Outsourcing Software Development

Outsourcing software development

Software development outsourcing is a process where an organization or a company hires a third-party service provider or an external software development agency to handle the software development projects and effectively perform all the tasks of the project.

The process of outsourcing software development is trending for the past couple of years. A few studies found out that 60 per cent of software development companies outsource at least a part of their software development processes. The common aspects of outsourcing development are planning and project management.

Why businesses need software development outsourcing?

The reasons why businesses or companies need to consider outsourcing the software development process are as follows:

  • Low onboarding cost

Recruiting a new team member is a long process. It takes time for the new employee to understand the organization’s rules and regulations and settle with the workflow. By hiring a third-party service provider, the on-boarding process and time can be minimized to essential knowledge. Outsourcing helps organizations get a professional team that takes less time to understand requirements and specifications. 

  • A way of talent recruitment 

Outsourcing helps businesses work with expert mindsets in the field and avoid the hassle of permanent employees. Outsourcing is about avoiding the full-time hiring of employees. But the process also includes the backup list of excellent employees and a contact list of industry experts for future references or recruitment.

  • Experts knowledge 

The outsourcing of human resource experts gets new ideas for businesses from their past experiences. These new ideas benefit the businesses in completing an isolated task. 

Software outsourcing models 

For software outsourcing, there are various models available. Businesses can choose the right model for outsourcing development, maintenance and testing your software that best suits your business needs.

The three most common software outsourcing models are:

1. Project-based 

A project-based outsourcing model for IT development is the best solution for any company with its goal and software requirements but no team to perform the required tasks. The outsourcing team takes up the project responsibility and ensures that all the project works are done right from the beginning till the end. This team regularly keeps updating the company about the progress of the project. 

The project-based model can be preferred by the company when:

  • The project goals are clear.
  • The project deadlines are fixed and agreed upon by both the company and the outsourcing team.
  • When the company has the scope of the project fixed.
  • Whenever the in house team effort in the company is limited.

2. Staff augmentation

This outsourcing model maximizes the company’s in-house efficiency while retaining full control of the outsourcing development process. In this outsourcing model, the client or company borrows an outsourcing or development team from the vendor for a necessary period. During this period, the outsourcing team becomes an integral part of the company, working on assigned tasks to meet the project requirements.

Organizations can opt for this outsourcing model when:

  • The company is looking for an involving team in the development process. 
  • Creative control over software development.
  • When the company needs help to complete specific tasks and cannot go through the whole recruitment process.
  • When there is low time and budget and the company cannot onboard permanent employees with the required skills. 

3Dedicated team 

This type of outsourcing model is the middle ground between staff augmentation and a fully delegated project. As the title suggests, a dedicated team of experts with skills are hired by the company from a third party vendor. The hired professionals work together with the core team as an extension to meet the project deadlines. This outsourced team is managed by a project manager (PM) who keeps reporting to the company about the strategic decisions and progress. In this outsourcing model, both the client and the outsourcing team are equally responsible for the end product’s success.

This outsourcing model can be considered when:

  • The company is looking to build a long-term relationship with the outsourcing company.
  • The company’s software is highly scalable.
  • The company’s software requires regular updates and maintenance.

Essential Tips in Software Development Outsourcing 

The following are a few key tips to be followed when outsourcing your software development processes.

  • Service provider should be chosen wisely 

The quality of your service provider impacts the quality of your software. A company with high-quality software development can boost the company’s productivity with great software. Therefore, any organization needs to be very careful in choosing or hiring a third party vendor. Always check the previous software development projects that these third-party vendors worked on and keep an eye on this software’s features like user experience, design, mobile functionality and software loading times. Choosing a vendor with a bad reputation will have a negative impact on your business operations. 

  • Always begin with a Test project

The company needs to sure about the capabilities of the third-party software developers before hiring them. You can always start working with them by assigning a trial project to have a better understanding of their skills and capacity and measure their performance. This trial project helps you understand their communication skills, time management and trustworthiness, based on which you can make a final decision.

  • Make use of performance monitoring tools 

To monitor the performance of the tech team, you can always make use of tools like Time doctor. It is a powerful productivity software that helps to track the work activity of employees. This tool helps you manage the outsourcing team by providing Time sheet reports, Web and app usage reports, detailed project reports, distraction management, payroll and inactivity timer. 

Following these crucial tips in your outsourcing process helps your company to maximize profit and improve software development efficiency. 


 The outsourcing and shared services market continues to expand in future because of the expertise and time-saving opportunities in software development processes. It is one of the easiest ways to boost your software development process. Budget saving is the main advantage of outsourcing software development. The significant savings include avoiding extra IT perks to retain employees, lack of onboarding, and equipment purchase.