Pros and Cons of Outsourcing Software Development
Table of content
  1. What is software development outsourcing
  2. What to choose: in-house team or software outsourcing?
  3. Pros of outsourcing software development
  4. Disadvantages of outsourcing software development
  5. A situation when it makes no difference
  6. Summary

Pros and Cons of Outsourcing Software Development

 

What are the true advantages and disadvantages of outsourcing software development? Can time zone differences, costs and communication really be the biggest nightmares of your company? Read this article in order to find out!

What is software development outsourcing

When outsourcing software development, you entrust coding to an external development company. That means you don’t have to build an internal development team and are assured of the development resources whenever you need them.

Software development outsourcing is sometimes confused with IT outsourcing, but it’s not the same. To be precise, IT outsourcing is a bit broader term, and software development outsourcing is a part of it.

Nowadays, outsourcing software solutions development is becoming more and more popular among various companies around the globe, and there are many benefits from such an approach.

There may be many reasons for it, such as the lack of experts in a particular field in one’s workplace or the lack of money to fill up a full-time employee vacancy.

We completely understand that you can be worried that the rates will be too high or that these unknown software outsourcing engineers may mess up the quality of your product.

To avoid such situations, choose the best software development company. To make that happen, it might be beneficial for you to read an article about how to choose the best software development company by Mike Popov.

What to choose: in-house team or software outsourcing?

There’s no one simple answer to this question. Everything depends on your needs. There are always pros and cons of outsourcing software development, so you have to choose the best solution for your company.

Let’s take a look at the collation of the pros and cons of outsourcing software development.

Pros of outsourcing software development

Software development outsourcing might benefit the entire company, not only results in a great app.

Below you’ll find the reasons why many business owners choose software outsourcing instead of hiring an in-house development team. So, check the outsourcing software development pros.

Short-term employment

Hiring a third party (or simply – software outsourcing) allows you to avoid hiring in house developers in the long term. We all know what the latter usually is like…

Expenses, sustainability needs, payroll taxes, personnel training and many more. Sometimes you just need somebody for a month or five (you will always need someone for software maintenance).

There is no point in creating a whole new position just for them, so outsourcing makes your life way easier, no matter if it is a big or a small project. Especially when the outsourced team knows what you are doing and how to manage work between different time zones.

Immediate start and team extension

Even if you need a full-time development team, employing a company is cheaper than building an internal department from scratch and hiring new employees in-house.

You can save time and money spent on the recruiting process and start the development process almost immediately. Your team can be extended instantly if you need additional human resources or can be shortened when you just need to maintain the app.

Flexibility

Software outsourcing gives you the freedom to hire someone only for a specific time, sometimes only for a few hours a week if needed.

When your company is done with the project or hits a low season, you can simply come to an end with your cooperation, and both you and your outsourcing vendor will go your separate ways.

Having chosen this type of cooperation, there is no need to discharge any software developers in such a case (not to even mention that hiring and firing people all year round is still more expensive and comes with a great load of bureaucracy each time).

Easily controllable and predictable costs

By hiring a company, you have your payments under control. You can estimate development costs and make sure the expenses don’t exceed profits in the long run. You can manage the roadmap flexibly to adjust it to budget fluctuations instead of paying your internal development team monthly salaries all year round.

Cost savings and straightforward cooperation

Who would not like to reduce expenses and paperwork? Software outsourcing is one of the ways to do it. Instead of hiring a full-time worker, you simply employ contracted workers who will do the same job for you, but what’s important, with no legal costs of employment, insurance and vacancy to be upheld.

There are no pauses in development when workers take sick days. There’s no need to wait with a crashed app until an in-house team member comes back from their leave. The contractor of your choice is obligated to provide the service continually. You don’t need to provide a desk in the office or equipment.

The outsourcing provider is the one who worries about all the mentioned above issues; the client receives highly skilled team members who bring, together with their resources, high experience and intellectual property.

Moreover, you may also save money on outsourcing while choosing particular areas of the world (like Eastern Europe). Depending on locations, the hourly price for outsourcing software may differ greatly.

However, you need to remember that going for the cheapest option is not the best thing you could do because together with a lower price, there usually comes a worse service quality or troubles with communication between different time zones.

Be clever and witty. Choose cost-effective rates of software outsourcing with all of its benefits. I suggest you to check an article on how to choose the best software development company by Mike Popov.

Greater expertise

By not having to limit yourself just to people living in your area or country, you open yourself up to new possibilities. You may hire highly skilled software developers worldwide (check the best outsourcing destinations).

Somewhere ‘far, far away,’ in a different time zone, you could find a new person (or a full team of them!) that has a higher level of expertise or working capacity than the ones available locally. In simple words, outsourcing allows you to break the chains of the local pool of workers and seek them in other, perhaps more suitable environments (if you need to read more on this, check our guide through on-shore, off-shore and near-shore companies).

Obviously, the best quality outsourcing companies, which gather the best development experts in their fields, will be more expensive but will also provide you with an equally valued solution.

It’s especially important when your project is demanding. You need the team to have core competencies and the latest technologies. Using the most innovative technologies is sometimes risky if they are not properly tested. A reliable company won’t let you make the wrong choice.

Another benefit is that you don’t need to invest in training your developers to make them up-to-date. It’s all up to the company you are hiring.

All the talents you might need!

Software development is not just coding. You need an analyst to analyse your business area, indicate your target audience and research the competition (to mention just a few aspects). Having those, you need a designer who will visualise the app, a developer who will code it (backend and frontend), and a QA tester to check its quality and whether it’s bug-free. You also need to have in-house project managers in your team.

Before launching the app, you need to create a marketing strategy to gain customers and make the project successful. Even if you have your own marketing department, experienced professionals who know software marketing might provide your company with valuable insights and support.

Without an outsourcing company, you need to hire (and then probably fire) all those people. An experienced outsourcing service provider will address all those needs.

Relieve your in-house staff

As all the ‘hard work’ will be taken care of by the outsourcing company, you and your day-to-day workers or software developers can focus on maintenance, content management and customer service without being overly fatigued with the stress of so many additional tasks.

As a client, you only have to provide your outsourcing vendor with vital information about what you want to achieve and the overall data and technology that you want to use. It sounds harsh, we know. But in order to get the project the way you wanted from your in-house development staff, you would have to go through the same process. It only seems more complicated, but actually, once you get someone solid to outsource for you, they lead you by the hand while also working their asses off in the technology you chose. Your role is to accompany them.

Specialization & industry knowledge

Outsourcing software development allows you to hire qualified specialists for particular tasks, making ticking them off easier, quicker, and smoother. You can (or actually SHOULD) always choose software developers who fit your tech stack needs and know everything about the industry novelties (they’ve done several projects at least), internal business processes, has the best resources, and provides the client with high-quality outsourced product development.

Do you want to use cookies that are not regular ones? Do you need an external vendor that knows its way around the Internet of Things?

We assure you that you will find a team of eager project partners with domain expertise that will happily take care of the whole process, and the cost of that business project will be reasonable.

Project management

When you hire a software development partner, you are hiring experts. They are developing digital products daily, so they know how to effectively manage the software development process.

They should also provide you with a project manager. Because of this, you can save time and, therefore, money that might be needed for an in-house team to establish an effective process.

Time-saving

One of the greatest things coming together with choosing development services is saving your and your long-term employees’ time. Thanks to software outsourcing, you and your team can focus on what is the most important and urgent (your core business, of course), but you also have enough time to fit it all into your schedule.

Who does not like having everything under control? Another way of saving time is, in this case, temporarily getting some more of the highly specialized people into your team in order to speed up the whole development process (and why not simultaneously add to the quality of code and the overall software, too?).

Better equipment

All the software jobs will be done by a team of experienced developers from an outsourcing company specialising in software development. They will, most likely, have the best high-quality equipment (this way, you do not have to buy it yourself!) and the knowledge needed to complete the tasks.

Your vendors will also be up-to-date with all the latest industry news and tools that may come in handy. You may expect the software development partner to provide you with software tools and data management platforms needed in project management.

Disadvantages of outsourcing software development

In-house software development is not always the best choice, and sometimes it’s better to have an in-house team. Below you will find the most common problems that may occur when outsourcing software development.

Miscommunication

This is a big problem which can occur when hiring outsourcing companies, and there can be a few different reasons for that. You may either work remotely and cannot understand each other properly due to distance (for example, the United States vs Italy), or the software engineers do not have the desired level of the target language, usually English (which makes communication difficult in general).

Sometimes different cultures equal different approaches to fields related strictly to work. However, if the company is vocational and hires professional developers, you will always be able to work it out and create a great product together.

Different working hours

We can also add a time difference to this point. Keep also in mind that different time zones mean different working hours. Make sure the company has made at least a few worldwide projects, and there will be no communication problems (they will be available for you when you need them).

Confidentiality

There are always some risks while giving your confidential data to someone from outside of your company, and this is why it is so important to check whether the outsourcing team is reliable. Do some research. Check information about their experience. Read a few opinions about the provider, not only on their own website but on special platforms designated for honest feedback, such as Clutch.

For example, you can check out our reviews right here. What is also important at this point is the gathering and signing of all the necessary documentation guaranteeing the confidentiality and safety of your data.

Service quality

There is a risk of choosing the wrong company for the wrong task. Some people may not be skilled enough in a certain field that is vital for your app or website. To make sure you’re making the right choice, choose the company carefully (you may use our comprehensive guide).

The lower the price for the company’s service, the higher the risk. High-quality developers are not that cheap (even in Eastern Europe). This is why you should contact only reliable providers and not trust absolutely everything you read or hear about them.

Less control

It is not that easy to check up on the daily progress and the general direction of the project when one hires a remote team. Sometimes it is simply easier to create a crew working on-site.

Remember, though, that it’s no different from hiring someone who works remotely for your internal team. If you need top world talents, you probably choose this model of work anyway.

However, even though this side of outsourcing software may be problematic or annoying, it is all between you and the developers and what priorities you set at the beginning of your cooperation.

It is best to stick to communication – it costs nothing and can help make the working process between your teams of the greatest quality.

Don’t listen to companies that state that you don’t need to involve in the process. It’s exactly the opposite. As a business owner, you have to be a part of your team, and you should cooperate and supervise to make the best app ever.

Higher risks

When interviewed, a potential outsourcing partner might assure you that he will deliver the solution without any proof. It might be the case when your app requires innovative solutions.

Beware when a potential contractor proposes you to use not properly tested brand-new technologies. Those might be promising, but there’s a risk for your app development. Such technologies might not be battle-tested and not have a strong community willing to help your developers solve their problems. You may not be able to find another contractor who will overtake the project if the first company fails.

Additional costs

Sometimes you might have unexpected expenses, especially when the project is ineffectively managed or planned. Keep in mind that higher costs may appear because of an improperly defined scope of work. You can avoid this situation by hiring a reliable company and precisely defining the tasks to be done.

Additional costs might also appear when you need the project flexibly changed when the app concept changes (you may add some features that were not contracted). In that case, a software development company may allocate resources to develop those features instead of the contracted ones. It doesn’t mean the project is poorly managed. That means they are adjusting the project to your needs.

A situation when it makes no difference

Despite all disadvantages mentioned above, there are also certain situations where there is no difference whether we outsource software development or build an internal team. Below, you can find a perfect example of such a case.

Time to fix the problem

If you have a problem with a working product, someone has to fix it immediately. There’s actually no difference whether you have an external or internal team; the reaction time will probably be similar (unless your in-house developer will be on leave).

When outsourcing software development, you have your own dedicated team that is obligated to solve the problem within a particular time (it’s about an SLA). Sometimes such a solution might be better than having an internal team, which is always overloaded with tasks and might put off the urgent fixes for a while.

Summary

Let’s sum up what was said above. There’s no golden mean for your company to choose when outsourcing development. Planning digital transformation or satisfying customers, you have to assess which solution will be best for your company and provides you with a competitive edge.

If you outsource software development, you can increase cost efficiency by reducing the costs of hiring and maintaining an in-house team, gaining advantage from external vendors’ experience and knowledge and receiving the best quality app. If you’re involved in app development, you have everything under control and may see the external team as internal indeed.

However, there are some risks behind this solution. You might be concerned about the communication level, confidentiality and additional costs. If you’re not involved enough, you may lose control over the outsourced project. Choosing the wrong development company might even result in your app failure.

Now it is time for you to analyse all of these pros and cons of outsourcing software development services and make the decision by yourself.

Maybe you know someone that had an outsourcing team working for them, and this way, you can ask the very clients about a particular company’s services and cost? Maybe not all of the risks are applicable in your situation.

We hope that you found this article handy and that it will help you make up your mind.

If you need further guidance, check our article on how to choose the best partner company!

Customer Success Manager at TeaCode

Since 2016 Mike has been helping international companies to gather and analyse requirements for their apps-to-be and guides them through the first stages of the development process. He aims to help our clients reach their business goals by focusing on their target groups.

Having such a background, Mike shares his knowledge to help companies choose the best software developer that suits their needs.

Social media & language specialist at TeaCode