How To Outsource Software Development

Software development outsourcing has become increasingly popular over the last few years. It’s been estimated that 64% of all companies outsource their whole development process. They do this because it reduces costs, enhances product quality, and more. 

Because the software industry is always changing, there are new programming languages being introduced, new methodologies being developed, and previous industry-standard practices are becoming obsolete. 

If you’re considering hiring a software development agency, we’ve come up with this article to provide you with some helpful information. 

What Is Software Outsourcing?

Software outsourcing is something that’s done when companies choose to have custom software solutions developed by a third party. It has a largely digitized business landscape and companies are able to access some of the world’s top software developers. Startup and established companies alike are using software outsourcing to help develop their products. 

There are a few software development services that you can outsource including: 

UX Design: This offers usability consulting, front-end, and UX design services for TV, PC, and mobile devices across all industries. 

Consulting: Offers technology advice to easily implement the ideal technology stack for customized software development requirements. 

Feasibility Study: Assists in benchmarking your product through proof of concept, feasibility study, and user testing to reduce risks in the early stages. 

Software Architecture: Helps design solutions faster and more efficiently for projects at different scales. 

Software Testing: Provides a complete range of software testing services to provide a quick, reliable, and efficient software product. 

Models You Can Use

There are several outsourcing models you can use to help manage your team. You can use different models to outsource the maintenance, development, and testing of your software solution to best suit your business needs. 


This model is meant to outsource the end-to-end management of the whole software project. You can turn over these requirements to the team and they will work on the project from start to finish. Before the project even begins, you and the team fix the price and deadline of the project.

 Dedicated Team

This model consists of hiring a team of experts from a third-party outsourcing vendor. These professionals work together and act as an extension of your core team. The team can consist of various skilled professionals such as designers, UX specialists, and software engineers.  

Staff Augmentation

For this model. Third-party vendors build the software development team, but you’re responsible for the core process. You will manage the software development project and all of its tasks. You are also responsible for the distribution of responsibilities within the team. The developer is responsible for the team’s productivity and manages concerns related to employees such as compensation and vacations. 

Benefits of Outsourcing

There are several benefits of software outsourcing that can help your company. Let’s check some of those out. 

Cost Reduction

A survey came out in 2022 that revealed 70% of companies are motivated by cost reduction when outsourcing their software development projects. They take into consideration their high HR costs which include recruiting, hiring, training, and managing technology. These HR costs can also include benefits, paint time off, incentives, and infrastructure needed for full-time employees. These costs can be cut by outsourcing. 

Quicker Time-to-Market

Businesses are more competitive today than they ever have been, which is why innovating quickly and wisely is important. Being the first to market can mean everything when it comes to the difference between success and failure. With outsourced software, the staff is an in-house team that takes on the responsibilities of your core software products and current customers. The outsource team then focuses on the management and performance of your new technology product timeline. 

Maintenance and Support

Constant support and maintenance play a crucial role in software development. Not only is an outsourced software development provider vested with the responsibility to create custom software, but they are also there for support and maintenance. Since your business is constantly changing, the support has to evolve as well. Your in-house team will be qualified to handle any bugs and glitches that pop up. 

Mitigating Project Risks

When you plan to develop and release new software, there’s always the risk of code issues, deadlines, inaccurate estimations, and unrealistic goals. When you outsource your software development, you will then be mitigating the risks that are associated with developing software products. You do this by working with a team that utilizes a high-quality project management system, effective workflow, and proven success in creating applications that generate consistent ROI. 

Outsourcing Challenges

Even though there are plenty of advantages, there are challenges that come with software outsourcing as well. 

Communication Barriers

This is one of the main disadvantages of outsourcing. There may be a time when you have to deal with problems such as language barriers, cultural conventions, and time zone differences. An example of this would be if your outsourced team is on the other side of the planet and runs into an issue while your side of the planet is asleep. They’ll have to wait hours to get your approval for a change. 

Privacy Issues

Security threats are a real issue, especially when working with an outsourced team. You’ll be exposing confidential company data to a third party and trust them to use it properly. You also face the risk of your outsourcing software or algorithm being stolen or replicated by an individual employee. You can help safeguard your data by asking your software vendors to sign a non-disclosure agreement before sharing data. You can also include an intellectual property rights clause to help protect you from copyright infringement issues. 

Code Quality

You may face errors due to miscommunication as well as adhering to quality standards if you’re a non-tech firm without significant coding expertise. You need to be able to check if the code is well-formatted, documented and tested for long-term success and bug-free execution. 

You can keep these issues at bay by ensuring the software development outsourcing company has an established quality assurance process that includes code review and unit testing. Additionally, you can use project management tools such as Trello and Basecamp for logging bugs and managing backlogs.  

Final Thougths

The best thing about outsourcing software development is that you can manage your team in any way you like. You can use various models including project-based, dedicated team, staff augmentation,  time and material, and fixed-price. Remember to choose your outsourcing provider wisely, always start with a test project, make sure you define your goals, and use performance monitoring tools.