The Ultimate Guide To Outsourcing Software Development Services

Table of Contents:

  • What is Outsourcing software development?
  • The Pros and Cons of Outsourcing software development
  • The 3 Most Common Outsourcing Software model
  • 3 key software development Outsourcing tips
  • Conclusion

What is Software Outsourcing Development?

Software outsourcing is the process of selecting a third-party service provider software development services who will manage all the work involved in a development project.

Companies can easily reduce costs with the help of outsourcing software development services.

  • Almost 54% of all companies use third-party support teams to connect with customers.
  • 78% of businesses all over the world feel positive about their outsourcing partners.
  • 71% of financial service executives outsource or offshore some of their services.

The Pros and Cons Of Outsourcing Software Development

Here are some pros and cons of outsourcing your software development team:

1) Save Time And Money:

This is the main reason why companies outsource their software development process.

59% of all businesses use outsourcing as a cost reduction tool!

Hiring in-house software developers can be expensive because you use the resources to scout, train, and ship.

When you hire an outsourced team, you can save money on the rental costs. Also, you will not need to invest in office supplies or training.

2) Focus on Core Business Processes:

Outsourcing also benefits your inner team!

By transferring time-consuming projects to a third-party mediator, you can reduce the workload for your in-house tech team.

Since these outsourced teams do not require any additional guidance, your employees can focus on projects that contribute directly to the growth of the business.

Outsourcing can also put pressure on your internal team. Instead of forcing your inner team to handle the projects they have to deal with! No, only outsource to a third-party vendor!

That is why, your full-time employees can focus on strategic goals that match their skill level, while the outsourced team focuses on these niche software solutions.

3) Improve Product Quality:

Your outsourced team may have dedicated resources to testing and quality assurance to ensure that the ultimate software product is stable for a better user experience.

Furthermore, since your outsourced team may have fresh ideas for improving your software, this can lead to further innovation. They may suggest new ways to solve existing business problems.

4) Barriers in Communication:

This is the biggest disadvantage of outsourcing. You may need to overcome language barriers, cultural conventions, and time zone differences.

This can completely slow down the problem-solving process and also hamper productivity. So how do you bridge the communication gap?

Here are the solutions:

  • Use collaborative tools such as slack to handle your process.
  • Encourage transparency by checking in with your remote team each week.
  • Identify potential language barriers and hire an interpreter if necessary.

5) Privacy Risk:

There may be some security risks when working with an outsourced team. You disclose confidential company data to a third party and trust them to use it properly.

Your software or algorithm is at risk of being stolen or copied by an individual employee. Alternatively, if the outsourced company’s database encounters leaks, your valuable information may be compromised!

How will you reduce these risks?

Here’s how you can protect your data:

  • Ask software vendors to sign the NDA (Non-Disclosure Agreement) before sharing their data. This document legally prevents them from sharing trade secrets.
  • If you own the software, include the intellectual property rights clause in the agreement. This will protect you from any future copyright infringement.
  • Use performance monitoring tools such as Time Doctor to monitor your outsourced team. This will help you find out what they are doing and accessing them.

The 3 Most Common Outsourcing Software Model

You can use different models to outsource the development, maintenance, and testing of your software to meet your needs.

Here are these three models to manage your team:

1) Project-Based:

This model consists of end-to-end management of the entire software project. You can delegate project requirements to an outsourced team, and the team works on the project from start to finish.

Before the project starts, both you and the outsourced team set the cost and deadline for the project.

When should you choose this model?

  • If the requirements of the project are clear.
  • If the scope of the project is fixed.
  • If the deadline is known and agreed upon by both parties.

2) Dedicated Team:

The dedicated team can include a variety of skilled professionals such as software engineers, designers, UX experts. They make sure that your product development process runs smoothly and efficiently.

Managing a dedicated team is like managing a remote team. You can hire an expert as a project manager who communicates with your outsourced team and informs you.

When should you choose this model?

  • If you want to establish a long-term relationship with an outsourced company.
  • If your software needs regular maintenance and updates.
  • If your software is highly scalable.

3) Staff Augmentation:

In this model, the third-party vendor develops the software development team, but you are responsible for the basic operations.

As a client, you manage software development projects and all their tasks. You are also responsible for the division of responsibilities within the outsourced team.

Meanwhile, the developer is responsible for the productivity of the team. They also deal with workers’ concerns such as leave and compensation.

When should you choose this model?

  • If you want to be more involved in the development process.
  • If you want more creative control during software development.

3 key software development outsourcing tips

There are a few things to keep in mind when outsourcing your software development process.

A high-quality software development company can create great software that boosts your company’s productivity. However, hiring a shopkeeper with a bad reputation can derail your work.

Keep an eye on these features:

  • User experience: How easy it is to navigate and engage with content.
  • Mobile Functionality: How well the tool works on a mobile device.
  • Design: How beautifully designed software is.
  • Software load times: How fast the tool loads.

2) Start With a Test Project:

Before hiring a software company, you need to be confident about its capabilities.

Start by asking their team to work on a trial project. Their performance on this project can help you decide if you want to work with them. Get the best san diego web developers to boost your business and improve your sales

You can learn a few things about your outsourcing partner through this test project:

  • Communication Skills: Does your outsourced team ask important questions? Are they able to follow the instructions effectively?
  • Confidence Ability: Is your outsourced team open and honest about their process? Are they able to keep their promises?
  • Time Management: Does your outsourcing partner create an internal deadline? Are they able to submit their work on time?

3) Use Performance Monitoring Tools:

One problem with outsourcing software development is that it is difficult to monitor the performance of your remote tech team.

Your team maybe thousands of miles away. How would you verify:

  • If they are working during office hours.
  • If they are accessing a non-work-related website.
  • If they are sending you bills for idle working hours.

Tools like Time Doctor can help you here.

What is a Time Doctor?

Time Doctor is a powerful productivity software used by PWC, Verizon, and KPMG to track the work activity of its employees.

Here’s how to help you manage your outsourced software development team:

  • Time Sheet Reports: Measure how much time an employee has worked during a given period.
  • Detailed Project Reports: Find out how much time your projects take.
  • Web and App Usage Notification: Indicate which websites are accessed during your long working hours.
  • Disruption Management: Help your remote employees avoid being disrupted by pop-up alerts.
  • Disable Timer: Make sure your remote employees are not logged in at the same time as working hours.
  • Payroll: Bill your team to complete tasks in Time Doctor.


If you own a small business, outsourcing is one of the easiest ways to save money and speed up your software development process.

With outsourced software development, you will have no difficulty in leveraging the talented workforce to grow your business!

Amy is the content manager at PROS — Internet Marketing & Technology Company in San Diego