Pros And Cons Of Software Development Outsourcing

Also, you can lay out strong, explicit guidelines with plenty of documentation prior to kickstarting a project . You only have a narrow window of quick and efficient communication that can occur in your working day if you are partnered with a team overseas, so maximizing it is critical. It is crucial you create as much overlap as you can have with your engineering team in a different time zone. You can’t just hire any company in the market – you need to make sure first that it is professional and reliable.

Central and Eastern Europe is also in the rise when it comes to outsourcing – although China, India, and the Philippines are still the leaders, Poland, Ukraine, Romania, and Bulgaria are the next hot spots. Due to domestic talent shortages in the US, Western Europe, and Australia, outsourcing allows companies to fill gaps in their teams without having to sacrifice quality by settling for developers with less experience or expertise. It also allows organizations to leverage fractional skill sets they may not have the ability or need to hire full time. Preparations may be tedious at times, but the outcome should come close to meeting your expectations, especially when you choose to hand over the work to agile teams.

Such teams are available to the clients, so they can get to meet people involved in the project, as well as evaluate the effects of their work, including specific team members, thanks to hourly reports. Recruiting, learning to cooperate in a team of local developers, takes time and requires attention that an agency can devote to product development. Developers in a software house follow the company’s processes and have already implemented at least a few projects together, so they can immediately start working efficiently.

  • You may encounter a lack of market awareness when you outsource design and engineering projects to remote freelancers in different countries, but this should really only be a minor factor.
  • The vast majority of the time, outsourcing is not designed to replace in-house employees but is used in parallel with ramping up headcount internally.
  • Yet, the IT sourcing industry’s rapid growth doesn’t mean that it’s the right choice for you.
  • Especially when there is a severe time difference between the customer and the contractor, without proper communication channels and a well-functioning method of cooperation, the effectiveness of work on a project can suffer.
  • The software development market is an ever-expanding one with thousands of developers worldwide.
  • This hour difference is appropriate if the 2 teams need to plan things together and share knowledge more often.

You’ll also be responsible for significant overheads like training, paid vacations, employment taxes, and acquiring computer equipment for heavy-duty programming, development and designing tools and many more. So all your developers will work round the clock, hand-in-hand to deliver what you hired them for. You will have all your developers in one place – exactly where you need them, right inside your company. If you’re not careful enough, you may end up outsourcing your project to the wrong company. Sometimes,choosing the right IT companyto outsource can be very tricky. Outsourcing makes it easier for you to get more free time to focus on other aspects of the software other than development.

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It is usually done through a contractual agreement, where the requirements are conveyed to the outsourcing agency. Successful companies are driven by a high-spirited team that embodies the company’s core values. With in-house development, you have the opportunity to pick team members that align with the startup’s culture. When a team operates in synergy, you’ll achieve better results, which is something you’ll miss when outsourcing your project. In-house software development means leveraging company resources to develop or implement software according to specific company requirements. This involves the lengthy process of job posting, interviewing, and hiring suitable candidates.

In some cases, combining both will deliver the most benefits. As I’ve mentioned, you’ll need to find the right vendor to work with. Now, let’s say you need inventory/warehouse management software to help you automate business processes. But your business doesn’t revolve around this, and once you have the software, you won’t need daily maintenance.

Company Morale

Henry Ford, who was one of the greatest industrialists in history, perfectly captures the essence of outsourcing. It involves delegating certain tasks, projects or processes to external entities. There are several types of outsourcing, including offshoring and nearshoring. In this article we will focus mainly on the description of the second idea, but also briefly explain what offshoring is.

He is passionate about everything that concerns technology, ranging between advertising, smartphones, computers, Cryptos, and NFTs. For sure, there is more coffee than water in his veins but still thinks that calm is the virtue of the strong. If you are struggling to try to understand what to do next, it’s probably because you are lacking tech expertise, and this is also what might lead to a failure. It’s a good idea to ask an agency about how they protect against IP theft. It’s also smart to only give them as much access to your sensitive material that they need to get the job done. That might mean limiting the data they can see or their ability to add code to your application.

Also, you need this software quickly, and you don’t want to spend too much on it. It is best to outsource this to some capable software outsourcing company. Now that we have a brief idea of ​​outsourcing versus in-house software development let’s look at both approaches’ pros and cons.

Let’s Try Outsourcing

This is especially true if you offshore your software operation in another country. Keep in mind, the workflow will be something that will improve over time. Ideally, it’s good to be flexible with every phase of the project. To avoid this, make sure to read reviews or feedback about each vendor before hiring them. Explain the penalties or legal repercussions involved once this agreement is breached. In addtion, include intellectual property rights in the agreement to safeguard your company against possible copyright infringement cases.

Essentially, an outsourcing vendor calculates the project’s total cost and divides them into monthly bills. Unlike when you outsource, you don’t have to give any access to anyone outside your company, including access to your servers, mobile apps, portals and any other software you’re working on. Outsourcing allows you to hire only the best for your project without bothering about overheads and the cost of setting up a workstation. When you outsource to an IT firm like ours, you’ll not only get the software you want, you’ll also get an analysis of your current business position in order to figure out what can be automated with software solutions to deliver better results. Outsourcing gives you a huge opportunity to hire only the best developers for your job onshore or offshore.


All your company’s resources are restricted to yourself, and no external organization has access to them. Via an external software contractor to do the work related to the software rather than in-house. Due to the high volatility of the cryptocurrency market, a trading company faced with an issue that traders need to quickly analyze cryptocurrency market information. PoolParty app allows increasing your popularity on Instagram by sharing links to the community of users, that will like, share and follow such links. Tamam on-demand mobile application connects customers with independent local couriers, who acquire goods from any restaurant or shop in a city and also deliver urgent packages for a variable…

2) Protect your product and intellectual property – there are various of companies burned out by an avenging sysadmin who got fired, but sharing everything you got offshore should happen carefully. Don’t throw that advantage out the window by outsourcing your core development. Large companies have long decision making processes, need time to align everybody on a new direction, often have heavier planning processes that require some kind of formal sign-off etc. As a startup, you can make quick decisions and change course in a matter of days.

And, no less important, whether it can live up to your expectations. For instance, meet deadlines, create a properly functioning product, solve any issues that may arise. After all, there are companies that have experience in rapid development. Such providers usually have seasoned developers in the stack you need almost immediately. It’s usually a cheaper way to access new expertise than the previous one. Check out reviews and company ratings and get as many recommendations as you can from within your industry.

Outsourcing means the ability to work with highly qualified specialists not only from the city or country in which the business is located, but anywhere in the world. The choice of an outsourcing company is not limited to location, which means there is access to a larger number of specialists with a set of unique skills. No technology constraints – Some projects require diverse skill sets, and it can be difficult to find individuals who are a master of all trades. However, you can collaborate with a few IT firms proficient in different technologies needed to build the solution. A large pool of talents – When you outsource, you’re no longer confined to a limited choice of candidates within your vicinity. You’ll be spoilt of options with an immense global pool of talent to choose from.

India and China are the main Asian software development destination with nearly 5 million engineers in each country. Indonesia, the Philippines, Vietnam and Pakistan are also growing markets with the same type of outsourcing services as previous countries. As we mentioned above, the reduction in prices and the fast pace of development is achieved at the expense of lower quality projects. As well as cultural differences, unfavorable working conditions and differences in time zones negatively affect the quality of communication between the dedicated team and the customer. When outsourcing software development projects, you should choose wisely a competent provider who is the right fit in philosophy, culture, and engagement style as basing an assessment solely on rates or market share could be a major oversight.

Create an NDA and make sure your vendors sign it to avoid possible loss of information. There’s also training, project management, and the enormous Outsourcing Software Development risk of employees going off between projects. For startups and companies with an in-house IT team, there’s nothing like in-house development.

What Are The Benefits Of Software Outsourcing?

Clear communication from leadership and management is essential in outlining the role outsourcing will play and how it will impact individual team members. Intellectual property safety is one of the biggest concerns for any entrepreneur, and these fears are not unwarranted, of course as about 63% of data breaches arise because of reckless outsourcing practices. Unfortunately, some companies mostly focus on service level agreements without paying due attention to the vendor’s security policies, data loss prevention systems, methods of data processing used by the software development managers, and more.

Outsourcing Software Development pros and cons

And customers in one location get the same quality of support than any other location. Both these avenues require money though — money that might have otherwise gone back into finding customers for your business. The benefits of that type of ongoing education might not outweigh the savings and speed you get from outsourcing with an independent contractor who already has the necessary talent. If the digital product that you want to build is going to be your core business, you’ll need an internal development team sooner or later. This team is always available and understands your company and its culture.


Lack of available talent – Somehow, you can’t find the right talent in your city. Rather than spending months on training one, you’ll be better off engaging an IT vendor to get the job done. Budget constraint – You’re operating on a tight budget and, like many startups, couldn’t afford a permanent team. And the commitment of monthly salaries does not tie you down. Despite the seemingly high cost, there are sound reasons for building your in-house team.

In the outsourcing pros and cons debate, the benefits seem to outweigh costs, even for global giants like IBM and Intel. Hiring in-house as opposed to outsourcing might seem like a good idea at first glance, but it does pose some real problems. Finding and recruiting the right people, explaining your needs, and getting the most out of your developer takes a lot of time and effort.

Outsourcing Software Development pros and cons

By ‘software house’ we meana specialised company offering a dedicated team of professionals working and closely cooperating with an in-house team. Such an agency should be located in the same time zone, because it enables easy communication. Ideally, the headquarters of the cooperating companies are located on the same continent. The time difference between USA and Central and Eastern Europe is 6-9 hours.

If you have an in-house team of developers already working on multiple projects simultaneously, you may end up compromising on quality or delaying some projects in order to complete others faster. This means you can sit back, relax and expect only the best when you choose to outsource your software development to us. In order to save you more time and resources when you outsource, we use Agile development methods, which is known to be 3 times more successful at delivering projects within the budget and on scheduled time than traditional methods. The decision to outsource or build a team of developers in-house can have a significant effect of your business either now or in the long run.

How To Outsource Web App Development Right

You can have as many highly-skilled software developers as you want within a very short period…by outsourcing to one or more IT vendors with the capability to deliver what you want. As an example, we do the software development and project management with the latest tools including Docker, Jira,, Balsamiq Mockups, AWL, DigitalOcean, Git VCS and a whole lot more. When you choose to outsource, you no longer have to invest in the several different development tools required to get the job done.

Realm Five develops devices that collect various data, such as soil moisture, rainfall, amount of water in tanks, condition of tractors and their location, etc. from different parts of agriculture. For Crave retail Geniusee has developed 2 enterprise mobile applications that solve the double-sided problem for every shopper visiting the fitting room. Our client is a secure, automated platform that streamlines the merchant cash advance process and enables ISOs and lenders to manage their businesses from one centralized, convenient place.

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