Benefits of Outsourcing Software Development

Today’s disruptive business is driven by high-end technology changes. The outsource software development service industry is under pressure to build pioneering software that is adaptive to current-day technology and innovations. Developing software using the expertise of an in-house software development team can be a herculean task with limited expense and time deadlines. So, the best possible choice that businesses could make is to delegate the process of software outsourcing to experts. Modern businesses need an experienced software development company with a proven track record to help craft an outsourcing strategy and avoid pitfalls. 

While businesses are smart enough to understand the need to manage multiple on-going activities and concurrently prevent business risks and accelerate growth. This shows that there are numerous things for businesses to address and they are unable to manage effectively. Outsourcing your software development  projects to software developers with cutting edge  technology is crucial for developing your business and gaining a competitive advantage in the market. This probes them to team up with experts in the custom software development outsourcing business. However, now that outsourcing is nothing new still businesses are reluctant with the thought of outsourcing. So, to bring clarity to this, let’s look for reasons why businesses should outsource, what advantages they get and in which ways they can access quality software services and for that let’s start from scratch.

1. What is Software Development Outsourcing?

If we were to describe outsourced software development in the simplest terms then we would say it as a virtual setup in which an organization chooses to collaborate with an external software development agency to perform all their tasks of a custom software development project effectively, which may be challenging to perform in-house.

Setting up a business by hiring a large pool of talented professionals, affording their high pay scales, renting a brand new infrastructure to cater to different businesses- it is not a cost-effective option. In addition there are accelerating operating costs, lost focus on core business goals and a trembled business foundation. Hence, delegating these business needs to experts seems to be a wise call.

Unlike before, Software Outsourcing has also come a long way from its inception. In 2020, Software development Outsourcing has grown immensely, not just to provide what businesses need but to meet the emerging needs of the tech market and optimize the way business runs in almost all the sectors. Outsourcing software can help businesses save their time and money.

Outsourcing is a good practice of performing certain challenging tasks that takes up most of the business time and may not give fruitful benefits in the very first instance. 

Talking about the statistics, in 2019, the global IT outsourcing market had a value of USD 333.7 billion, and it was expected to grow by 4.5% CAGR and reach USD 397.6 billion by 2025, during the forecast period (2020 – 2025).** This clearly shows that the growing business needs change because of the inclination they possess towards application innovation and digital transformation. Certainly, software outsourcing has become a key differentiator for most organizations. (** Reference –

2. The need for outsourcing in the Software development business

Results show a dramatic shift in business thinking which has probed multiple industries to partner with leading custom software development companies. Also, as per the above statistics, more and more businesses are impelled to outsource their software development services to experts and leverage the advantages of outsourcing to meet the increasing demands of the IT business space.

Through our understanding of business needs and analyzing other business markets, we have sieved out the following reasons for why businesses should outsource.

  • Reduce development costs
  • Accelerate time-to-market
  • Address Business-critical needs
  • Drive transformational change
  • Solve Capacity issues
  • Uplift service quality

The Software project outsourcing has covered mostly all the business verticals such as Financial Services, Healthcare, Technology, Media and Telecom, Life Science and similar. It has been continuously growing and has a huge impact on other growing industries as well. Software Outsourcing has numerous ways to engage businesses for their tailored outsourcing needs.

3. Software Outsourcing Engagement Models

Every business has its customized needs and depending on the structure and the need they decide the engagement models. Software outsourcing companies are hellbent to deliver tailored business needs that accelerate business success rates and amplify customer satisfaction. Depending on the term of client relationship with the custom software development companies, businesses can decide which type of engagement they want with the company.

There isn’t a universal method of engagement with clients, the majority of businesses have defined a fixed method to engage with their businesses. The primary aim of this method is to align business needs with software development offerings. The decision to choose the type of engagement depends on various factors. The main four types of engagement models are

  • Dedicated Development Team
    When the business has a clear idea of how the project will proceed and grow, choose this method of engagement. This works the best and lasts long for businesses with perfect resources at all favorable times.
  • Fixed Price Model
    This method is widely preferred by businesses when needs are fixed and unlikely to change. Herewith this engagement model you can fix the requirements, price, scope and deadlines for project deliveries.
  • Time and Material Engagement Model
    When the business is continuously evolving with blurry requirements with no surety of future requirements then organisations should select this method of Time and Material model. Here your business pays only for the amount of work delivered and time invested.
  • Staff Augmentation
    Choose a method of software outsourcing with a long-term perspective and achievable business goals. With Staff augmentation, businesses can add resources to their team as per the business requirements for a temporary basis to augment their workforce with skilled resources and achieve business goals.

4. Significant Benefits of Software Outsourcing Services

  • Flexibility
    Businesses of any size or from any industry take up multiple responsibilities and have to constantly fudge between numerous tasks to maintain a balance in business. In an attempt to manage all these acts of hiring, training and managing, the core responsibility of software development remains ignored. Leveraging the potential of software development outsourcing, businesses can focus on core business goals while the experts handle the custom software development process. With complete liberty of choosing the engagement models, technology stack, software development and resource scalability- the enhancements in custom software development can be easily modernized.
  • Risk Sharing
    A software outsourcing company is an addition to the business core offerings helping them succeed with their proficient resources, advanced technology knowledge and substantial experience. A good software outsourcing service provider is a flagbearer of business success as well as failure and will stand against all odds and help them rejuvenate their business in case of any unfortunate loss.
  • Focused Strategy
    Most of the organizations do not regard the recruitment of developers from overseas as their prime competencies or revenue generators. Hiring a software development outsourcing company can help you leave these complicated operations to an outsourcing company. This creates a huge diversion and frees up time to strategize the schedule to focus on important tasks integral for business.
  • Time and Cost Control
    Gone are the days when cost savings was the only agenda behind outsourcing. It is one of the vital aspects contributing to making software outsourcing decisions but there are several other factors too. Apart from, cost-saving time and offering top-notch deliveries at a reduced operation cost is also a task of outsourcing. Nearshore software outsourcing companies in India maintain the same  time zone, business stature and offer high-end technology services maintaining the standardized methods of development.
  • Improved Service Quality
    Upskilling is another important aspect for a business to progress and outsourcing this process has become simpler. Professionals at custom software development companies are proficient enough to develop a robust solution that undergoes standard quality parameters. After thorough testing and trails, the developed app will be of improved quality backed up by stronger architecture and great user experience.
  • Faster Time to market
    Though they say there is always a scope of improvement but no one appreciates errors, especially when they are time-consuming and repetitive. In this fast-paced market where time is money, businesses always want to lead the software development market with digital innovation and creativity. Software development companies help businesses achieve this by developing unique apps with speed and agility.
  • Futuristic Approach
    The conventional outsourcing method is now outdated with the onset of the current-day software development outsourcing approach. To stay ahead in the competition, businesses must develop such software and apps that are future-ready and can resist strongly against any technology changes. Thus businesses won’t require to update frequently and yet use the latest technology for their businesses.

5. Last Thoughts

With the advent of newer technologies, it has become a new norm for businesses to approach outsourcing for faster progress. Especially in the software development outsourcing business, we deal with rising technologies such as the Internet of Things (IoT), AI/ML, 5G connectivity, and blockchain and there is a constant battle of delivering the best. Every business can harness these advantages of software outsourcing and accelerate change within the organizations with the skills of your partnered outsourcing firm.

Itesh Sharma

Itesh Sharma is core member of Sales Department at TatvaSoft. He has got more than 6 years of experience in handling the task related to Customer Management and Project Management. Apart from his profession he also has keen interest in sharing the insight on different methodologies of software development.


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