When Should You Consider Outsourcing Software Development?

Outsourcing software development has been a strategic approach that has been adopted by many companies to not only fill in any technology gap but also to take advantage of lower pricing in offshore locations. Outsourcing is not a new approach and businesses have been dependent on it since the early 80s. 

Still, outsourcing is one of the most talked about business strategies and many still have their inhibitions and questions around whether to outsource, what are the benefits, what are the risks, when is the right time, how to find the right software development company, etc. 

In this article, we are going to talk about the benefits of outsourcing and when is the right time to outsource software development. 

What are the key benefits of outsourcing software development?

Outsourcing is not just offloading your work to another company in an offshore location. There are many benefits of outsourcing software development – 

  • Increased strategic focus on the core business functions: While the outsourcing partner is focusing on building your software product, businesses can focus on their core business functions including the growth areas. 
  • Cost reduction: One of the benefits of outsourcing is cost reduction. If a business’ objective is to minimize software development costs, then there is no better option than a well-planned outsourcing. 
  • Access to latest technology: If your business requires advanced and latest technology, then building such expertise in-house will be very expensive. This is where outsourcing to a specialized technology partner scores over in-house development. The outsourced company’s technology stack allows businesses to integrate state-of-the-art features and functionalities at fraction of a cost to develop these in-house.
  • Adjusting to project demand: Outsourcing provides benefits of adding scope and team members depending on the demand. Working with an in-house team has its challenges of scaling up or down quickly due to legal and regulatory issues regarding employment. Outsourcing provides business flexibility to scale the team up and down very quickly as per your software demands.

Outsourcing also has its fair share of challenges such as communication issues, cultural differences, improper project management, inability to handle big projects, etc. However, the benefits of a well-planned outsourcing strategy outweigh the challenges. 

When outsourcing software development makes sense?

Outsourcing could play a strategic role in your business if you –

  • Need tech experts from global companies to supplement your in-house core team
  • Have hiring limitations due to lack of budget to hire in-house tech teams across different expertise such as design, development, QA, project managers, et al
  • Need to focus on your core business competencies rather than worrying about software development
  • Need to scale up the product after doing a prototype to test the market. Scaling up requires skilled resources across multiple teams such as server, security, maintenance, etc along with the usual development teams
  • Need to modernize the existing tech infrastructure with latest technologies

When to outsource? 

Once you have identified the need to outsource, the key question that needs to be addressed is when to outsource software development. Outsourcing makes sense for your business if –

  • Your region does not have the required skills or are unavailable due to existing demand scenario of such talent
  • Your team does not have additional bandwidth and hiring new resources is not a near-term option due to limitations around onboarding, employment challenges, etc
  • You have budgetary constraints around adding new resources to handle constantly changing technology stack
  • You are not able to focus on your core business competencies as management and monitoring of any project in-house is time consuming and challenging
  • You want a quick turnaround time and do not worry about hiring, training and other issues associated with in-house hiring. Most outsourced companies can start working on your projects right away, build an efficient roadmap and stick to strict deadlines to deliver your projects on schedule
  • You want to focus on costs. Outsourcing software development is an effective way to reduce overall development costs. This is mainly due to the pricing differential across different regions – Asia/Eastern Europe ($15-30/hour), South America ($30-$45/hour), North America ($80+/hour). 


Outsourcing your software development needs is a tough decision involving many variables. Many businesses have been successful in outpacing their growth objectives and scaling up with the help of outsourced partners. A right software development partner can be a game-changer for your business. If you’ve any doubts related to software development and if you need assistance developing one then feel free talk to us here.


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