Pros and Cons Of Software Development Outsourcing

Very few businesses are undisclosed to the term Software Outsourcing. Since the advent of globalization, everyone knows how their businesses can get ahead with the help of outsourcing software development projects. Especially, software outsourcing is at the top of the game and most businesses are already harnessing the benefits of software solutions created by highly skilled software developers. Software outsourcing provides cost-effective solutions which give you a competitive edge against other competitors. But is everyone aware of the advantages and disadvantages of outsourcing software development? Let us find out. 

One of the most admired methods is outsourcing where you can use someone’s services, and embrace them. We all know that Outsourcing is also a practical move since it eliminates the need for the company owner to engage a team of professionals to work on a one-time project or to solve a specific problem. If you are choosing outsourced software development for your business, then you are on the right path and your business could gain many potential benefits. On one hand, if there are businesses that are swiftly moving towards outsourcing, then on the contrary there are businesses that aren’t sure if they should outsource or not. 

This blog can be an eyeopener for all the businesses who aren’t sure of what benefits can outsourcing software development offer business. Why should they choose an outside company against in house team? Thus, we have decided to showcase to businesses all the strengths and weaknesses of Software Outsourcing as compare to in-house software development. This blog will help you decide whether you should go for software development outsourcing or not by portraying maximum potential benefits and risks associated with it. 

1. Advantages of Outsourcing Software Development

The decision of outsourcing software development is majorly based on just the cost-efficiency factor. Most businesses consider it as one of the greatest reasons for outsourcing software development projects. It is a more lucrative method than an in-house software development team developing software and web applications. There are other pros and cons of outsourcing software development which are listed in the upcoming segment.

1.1 Cost Factor

It wouldn’t be correct if we say that money is the prime motivator for most businesses to explore outsourcing software development. No. Not at all. There are other reasons too. But if we go back years then cost savings are undoubtedly an expected result of software outsourcing. Software developers from developing nations like Latin America, eastern Europe, and Asia charge less than in the United States, the United Kingdom, or Australia. This is one of the strong benefits of outsourcing to developing countries.

When you outsource, you are recruiting on-site staff of tech professionals  and experienced developers, as well as pay for payroll taxes, personnel training, bonuses, and a social security package. All of this may eat away at a company’s budget.

Furthermore, you will not be required to acquire the necessary software tools, and services for the team to operate with. The development company will handle everything. So, when you outsource to external experienced services providers, you are outsourcing all of these tasks and saving majorly on the cost factor. Broadly speaking, it is one of the inevitable reasons that offer benefits from outsourcing Software development. Outsourced project and app development will provide innovative solutions enabled with latest technologies at low cost.

1.2 Choose the Right Skills

Choosing a business to work for you allows you to select the set of right talents that works best for you and your organization. Selection of service providers who understand the software development process and  have domain expertise is essential for digital transformation for your business. When you get to select resources for your business, you may browse their portfolio and see how they previously dealt with clients. You can choose businesses that best fit your regular business needs. They can work together and respond to your needs. There are various engagement models for businesses to partner with other businesses. This involves monthly models, annual and others as well. The businesses are paid for their work as long as they are hired, as well as for the completed project.

The most important step here is to choose the right kind of company that will benefit your business in the long run. There are millions of businesses available in the market offering almost the same type of development skills. So, making a decision of software outsourcing provider selection from the long list can be daunting. But going through the outsourcing company, they must be skilled in the services you need

A seasoned and experienced outsourcing service provider will take you through the right path of technical selections and how it will turn out to be fruitful for your business. The reason it is added as a benefit is that you get to choose a team here with extremely talented resources in less time than predicted.

1.3 Time-Saving

Imagine if there is no outsourcing company, then you will have to do multiple things from the task list. They have to find the right resources and interview them, negotiating salary, and onboard a new employee all take time — only to have some depart a year or two later for a better opportunity. Now imagine if all this work is taken care of by an outsourcing company then what’s a better option? 

Working with an outsourcing partner allows you to delegate a large portion of the recruiting process, allowing tech executives to devote their time and attention to higher-value initiatives for the organization. 

When your business wants rapid turnaround and comprehensiveness, work both together and frequently. If you lean too far to one side, you’ll end up with a product that was delivered on time but will be faulty and prone to errors. On the other side, if you are inclined towards just the development process, you’ll end up with a fully developed creation but will miss your deadline. So,  neither alternative is perfect. The only thing here that can save you is to partner with an outsourcing business, which provides you the best chance of threading that needle. Outsourcing companies can take away all the processes and you can concentrate on core business.

1.4 Flexibility

One of the most vital features is flexibility to work. When you partner you an outsourcing company, you are liable to just focus on core competencies, other things are taken into account. Outsourcing solves capacity concerns because there is no need to hire workers for a short amount of time. You save resources and money since you don’t have to look for, employ, train, and house unique individuals for the job. Outsourcers have a flexible schedule and may adjust to the procedures of their clients.

2. Potential Disadvantages of Outsourcing

After the pros of software outsourcing, let’s move to the potential cons of development assumed by businesses. This may not be true for all businesses. Obviously, there can be software outsourcing challenges when it comes to partner with another business. Even if there are such challenges, it will not affect the business workflow. You can consider this as one of the disadvantages of Outsourcing. However, all these cons of outsourcing can be easily overshadowed now with technology.

2.1 Non-Transparency & Miscommunication

If we get into the literal definition of the terms offshore development, then we would define it as a process of delegating tasks to professionals located at a distant location. It can be a different continent or country or even state and even the time zones are different. Time zone differences and working hours differences can create problems when you will schedule meetings. Thus, the only thing that is at stake in such engagements is trust. If there is no trust, there is no point in developing such engagement. When the location of the outsourcing company is far, then the client cannot visit them frequently. This is when non-transparency and miscommunication step in .

If there is a cultural incompatibility with the partner firm has issues with English speaking, outsourcing might be problematic. There can be concerns when you don’t clearly communicate the expectations. The time zone variations with little working overlap can lead to a breakdown in communication. In-house project managers in charge of an outsourced team can assist with this, as can well-organized teams.  Onshore firms make project management much easier as compared to offshore outsourcing.

2.2 Not Meeting Quality Benchmarks

Another important reason why businesses cannot think of outsourcing is that the collaborating company did not meet the standard quality expectations. The distance is already a concern, and in addition to that comes low-quality output. This leads businesses not to outsource. But you can’t judge all companies based on one past experience. This ensuring constant communication and real-time monitoring will allow you to develop products as you wish and meet qualitative benchmarks. 

When you outsource, you must have full control over your product. The communication from the client-side should be clear, even if it is repetitive. In addition, you must also ensure that you are employing the highly skilled employees that you anticipate. It’s excellent to keep expenses low, but there’s a reason why some of these outsourcing firms’ rates are so high. If you go too cheap with outsourcing, you risk employing low-quality specialists to execute your task. This will have a direct impact on the final product’s quality.

2.3 Security Risks

Security is an unsaid concern and most of businesses are taking care of it. There are many cases of a data breach, financial information exposure or by any other means, data is available to the public or leaked to peer companies. This is a strong reason for businesses to not outsource their needs to a third-party company. 

To abide by legal clauses is the right of both parties. If you hire a professional outsourcing partner, they will execute agreements such as NDAs, and General Agreements. This will greatly increase the security of data. So, it is advisable to make commitments for your business with a reputable firm. Remember that picking a dependable business for essential services is one of the most responsible stages in outsourcing software. And providing assurance of all your security rights is their responsibility.

3. Conclusion

If we go by stats, then more than 78% of businesses collaborate with the right software outsourcing company and have good outsourcing terms. This clearly means a maximum of businesses has healthy relation with their outsourcing company. Although, we agree that there are certain pros and cons of software outsourcing that the development team has to face when they outsource. If you decide and do it in-house, you face more cons of in-house than outsourcing software development. Consider a good reliable partner with a good reputation, experience, talents, and abilities as a software development outsourcing business partner. Partnering with a company is not a day’s task. Your company’s reputation and services are at stake so, make sure you choose a business that’s worthy, reliable, and progressive. 

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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    1. Karna

      Nowadays everyone is considering outsourcing software development. But it is very important to know the ins and outs of outsourcing. Hence this article is a perfect guide if we want to know the pros and cons of outsourcing. By considering this article we can avoid pitfalls which we face during outsourcing software development services. This article will also clear many misconceptions about outsourcing.