Outsourcing Software Development - Benefits Beyond Time and Cost

Gimena Aguerreberry
August 30, 2021

Amid the pandemic, many companies started to take digital transformation far more seriously. But, as many found, the adoption of new technologies is often accompanied by rising costs.

Outsourcing software development can address many of the main issues that a rapid transformation implies: cost-optimization, scalability, flexibility, and agility.

Despite the disputes about how and when to outsource software development and if it’s really worth the effort, during 2020, the IT outsourcing market size amounted to around $188.9 billion. So, is outsourcing something not worth your attention, or is it a huge opportunity you are not taking full advantage of?

As recent stats show, the demand for hiring offshore software developers is on the rise as more and more businesses reap advantages from software outsourcing. But as the demand for technology talent increases, the pool within some geographic areas appears to be shrinking fast. Companies are finding themselves in need of good talent that isn't always available internally.

So, while software outsourcing is still about optimization, the approach to outsourcing work has changed. Earlier cost savings was the most widespread reason for taking advantage of outsourcing. Now, access to global talent is emerging as a prime reason for looking for an outsourcing partner.

Identify the Gap

Every organization has a gap that it seeks to fulfill through outsourcing. This could be a short-term gap or a long-term one, a project requirement, or a technology gap to fill in for a client project. Different organizations have different requirements.

Full Team Needs

When you do not have a technical house team for software or product development, then outsourcing is your safest bet. Getting the infrastructure, hardware/software, and hiring a full team comprising developers, QA specialists, UI/UX designers, testers, project managers, and others could greatly exceed your budget.

Managed Team

Many organizations have projects in the pipeline and need an expert team. However, they do not have the time or the managerial staff required to manage the entire team. The best choice, in this case, is a fully managed team that can take care of their project as an in-house team.

Product Development

When your organization needs to hand over a complete software project completely to an external company, you’ll need a trusted vendor to build the software from scratch and manage it until it scales.

Small Project

Sometimes, organizations might need the development company to work on a particular module of their existing software or to develop a smaller product.

Depending on your situation, you might just need a single remote developer for your in-house team or you might need a complete team of all the developers, testers, designers, and everyone to turn your software idea into a reality.

Why Opt For Software Engineering Outsourcing?

1. Cost-optimization

One of the most significant benefits of outsourcing is cost-optimization. Companies can save up to 30% of their budgets by going for software development outsourcing. The primary reason for it is the difference between the cost of living in different countries and, as a result, rates.

Your software engineering partner is responsible for all HR, administration, and infrastructure processes, which also helps you to reduce costs.

2. Access to a vast talent pool

The shortage of talent in the USA and Europe is a pressing problem. Talent from major outsourcing destinations can help you fill in the gaps in the teams without sacrificing quality by settling for professionals with less experience or expertise.

What’s more, software engineering outsourcing allows hiring software engineers with specific skill sets on an hourly basis if you do not need these professionals full-time.

3. Flexibility and scalability

Software engineering outsourcing allows scaling your team according to your needs and requirements, changing the scope of your project when it is necessary, and having as much control over the project as you want to.

As we mentioned before, there are different engagement models for building a team, and every model has its peculiarities and suits different aims, which should be taken into consideration.

  1. Faster time-to-market

Outsourcing software development is a way to achieve faster time-to-market and avoid postponements. When you partner with a software engineering outsourcing company, you entrust the recruitment processes to them and do not depend on the in-house resources for the product launch. You create the schedule your developers need to adhere to.

5. Easier technology adoption

Implementation of new technologies gets easier if you partner with a software development outsourcing company, as trusted software engineering outsourcing companies have broad expertise and an internal pool of skilled specialists.

Outsource Software Development Successfully


Write down a complete document on your project requirements. Keeping a tab of all the features on paper will give you clarity. When you talk to potential outsourcing companies, this will help there too as they can easily get an overall picture of the software at one glance.

Also remember, software development costs money. If you have a written document of all the features and the flow ready, it would be easier for the software outsourcing company to come up with an accurate estimate, both in terms of money and time.

Due diligence

Once you know what you need, you need to find a software development company that can help you. You may start with your search in directory sites like Clutch or Goodfirms.

Once you shortlist 4 or 5 companies, go through their website, and their portfolios to see what kind of projects they’ve worked on.

Ask for references

While buying a simple product from an online store, we run exhaustive research on what other people are saying about that product. So, why not do the same when you need to develop software.

Ask your potential software companies for past and present client references. Remember this: If someone has completed quality software projects for other companies within scheduled budget and time, chances are they will complete yours too. References also help build trust with the software development team.

Set clear expectations and communicate

Your software development company needs to completely understand your business requirements. Tell them what you want and let them come back to you with questions if any.

We are sophilabs

A software design and development agency that helps companies build and grow products by delivering high-quality software through agile practices and perfectionist teams.

"Outsourcing Software Development - Benefits Beyond Time and Cost" by Gimena Aguerreberry is licensed under CC BY SA. Source code examples are licensed under MIT.

Photo by Anthony Rivera

Categorized under software development.