Outsourcing Software Development

Outsourcing Software Development: How To Outsource Software Development Effectively?

Over the last few decades, outsourcing software development has experienced tremendous growth.

According to the studies, giant organizations have expanded their outsourcing IT budgets spent from 6.3% to 8.7%. Along with that, SMB’s increased its budget proportion for outsourcing from 4.7% to 6.5%. Because software development outsourcing helps companies reduce costs and product delivery turnaround time dramatically.

However, the principal factor that drives companies to chose outsourcing has been changed to product quality than cost reduction. Besides, before outsourcing a project, you have to peer through many factors to get it right. We must understand outsourcing deeply, so in this article, let’s walk through every aspect of software development outsourcing.

What is Software Outsourcing?

Software outsourcing development can be defined as an arrangement in which a firm chooses to hire an efficient outside development team who are capable of delivering their project effectively. It is about the practice of handing over the control of a business to a third-party to develop the software precisely.

In software outsourcing, a company hires specialized third-party vendors to handle their software projects.  Usually, these projects can range from developing custom software to developing commercial software products for your clients.

One of the significant benefits is that the internal IT team can focus on more complicated things like innovation and growth.

Why is Outsourcing a feasible business model?

The primary benefit of outsourcing is cost-effective; offshore software outsourcing helps to reduce development costs, which fundamentally translates to lower market price and amplifies competition.

In the present scenario, business firms should adopt multiple strategies to stay competitive and to increase productivity. Outsourcing is one of the strategies used by managers to keep their business flourishing.

Pros of software outsourcing

Reduced operating expenses

Cost reduction is the primary benefit of outsourcing development.  Minimizing expenses is one of the surest ways for any business to grow. But we should be concerned that it is not about hiring the cheapest software developer; on the other hand, we should look for ways to find a quality between quality and affordability.

While outsourcing, you don’t have to bother about buying equipment and other supplies that can minimize the cost. Offshore software developers always offer these services at a reasonable price.


While outsourcing, business owners get the opportunity to hire an outsourcing company only when it is needed. This can help you tackle situations if the business hits a low position or works on a short budget project.  It is far cheaper than hiring an in-house developer or facing problems like hiring and firing employees all year round. Outsourcing can help to simplify all these headaches. To maintain the quality of your work, seek an expert outsourcing firm for each project.

Exposure to new talent

By outsourcing some projects to software professionals, the business owners get time to access new talents. When you have access to expert developers worldwide, you have an easier time integrating, implementing new projects, and designing.

Focus on core business processes

In circumstances where your employees are overloaded with tedious tasks, software outsourcing can help to manage software developments so that your employees can focus on the core areas. They can access this time on things like content management, marketing, and other essential areas.

Downsize the business by outsourcing services

With the help of outsourcing, you can expand, downsize, or even re-prioritize different areas of your business without affecting the core areas. Make sure that security policies, existing business laws, etc., are not rejected.


Outsourcing can be beneficial if you are working within a tight deadline. Sometimes your project may need more hands to complete the project. Hiring technical hands that stay updated on technical innovations can you to handle this situation. Also, provide your staff with a platform to always stay upgraded with technology. So outsourcing can magnify productivity without affecting quality.

The drawbacks of software outsourcing

Quality mark of service

There are chances of experiencing a low performance from the developer, mainly when charging lower rates than the current market prices. You can conduct a sort of test to measure their skills and also provide fair charges.


Language and cultural barrier is another thing that should be concerned about. The communication gap can reflect the quality of the work. To avoid this, conduct regular meetings and understand their workflows.


There are some risks involved when outsourcing. Be careful when outsourcing a confidential project to third-parties; there are chances for leaks in their database.

How to outsource software projects effectively?

Generally, the quality of your outsourced project depends on the company you have decided to work with. If you choose an efficient firm, many of the arising challenges will be reduced.

There are some common mistakes that most companies make while outsourcing; let’s see how to outsource effectively:

Make a list of your candidates

It would help if you always worked with the best team to reap greater success. So, first of all, make a list of five-six candidates from your office and begin the process by vetting each one of them. Seek them, like those who have good knowledge of software and find out if they can recommend a specific company. In this case, there is someone from your side who knows the outsourcing people personally.

If this doesn’t work out well, don’t worry! There are possibly many other ways.

Conduct an organic search to reach out for expert outsourcing partners. Look out for reputable companies and note 5-10 companies in a spreadsheet.

Note down the below details for each one of them;

  • Company names
  • Price each company offer
  • Solution you are seeking and details of their proposal
  • Your initial evaluation for each is a firm based on the information you gather.

Sorting in this way can help you to save time and also to evaluate each agency to help you find a suitable one.

Check the agency’s reputation

Once your list is ready, conduct a Google search by examining what people say about the firm. Confirm that you make final judgments concerning authoritative sources and not fake ones.

See whether your outsourcing firm is financially stable

Always try to work with financially stable companies. Marketing campaigns cost a lot of money, and a lack of marketing effort can be a sign that the company is not getting much revenue. Look out for companies that run affiliate programs or sponsored programs and focus on social media on how well they [perform.

The significant number of followers and how frequently they post on social media platforms are different criteria to judge them.

Learn the cultural basics

Check if the cultural variations can affect the quality of your project. General educational levels of people in that particular country, social background etc are things that should be considered of. Also the deadline for your project should not be affected by their holidays. When outsourcing with clients from abroad, schedule the work properly without any hindrances affecting your work.

Ask to see the products they have developed in the past

Previous works are a mirror of their skills. Ask them to provide their previous work samples and take time to evaluate their work.   Going through their works will help you to have a pretty idea of what they can do for you.

Meet the agency representatives in person

It would be ideal to meet the manager or CEO of the firm in person. You can take time to share your ideas and ask as many questions as need to. Meeting in person will also enable you to understand whether they are using the latest technology and hardware, meet the developers who will be working for you etc.

If you find the manager is not exposed to your needs, you could probably move to option B , rather than shouldering a risk.

To sum up

Before outsourcing, consider all these factors, take time to examine their work. The more time you take to analyze them, the chances will be high for you always to hire an expert team.

Lastly, read the contract carefully, make changes if anything doesn’t fit for you.

Hope you will find a perfect outsourcing agency that will fit your requirements in the most significant way.

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