Software Development Outsourcing: Everything You Need to Know

Software Development Outsourcing

Digitization has been a key driver for businesses in the last few decades. Companies focus on developing applications to simplify business operations and improve customer experiences. However, keeping an in-house software development team may not be possible for every business. That’s why software development outsourcing has seen significant growth in the last couple of decades.

Companies outsource software development for two primary reasons – cost control and speed. They can keep the software development cost within the budget and build effective solutions within a short time. Besides, outsourcing software development has other advantages such as improved efficiency, mitigated risk, and enhanced security. Both established companies and startups are outsourcing their software development work.

Are you yet to take advantage of this opportunity? There may be questions in your mind. Knowing all the details about outsourcing is essential for making the next move. Let’s take a closer look at software outsourcing and understand how it will benefit your business.

What is software development outsourcing?

Software development outsourcing means hiring a third-party service provider to handle software development projects. The services can range from developing software for your company to managing business operations or developing and maintaining software for your customers. Businesses can do it in-house, but it requires skilled developers and other resources, which increases the cost and time to complete the project. Outsourcing is an excellent way to build software solutions for startups and established companies that don't have an extended software development team. It's a common practice across industries. According to a Statista report, software development is one of the most common outsourced IT functions.

Advantages of software development outsourcing

Setting up or expanding a software development infrastructure involves hiring developers and renting additional space that incurs a high cost to a business, especially for startups. Outsourcing the development work to a software development company is more cost-effective than keeping an in-house team.

Let’s look at the top advantages of outsourcing software development.

Access to the global talent pool.

One of the biggest problems you face while hiring in-house software developers is access to limited talents in your location. Outsourcing enables you to choose from the best software engineers around the globe. You can hire a software development company in another country and get the job done without compromising on quality. When you outsource software development work, you should check the company’s portfolio and customer reviews to get an idea about the company. Another advantage is their flexible model, making it easier to start the project immediately.

Focus on core business.

Unless you are running a software development business, it is not easy to build infrastructure, hire developers, and manage a separate software development team. This process consumes a considerable amount of time. If you have an in-house software engineering team, handling more tasks or projects that are out of their scope is challenging.

Outsourcing software development work allows you to focus more on your core business. Imagine you are running an e-commerce business and need to develop new software. Isn't it beneficial to outsource the work to a software development company while concentrating on attracting more customers and growing your business?

Cost efficiency.

Cost efficiency is another reason why companies outsource software development. Creating an in-house development team requires hiring developers, purchasing hardware, development tools, and related overhead expenditure. You also have to invest to train and manage another team. In short, you need to build a complete infrastructure for software development which requires an upfront investment. Outsourcing the work to a software development company can minimize the upfront cost significantly.

You can explore outsourcing options outside the U.S.A. and hire developers from India, Brazil, or Eastern European countries. These places are the best-known software outsourcing hubs; you can hire highly talented developers. Software development companies in these countries have a reputation for delivering high-quality products at considerably lower costs.

Faster time to market.

Hiring reputed software outsourcing companies allows you to employ highly skilled and experienced developers for your project. As software development is their core competency, they can work round the clock to complete the project on time. A top outsourcing software company does the job with complete efficiency and often completes the project before the deadline ensuring a faster turnaround time to market the product.

No need for micromanagement.

With your development team, you always need to manage things such as reviewing the progress, absenteeism, reminding the employees about their duties, etc. It results in employees focussing more on reporting than doing their job. When you hire a software development company, you mostly get in touch with the project manager who takes care of everything related to your project. Once you discuss and approve the project plan and budget, it's the project manager's job to take care of everything, and you don't need to micromanage things.

Easy scalability.

You may realize the need to scale up the software capacity during project development. If it happens, you may need to grow the team size which is difficult with in-house development teams. You may not be able to hire a developer with the required skill in a short time. Scalability is never an issue when you outsource. A software development company usually has sufficient staff to cover such needs. When the project needs someone with unique skills, they can hire an experienced freelancer with the required skills.

Leverage the latest technology.

Technology is changing rapidly, which demands businesses to keep up with the latest trends. It can be challenging for a company not involved in the software development business. When you outsource the task to a software development company, you can avoid these problems and leverage the expertise of the best minds from different parts of the world to get innovative software solutions.

5 factors to consider before outsourcing software development

Identify your requirements

The first question you need to ask before hiring a software development outsourcing company is, “What exactly does my organization need?” The lack of clear goals is one of the top reasons for the failure of a software development project. You can overcome the problem when you are clear about the requirements. Outlining your project goals and objectives helps the client understand your requirements better and suggest the right solution.

Look for a suitable a provider

Once you identify your requirements, the next step is to find the right software development company for your project. When you outsource, you have the flexibility to choose a provider according to your needs. Here are the factors to consider while looking for software development outsourcing companies.

  • Experience: Before hiring a development company, try to find out how long the company has been in operation and the projects they have worked on. Experience is crucial as you want someone with high proficiency to manage your project.

  • Customers' review: Look at customer reviews to know the company's work quality; a reputable company ensures excellent service that reflects in their customer reviews.

Consider the budget

One of the reasons why companies outsource software development is the budget. Whatever the reason behind outsourcing, you must consider the budget before you start searching for a software development company. Make sure not to compromise on the work quality.

Understand the company culture

Cultural difference is one of the barriers to outsourcing a software project. Every company has its culture and values. When you want to outsource your work to another company, ensure its culture does not go against your values. To understand the work culture of a company, check their social media or visit their office if possible to get an idea of their corporate culture.

Check the security policies

One of the most important things to consider while outsourcing software development is to evaluate the security policies. You share sensitive information with another organization which can pose cybersecurity risks for you and your customers. Check their security protocols before signing the contracts and ensure the company you are considering doesn’t have a history of a data breach.


Outsourcing software development is convenient for businesses that don't want to employ an in-house development team. Besides saving costs, it also saves time and allows you to leverage the latest technologies. However, finding the right software development company is not easy, but investing time in researching and having a defined outsourcing strategy can help you find the right fit for your business.

On the other hand, hiring a remote development team is a better option for companies that need regular software development. Partnering with a top developer sourcing platform is the easiest way to build your dream developer team.

Turing has been helping businesses find Silicon Valley-caliber developers; many Fortune 500 companies and fast-scaling startups have chosen Turing to hire the best remote developers. Join hands with Turing to hire pre-vetted developers within 3-5 days.


  • Author

    Subhasish Dutta

    Subhasish is a science graduate but a passionate writer and wordsmith who writes website content, blogs, articles, and social media content on technologies, equity market, traveling, and other domains. He has worked with Affnosys and FTI Technologies as a content writer.

Frequently Asked Questions

Outsourcing software development is a cost-effective and efficient way to develop software. Other benefits of outsourcing software development are:

  • Access to the global talent pool of developers

  • No need to manage an in-house development team

  • Optimal balance of skills and cost

  • Ability to hire the best professional team for the project

  • Finding an expert developer according to your business requirements

  • No need for micromanagement

  • Easy scalability

Finding the right software developer to outsource your project is a multifaceted process. The first step is identifying your requirements and searching for the best developer for your project. Look for developers in top talent-sourcing platforms. The next steps involve shortlisting freelance developers and interviewing them to find the perfect developer for your project.

Make sure your partnering software development team is right for your business. Here are some things to look for:

  • Recommendations from trusted sources

  • Clear communication and understanding of the project

  • High-quality code

  • Complete transparency

  • Highly skilled professionals

View more FAQs


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