Leveraging the Top Benefits of Software Development Outsourcing

About The Author

Tracy-GardnerTracy Gardner Global Chief Marketing Officer
LinkedIn|19 Dec 2022

Software outsourcing is one of the practices that companies have been using to increase their ability to be more competitive and more profitable in an ever-changing digital world.  

Companies offload specific software development activities to an external provider to access the broader pool of skills, cut expenses, and develop fresh goods and services faster to get to market. 

Here is when a question arises—what are the benefits of software development outsourcing? 

We will find them in this blog. Let's dig deeper and explore everything about software development outsourcing!  

Understanding Software Development Outsourcing

Software development outsourcing, as the name suggests, is taking the services of a third-party organization to get your software developed instead of hiring developers in-house.  

These companies offer a complete package of software product engineering services which include design, development, and testing.  

One type of outsourcing company is an offshore software development company. This means outsourcing your work from a team of developers based in another country. 

Top Benefits of Software Development Outsourcing

Top Benefits of Software Development Outsourcing

There are literally many but here are some of the top advantages of software development outsourcing you must be aware of:  

  • Cost Savings  

This is undoubtedly the biggest benefit that comes out of outsourcing software development. It can help you cut down costs significantly, compared to hiring your own team of developers. Also, a lot of surveys indicate that for certain European countries, the cost of outsourcing from offshore companies, based in Asia, is more reasonable than in the same country. 

  • Flexibility  

During software development, you may realize that you need more or fewer developers than the ones that are currently working on the project. Both these scenarios can be a huge problem if you decide to hire an in-house developer team. 

Also, it is very difficult to accurately estimate beforehand any unexpected situations occurring midway through the project. To tackle this issue, outsourcing is the best solution as developers can be added or removed from your project as per your requirements.

  • Risk Sharing  

Risk sharing essentially means transferring the risk to a third party. It is an arrangement between the company and a third party where both share the risk of financial or other kinds of losses. 

  • Focused Strategy  

Removing the burden of building your software in-house gives you time and resources to focus on the core business strategy.  

It saves you from the challenging task of finding and hiring skilled developers and spending on their training and skillset if required.  

Alternatively, outsourcing companies already have a set of highly skilled developers at their disposal who can immediately begin working on your project and get it to the finish line. 

  • Time-Saving  

In this fast-paced world, rolling out your idea as a finished product as quickly as possible is one of the key factors in determining the success of your idea.  

Since outsourcing companies already have a pool of dedicated developers, you just need to build your idea and contract them for development.  

The development process will start promptly, and you will have a ready product soon based on the complexity. 

  • Improved Service Quality  

The developers working for these outsourcing companies are dedicated and skilled. It reduces your overhead to look for talented developers for your project. This is managed by the outsourcing company you are contracting with. 

  • Faster Time to Market  

The time required to build a product depends on its scale and the business use case. Outsourcing this development can accelerate the time required to roll out the product in the market, which would otherwise take longer for in-house teams. Being the first in the market with a unique service is another important factor of success, especially for startups. 


  • Sourcing Top Talent  

It is very difficult for small-scale companies to hire good tech talent for development.  

Additionally, the licenses and equipment maintenance required for development can become very expensive quickly for such companies. This is where outsourcing companies step in.  

These companies can provide the same development services to small companies that large companies can afford in-house. 

  • Futuristic Approach  

It’s not overselling to say that all companies need to be future-ready with the fast-paced changes coming about in the industry. 

An outsourcing vendor will have enough resources to weave the necessary technical advantages into your product. They will be able to gather the expertise required to build a future-ready product. 

Important Steps for Outsourcing Software Development & The Risks Involved

Important Steps for Outsourcing Software Development

There are a few necessary steps you must follow before you are ready to contact an outsourcing company for your software development needs.  

Let’s briefly go over them:  

  • Define your goals and write a scope statement 

Establish the overarching goals of your software development project first.  

In other words, are you aspiring to launch a new product, improve current software, or streamline the operation of your business?  

When you have your goals defined, elaborate on them in a scope statement. It is a document that describes all the project’s needs and goals, deadlines, and possible conditions upon which success depends.  

A good scope statement can be used as a reference that unites all stakeholders and can be referred to when the project details are being duplicated. 

  • Get a clear picture of what you need 

To reach a high level of technical sophistication, make sure to evaluate the following aspects: functionality, scalability, security, and user experience.  

Because of the technical complexity of the project, it is also essential to involve various stakeholders, subject matter experts, and other informed parties to come up with the list of critical features. This approach allows your own team to be well-prepared to communicate requirements to the potential outsourcing providers and speed up the entire process. 

  • Create a budget for outsourcing and set time expectations 

Create a realistic budget and timeline for any outsourcing project and ensure that you consider development resources and technology infrastructure.  

However, you must also take other equally important considerations such as ongoing support, the project's urgency, and time frames in accordance with your business goals.  

This way you maintain a budget framework and time boundary from which all resource allocation and decision-making would be based. 

  • Do a little research on which outsourcing works best: onshore or offshore 

Prior to choosing an appropriate destination for outsourcing, it is crucial to undertake extensive due diligence to compare the benefits and pitfalls of both the onshore and offshore models.  

So, the onshore model implies proximity, cultural fit, and potential regulatory ease but is costlier. In turn, the offshore model can result in cost reduction, access to world talent, and 24/7 development but might lead to problems with communication and quality.  

It is essential to assess your project-specific needs, budget constraints, and strategic aspirations to select the best method of outsourcing. 

  • Choose your outsourcing partner based on your research 

Choosing the right partner to outsource your software development is a crucial factor for the success of your project. Consider factors such as technical skills and experience, reviews, previous successful projects, and culture fit for the best results. Moreover, you can ask for case studies, client testimonials, and a portfolio of previous projects. 

Also, you should take into account other factors such as communication channels, project management methodologies, and responsibility, among others. This will help you find reliable and accountable companies with common goals who can provide customized solutions. Therefore, proper due diligence can help identify the ideal business partner. 

  • Sign a contract with them to get your project started 

After you have selected the outsourcing provider that meets your criteria, the next step should include formalizing your agreement with a comprehensive contract that specifies all the terms and conditions of cooperation.  

The contract should include a mutually acceptable project scope, objectives, deadlines, terms of payment, intellectual property rights, non-disclosure agreement, and conflict resolution procedures.  

To assure that your interests are secured, we recommend you consult with a legal specialist when drafting an outsourcing agreement. Establishing a sound contract will help avoid potential conflict and assure the successful execution of the project. 

Along with these steps you also need to keep in mind a few risk factors. These factors mentioned below might create issues for you or the outsourcing company before or during development. 

  • Hire the right software development outsourcing partner 

It is very important to carefully select the right IT staff outsourcing company that suits your requirements. For this, the most important step is conducting proper research.  

You can read the company website for its offerings, case studies, and history. Check their market presence on social media and third-party reviews of other clients. This will ensure you are selecting a trustworthy company with a proven background. 

  • Importance of effective communication

Another disruptive factor that can drastically affect the time and costs of development is communication. You need to make sure all your requirements and feedback are properly shared with the developers. Even a slight error can result in a major difference in the outcome. 

  • Avoiding cost overruns 

Some vendors might have hidden costs for some services. Also, you might get some ideas in development which might overshoot the cost. It is best to set a strict budget before starting and check with the vendors for any hidden costs. 

  • Quality control 

Since the development team will likely be remote, it is difficult to supervise the work. Make sure to schedule regular catchups to check for the quality of development and catch any discrepancies on time.


Outsource Software Development with VLink

VLink is your trusted partner for innovative solutions specializing in software development projects. We have more than 18 years of experience and a track record of providing high-quality software products to ambitious businesses on budget and on time. VLink combines leading talent, advanced technologies, and industry best practices to ensure your success. 

Our highly skilled and dedicated team of professionals work closely with our customers, allowing us to better understand their needs and subsequently design solutions that surpass expectations.  

If you are a growing startup or a large corporation looking to tap into resources more effectively, we provide a scalable and cost-effective outsourcing approach. Our support is your key to effective software development—contact VLink today. 

Frequently Asked Questions
What is software development outsourcing?

Software development outsourcing can be described in simple words as hiring a third-party service provider to work on software development projects for a limited time or longer. The services can vary from building software for your business to running your business, or even building, maintaining, and updating software for your customers long-term. 

What to look for when outsourcing software development?

You should always consider the industry experience, technical expertise, quality assurance and security, culture, and cost.

How does outsourcing improve performance?

The strength of business focus is usually enhanced. Furthermore, it enables management to strategically direct staff energies. As a result, “firefighting” is dramatically decreased, and when staff are not preoccupied with day-to-day processing and administration, they can function more efficiently, as expertise, role and function are not catabolized. 

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