If you aim to create an online marketplace but don’t have an in-house team of software experts—designers, developers, testers, quality assurance engineers, project managers—you should consider IT outsourcing.
By delegating a software project to a third-party contractor, it is possible to significantly reduce expenses while getting access to field-specific expertise. There are many other benefits of outsourcing marketplace development described in this article. Take a look.
Why do companies outsource IT tasks and projects?
Avasant reports that the total IT budget spent on software development outsourcing climbed from 12.7 per cent in 2019 to 13.6 per cent in 2020. Nearly 60 per cent of organisations outsourced at least some of their app creation projects last year in comparison with 56 per cent in 2019.
According to Deloitte Global Outsourcing Survey 2020, the primary reasons for IT outsourcing are to:
- Cut down project expenses (70 per cent)
- Increase flexibility (40 per cent)
- Speed up time-to-market (20 per cent)
- Get access to tools and processes (15 per cent)
- Achieve better agility (15 per cent)
Although cost savings is the main reason for outsourcing, Deloitte informs that the situation was different two years before. In the survey of 2018, analysts found that the main goals of customers were to improve time-to-market, scale resources faster, enhance user experience and gain a competitive advantage. However, reduced expenditures have become crucial due to an economic crisis triggered by the Covid-19 pandemic.
It is noteworthy that many world-famous companies—Alibaba, Coca-Cola, Procter & Gamble, Reuters—have already outsourced some of their activities, including design and development.
How does marketplace development outsourcing meet your needs?
The outsourcing of online marketplace development can help you address various issues, from cost reduction to improved time-to-market. Check out the five client requests below: if you have at least one match, you will benefit from using this practice.
1. I want to cut marketplace development cost
By delegating a software project to a third-party contractor, you can hire an online marketplace development company from the country with lower wages paid for the same skills and knowledge. As a result, you will reduce costs while saving app quality.
According to Salary.com, today hourly rates of software engineers in the following countries are:
- UK — $56-$85
- USA — $45-$63
- Netherlands — $70-$82
- Australia — $65-$95
- Singapore — $69-$87
However, software developers in Eastern Europe (Belarus, Ukraine, etc.) earn $20-$50 depending on their experience and achievements. Therefore, by outsourcing marketplace creation to this region, it is possible to cut expenditures by more than 50 per cent.
Find out the key benefits of outsourcing a software project to Belarus in the interview with Andrew Volchek, CEO and co-founder at Arateg.
IT outsourcing allows for assembling a team while avoiding expenses associated with office space and equipment. Furthermore, you don’t have to pay bonuses, sick leaves, holidays and taxes, resulting in substantial cost savings.
As a marketplace development outsourcing company charges only useful hours spent on implementing your project, you don’t have to pay for the inactivity of designers and engineers as you have to when having full-time employees. In addition, there is no need to focus on holding training events and programs for improving the qualification of software experts.
2. I don’t have a clear understanding of how to build a marketplace
After analysing project objectives, an IT outsourcing company specialising in marketplace development will help you prioritise features, choose a technology stack and work out software architecture.
Depending on your business needs, a software engineering firm will integrate the app with third-party services such as payment gateways (e.g. PayPal, Stripe, Braintree, Square), data analytics solutions, order and inventory management systems.
Additionally, software experts can assist you in picking and implementing a monetisation model. A trusted and experienced IT outsourcing partner takes care of the high availability, scalability, and resilience of an online marketplace platform, as well as safeguarding sensitive data.
3. I want to access field-specific expertise to address certain needs
With the outsourcing of marketplace platform development, you get access to a pool of IT talents worldwide. Thus, it is much easier to find engineers with highly specialised skills and knowledge, including technologies used, challenges addressed, and functionality implemented.
For instance, you may have to create machine learning models to analyse user data and offer personalised recommendations based on consumer preferences. You may also aim to enable continuous monitoring of software performance to instantly identify security vulnerabilities and block suspicious activities.
In addition, industrial solutions have their own specifics. For example, e-learning marketplaces generally provide features such as gamification and student performance tracking. Healthcare marketplaces often involve functionality like online appointment scheduling and consultations.
4. I need to start building an online marketplace as soon as possible
A quick start is crucial when you have to deliver a project under tight deadlines, for instance, to showcase the app to investors and raise funds.
By delegating online marketplace development to a third party, you don’t have to spend time and money on searching, interviewing and recruiting employees, which may consume six months or even more. Hence, it is possible to embark on marketplace platform creation in a few days or weeks depending on the occupancy of an IT outsourcing company.
5. It will be difficult to focus on core competencies if I hire an in-house team
Software development outsourcing enables you to focus time, effort and resources on core activities while delegating online marketplace creation to a third-party contractor. Thanks to this, top managers and in-house employees can devote themselves to other important tasks, for example, new contract negotiation, correspondence handling and business strategy implementation.
As a customer, you should validate the outcome of each project stage in order to make sure everything is going according to the plan. However, this process doesn’t consume a lot of time while you faster get an online marketplace platform that meets expectations.
“A lot of IT organisations are tired of driving things that don’t give the business a competitive advantage. They’re ready to let someone else take the wheel so they can focus on things that are more strategic,” said David Wagner, senior research director for Computer Economics, a service of Avasant Research.
The outsourcing of online marketplace development offers various benefits, from cost savings to increased flexibility and efficiency. However, some organisations have concerns about the transparency of app creation and meeting deadlines. To prevent them, you should hire a trusted IT outsourcing firm that takes care of effective cooperation.
For this purpose, you should check out reviews of previous clients, taking into account whether they were satisfied with the communication, quality of work and other critical factors. It is also reasonable to clarify all the issues in the first inquiry even before sending any software product information.
Frequent meetings with customers, regular reports and correspondence with deadlines are positive signs indicating that an IT service vendor is reliable. In addition, you should request access to task management and time tracking systems to monitor project performance.
If you aim to create an online marketplace while ensuring security, high availability and scalability, contact software experts at Arateg. The company has already delivered dozens of marketplace apps and websites helping clients achieve their business objectives.