Full Guide To Software Development Outsourcing

Software Outsourcing

After modern businesses decided to break new grounds in the form of websites and applications, software development became a big cheese. As of now, there are more than 525,000 software development companies in the US alone. This is why the need to recruit more software developers is getting dire day by day. However, since not everyone possesses suitable skills, hiring internal software developers can be daunting. That’s where the significance of outsourcing Software Development enters into play.

Simply put, Software development outsourcing is a trending practice as per which businesses choose external IT outsourcing companies to carry out the technical tasks. As it is about handing over the project’s control to a third party, businesses entail being quite careful when hiring an external software developer for outsourcing. Only that’s when the management of business aspects such as time, cost, customer service, and growth will be apt. To make this possible, we have covered all the ins and outs of outsourcing software development.

What is Software Outsourcing?

Outsourcing definition implies the exercise in which the company delegates the software development project to third-party vendors. Today, many small and large firms hire external human resources to accomplish their information technology functions with utter proficiency and effectiveness. The best part about the concept of software development outsourcing is that it lets various professionals collaborate, work, and grow together.

The key factors that drive the companies to outsource their project are reduced business costs, access to world-class capabilities, saving time on finding and hiring local specialists, increased flexibility and scalability, and reduction in risks.


Advantages and Disadvantages of Outsourcing

Needless to say, outsourcing is the key solution to allocate the responsibility of a project that is not possible to be completed within the internal range of a company. However, as it is said, ‘There are always two sides of a story,’ outsourcing software development possesses both pros and cons that need to be considered before choosing an IT outsourcing company.

Advantages Of Outsourcing

  • Enhanced Expertise – One of the major reasons behind collaborating with outsourcing companies is harnessing the expertise of vendors who are specialized in the field. Moreover, in most cases, specialized external developers also own state-of-the-art equipment and tools that aren’t available in the organization. Ultimately, all this helps in the effective completion of software projects.
  • Bigger Talent Pool – Another plus point of outsourcing development is wider reach to talent and top-notch technological resources. With this being the reason, a company can opt for the most suitable talent for their organizational functions.
  • Cost Reduction – Outsourcing helps to save at least 60% of the in-house team budget of an organization. This is why many bigger organizations plump for external employees that help them provide quality work at less price.
  • Flexible Payment Methods – Unlike internal team members, organizations do not need to pay within a specific duration. Based on the amount of work done and the duration of the project, they can choose comfortable payment terms for the best of organizations. Opting for hourly rates is one of the common approaches that companies prefer the most.
  • Additional Advantages – In addition to the aforesaid, there are various other benefits of outsourcing software development that help companies be on the crest of waves. These are faster turnaround, ample engagement models, reduced time-to-market, flexibility, scalability, risk-sharing, and more concentration towards core processes.

Disadvantages Of Outsourcing

  • Risk Of Data Security – In most cases, companies have to face a threat of data security. This holds especially true when they have to share any confidential information with the IT outsourcing company regarding the project or company itself.
  • Hidden Costs – No doubt, outsourced software development projects are generally cost-effective. However, sometimes there is a hidden cost that the company has to bear when signing a contract. Secondly, choosing outsourcing services across the boundaries is often cost-ineffective for the organization.
  • The difference in Distances and Time Zone – Another major con of outsourcing a crucial project is mismanagement of distance and time zone differences, especially when an outsourcing company is located in another country. Not only this brings a gap in communication, but it also emerges the chances of misunderstandings.
  • Cultural and Language Disparities – A business alliance is often ineffective when there are cultural and language barriers between two collaborators. Choosing an outsourcing company that is either located in a different state or country usually leads to this problem.
  • Troubles In Delegation – The biggest threat when working with an external specialist is a trust issue. As a consequence, there is always a problem in delegating the bigger responsibility that holds utter value for an organization. This is why it is said to be careful and patient when selecting outsourcing resources.

Best Example of Software Outsourcing?

A few examples of well-known companies that hire externally qualified workers for their technical projects instead of local employees are Apple, Skype, Basecamp, and more. Mostly, China is a primary source to get complete with outsourced software development projects.

Apple – Apple, the iconic Internal brand known for its iPhone, iPad, iWatch, and other pieces of technology, often delegates a substantial part of technical functions to China’s manufacturing companies. Though the company has been criticized for ignoring the local talent, the benefits of outsourcing such as time-saving, quality results, and cost-effectiveness are making it stick to the practice.

Skype – Skype is well-known as a communication and collaboration application. In the initial days, it outsourced its entire back-end part of the project to the three Estonian developers, who later became the partner of the company.

Basecamp – Basecamp is a web development tool that is highly in demand today for its features to handle the project development of several business companies. As the operations of the company grew, the owner and team outsourced their web development project to remote developers, as a result of which, they are enjoying a whopping revenue at present.

How to Choose Best Outsourcing Models for Your Project?

The concept of outsourcing development is quite extensive and is categorized into three different models, namely Dedicated Teams, Project-based outsourcing, and Staff Augmentation. Before understanding the factors to choose the best outsourcing development model, let’s understand its three different types.

Dedicated TeamOutsourcing definition for dedication team model implies that highly skilled team of developers are 100% allocated to the project and work independently under the guidance of an outsourced project manager.When there is an experienced project manager in-house.When one needs expertise in a specific area.When the company wishes to be the upfront of decision-making.
Project-Based OutsourcingProject-based outsourcing is when an outsourced development project is fully managed by an outsourcing partner.When the project is simple and straightforward.When an outsourcing company has a clear idea of a product.When outsourced products are not core products of the organization.
Staff AugmentationIt refers to integrating the qualified external developers into an in-house team to maximize efficiency and have full control over the project.When an in-house team is already proficient.When there is a need for specific expertise.When the aim is to speed up the execution of the in-house team.

Now that the three distinguished models for outsourcing software development are clear and transparent, the next approach on how to outsource software development is considering key factors to choose the best outsourcing development model.

These comprise primary business requirements or goals, level of flexibility required level of in-house team’s expertise, and amount of time that needs to be devoted to outsourcing partners. Additionally, the most vital attribute that should be kept in mind is the amount of control that an organization wishes to possess on the project and associated decision-making.

How to Outsource Software Development

Once an organization selects an appropriate model for its outsourcing software project, the next question that strikes the mind is how to outsource software development. Below-mentioned is important steps that a business should follow to make this possible. Check-out.

Evaluate project Needs

The first and foremost is to evaluate the needs of the project. A company should be sure about which project can be completed with outsourcing software development. Moreover, They should mull over the problem that outsourcing partners can easily solve with expertise and proficiency.

Choose The Target Outsourcing Location

The selection of outsourcing companies’ locations plays a major role in the efficiency of the project. Based upon the budget, time zone differences, distance differences, and requirements for qualified experts, outsourcing partners can be chosen either in the same region or outside of the region.

Research About Outsourcing Software Companies

The most important stage in outsourcing software development projects is to research extensively about outsourcing companies. Subsequently, have a squint at their websites, customer reviews, and the service that they offer.

If everything matches your project’s goals, get in touch with them and plan a face-to-face meeting for efficacious communication. Complete the procedure by estimating the cost and duration of the project. Lastly, based upon the comparison among several vendors, choose one that best fits the needs of the business.

Pro tip: The companies in need of outsourcing development specialists can also harness the significant platforms that allow finding the right talent on the bench. Onbench is one such impeccable example that presents the recommendations of various developers and specialized IT outsourcing companies that can be the best outsourcing partner. All you have to do is come with a project idea and proposal.

Choose The Outsourcing Model

After selecting the right outsourcing partner, the next step is to opt for the finest outsourcing software development model out of Project-based, Dedicated Team, and Staff Augmentation. Keep in mind the important factors such as requirements, budget, payment plan methods to make the right decision.

Judge The Employees

Monitoring the skills and competency of outsourced employees is significant to ensure the prominence of the project. The company ought to take a careful interview, especially when the outsourced team is selected from scratch. They can also assign a test task to determine their abilities, strengths, and weaknesses.

Make Them Comfortable With In-House Team, and Starting Working

Furthermore, it is recommended to make the selected outsourcing software development employees feel friendly with an in-house team. This can be done by opening new communication channels and setting a positive work environment. Once everything seems fit and fine, the company can start working with software development outsourcing partners. Make sure to encourage them in between.


It is beyond the shadow of a doubt that software development outsourcing is key to expand the business and makes its IT aspects stronger than ever before. Interestingly, the presence of various IT outsourcing companies in the world is bringing a scope of improvements in the technical aspects. Thus, modern organizations should be all set to grab the golden opportunity of making their outsourcing software project hit the jackpot.

Still in doubt on how to outsource software development? Visit Onbench to explore and select the suitable outsourcing companies or employees for the best of your project. Shoot!

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