many statistics that explain the skills gap in technology, and this gap is only growing in emerging tech industries. Growing, however, means finding talent that can handle new technology and challenges.
In today’s globalized economy, outsourcing is a common consideration for companies. Software outsourcing to Latin America, for instance, is becoming very popular for businesses in the United States because of the high rate of English proficiency and minimal time zone differences. Companies can work in real time with their outsourcing company, which is a plus for many businesses. As SaaS increases in popularity, outsourcing can indeed be an essential component in long-term success. Here are three reasons why SaaS companies should consider outsourcing as an option.
1. Rapid and enhanced growth
Software companies face particularly challenging barriers to success. One of the most pressing challenges is the rate at which they must grow to prosper.
Company growth depends on a variety of external factors, including market penetration, product adoption, and engagement. It also depends on a variety of internal factors, like product development and cost analysis. For most companies, an annual growth of 20% would certainly be an exciting achievement, but if a software company only grows 20% annually, it has a 92% chance of failing in just a few short years.
Many factors play into a software company’s failure to evolve quickly, including startup costs and failed marketing campaigns. Another factor that negatively affects growth, potentially underestimated, is employee motivation and satisfaction. Before that, finding qualified employees is a challenge. For SaaS companies, it can be difficult to determine whether or not a full-time employee is necessary for the project. That mistake can be costly. If a company hires and trains an employee only to not need them months later, both the cost to fire them and the cost to keep them on are quite high.
SasS companies often hire local talent to perform certain tasks, but those employees soon find themselves performing other duties that take them away from their core responsibilities. As time goes on, and when pressure for growth and development mounts, employee motivation to complete those peripheral job functions eventually decreases. When employee motivation deteriorates, so does progress.