Skip to content
Home » Software Development Outsourcing: Facts You Absolutely Need to Know

Software Development Outsourcing: Facts You Absolutely Need to Know

Sonatafy Technology, providing experienced nearshore software developers and engineers. Once an identified error is fixed, developers then forward the software back to the QA team for re-testing. No matter how complex a software product is, it needs to be flexible and easy to maintain and upgrade. You can achieve it by planning each step in advance, from brainstorming to maintenance.

outsourcing software development meaning

One-third of the skills needed for tech jobs in 2017 are now obsolete, and the average tech position requires workers to increase their skills 10% each year. Even if you have a fully staffed development team, they may not have the specialized skills they need to keep pace with the newest technologies. As current employees, they’re also already familiar with the problems you’re trying to solve with your software build. Whether you’re developing software as a product or to make your internal workflow more efficient, an in-house team understands what you need from your software. Navigating software outsourcing is not easy, luckily there are tons of services available to you to help you through the process. NDA, a non-disclosure agreement is often used to finalize terms and conditions between two parties.

The Real Definition Of What Software Outsourcing Is

The dedicated team model presents outsourced talent which has more responsibility for overseeing the project. Our Delivery Teams thus provide management structure, allocating specific tasks and monitoring workflow. In this way, you benefit from the expertise of highly-skilled developers who provide a specific service.

  • This can make communication difficult, especially if the time difference is significant, like a company based in Los Angeles offshoring to India with a 12-hour time difference between them.
  • Let’s find out what’s the difference between them and when it’s better to use one over another.
  • If your desired project development is designed long-term then it is reasonable to build an in-house development team.
  • One of the biggest security breaches in recent history, the Equifax breach, happened because an open-source code vulnerability wasn’t patched.

It is also a good option since it doesn’t need as much time to grasp the subtleties of a new member of the team. Often the biggest savings is obtained by using software developers from other countries, where it costs less to hire them. However, this often leads to problems with communication and collaboration. If your software team is working while the rest of your company is sleeping, you’ll miss out on the opportunity for real-time collaboration, which can significantly slow the progress of your project. Developing a software application either can be handled by a team employed by your company, or you can hire outside developers to do it.

Need to source and hire remote software developers?

It helps startups and large-scale businesses alike to stay competitive in the market while being cost-effective. Factors such as taxes or the cost of office space vary from country to country. As a result, outsourcing the software development process to certain destinations may cost you a fortune. For example, while an average software developer in the US earns $77K annually, their colleague from India makes on average 11 times less.

More and more companies are taking advantage of the Internet of Things to operate more efficiently, gain a deep understanding of their customers’ buying patterns, and increase the value of the business. Smart cities, telemetrics, sensor networks, traffic analysis, and industrial monitoring are all part of the current IoT revolution. Outsourcing development helps companies achieve their vision by outsourcing outsourcing software development meaning skills they are lacking in-house. Andy is a technology & marketing leader who has delivered award-winning and world-first experiences. And once you accept the final results of the work, the contract with the outsourced company is fully realized. Along with errors due to miscommunication, adherence to quality standards can be an issue if you’re a non-tech firm without significant coding expertise.

Mobile App Development

Reducing cost is a common reason to outsource, but it’s not the only good reason to do so — don’t limit yourself to searching for a vendor based solely on price. The use of advanced technologies, streamlined processes, and reduced risk of business expansion are other benefits of outsourcing. With software development outsourcing, you can avoid these problems because the agency usually has sufficient staff to cover your project needs. And when unique skills are required, they can contract a part-time team member hourly as needed.

outsourcing software development meaning

Also, augmenting the temporary capacity of an organization with full time highly qualified, and highly paid developers is not a wise choice. Next, we are going to detail a few software outsourcing examples to see how these pros and cons apply in real life examples of companies who strategically decided to leverage software outsourcing. There you have it, an in-depth and eye-opening guide for software outsourcing. Follow the strategies and steps given above to streamline your selection process and expedite your project development. Mphasis transforms enterprises through its proprietary FRONT2BACK framework which prioritizes a customer-first perspective.

Custom Software Development

The challenges of managing an offshore development team elevate the risk of missing the target. If your engagement with an offshore team creates the risk of failing to meet the desired objectives, it is best to seek another alternative that grants you more control over the project. By offshoring your software development, you can significantly reduce your overall production costs by taking advantage of the host country’s usually welcoming tax policies and breaks. This is helpful as by using AI, an offshore developer can build a high-quality software product in record time. By offshoring the web development process, you can ensure your site is always functioning at its peak. You can take further advantage of time zone differences to take care of any user-reported bugs during off times.

App development is the cornerstone of most companies these days, especially e-commerce stores. But the geographic and cultural distance between you and your offshore company can make collaboration difficult if not dealt with adequately from the beginning. For more information, read our detailed comparison of offshoring vs. outsourcing. Outsourcing is the optimal solution to any IT and business problem related to in-house productivity or capabilities.

How to Hire a Successful Remote Software Development Team

For example, the Glassdoor team has found out that the US companies spend on average $4,000 and 24 days just to find and hire a new employee for an in-house team. Meanwhile, Gallup has estimated that the total employee turnover cost makes ½ to 2 times of the employees’ annual salary. This allows its clients to take advantage of the technical expertise and lower costs offered by its offshore team, while still maintaining close relationships with its onshore team. One of the key reasons why Binmile is a great option for software outsourcing is its Global Delivery Model. With offices located in India, the USA, the UK, and Indonesia, Binmile offers its clients the best of both worlds with its unique Global Delivery Model – local presence and cost-effectiveness. Not every aspect of the project needs to be handed over to an external team, outsource those that just need the expertise you lack and if you lack enough team members to work on certain points in a project.

outsourcing software development meaning

An IT outsourcing provider has the resources and expertise to start new projects immediately. By delegating software projects to external specialists, you concentrate on your core business tasks such as production, sales, or marketing. For example, instead of spending time and resources on programming, you can focus on identifying new markets, developing products and services, or improving customer support.


Both established companies and startups alike are using software outsourcing to develop their products. They have 10+ years of experienced software developers in various domains. Throughout this period, which can range from several months to a couple of years, productivity very often takes a nosedive.

Leave a Reply

Your email address will not be published. Required fields are marked *