Everything You Need to Know About Outsourced Software Development

Outsourced Software Development

Imagine,  as a Business Leader you are solely responsible for making decisions at a lightning speed and even the smallest delay can cost you a lot.

IT development isn’t a small rock to move when you don’t have a tech team in place and you have to build it from scratch.

Today, we are in the 21st century and have access to a lot of options to choose from. And, considering IT development, building an in-house IT team isn’t the only option to rely on.

Rather, you can choose to outsource software development and hire experts to get the best software developed for you in the said time.

The Software Development Outsourcing industry is expected to grow by 70% by 2023, as companies are projected to outsource at least 36% of their software developers – Commit.

Yes, there are further threads to explore on when is the right time to outsource development or how to choose the right software development outsourcing company, and so on. Let’s drill down to the details.

What is software development outsourcing? 

Software Development Outsourcing is an act of adopting external expertise as an extension to your in-house team, to execute a crucial task.

For example, imagine you are a manufacturing company and you need to develop business software to automate your business operations.

Instead of onboarding fresh hires to your company to do the job, you decide to hire an outsourced software development partner to do the job as an extension to your in-house team.

Why should you consider outsourcing software development? 

A plain and simple answer to this would be, expertise!

With minimum to no technical background, how easy do you think would it be to build a team of IT professionals?

Getting access to professional expertise without hiring them as full-time employees on your team is a super-power indeed. And, you should use it to the fullest capacities, don’t you?

Let’s understand why it’s a good idea to outsource software development.

Access to the global pool of Expertise: 

It’s the most appreciated privilege that you get access to when you choose to outsource software development.

Instead of looking for tech talent that is accessible and close to your geographic location, you can go beyond and choose to work with a highly skilled and professional team of experts who can be an extension to your in-house team and work remotely.

A perfect blend of Innovation and Optimum Rates 

As you are exploring possibilities, there are high chances of you finding better options at even better prices, though expertise is the primary objective, who wouldn’t appreciate the leeway on cost savings?

Approaching outsourcing options from broader geographical regions will open up new avenues for you. India and Eastern Europe are renowned software development hubs and can be great options to consider.

Experience creates a drive for innovation. Working with outsourced partners who have already worked on similar projects, you can leverage their capabilities to achieve the invincible.

Micro-management – Forget about it! 

You don’t need me to tell you how big of a pain in the neck micro-management becomes when addressing a team of developers with the business logic. It becomes repetitive and cumbersome when things start falling off.

When you work with an outsourcing development partner, you can simply explain the business logic to the Project Manager and sit back!

A project manager is solely responsible for managing the complete software development on your behalf. Right from choosing the right set of people, setting up milestones for delivery, and budget estimations, everything will be taken care of, of course with your approval.

Scale Up & Down 

How quickly can you scale up and down your in-house team, in terms of size? It’s difficult both ways, isn’t it?

Well, this is the liberty that comes along with outsourced software development.

When you start working on a development project, you have certain milestones and success coordinates to achieve. For sure, the team is going to put up everything to meet the expected scope.

There are trivial cases where the scope may vary; it may shoot up or even get off the track, at times.

It comes easy to scale the team size up or down with an outsourced development vendor. Wherein, if you compare the same scenario with an in-house team, it’s more difficult than you could imagine.

All you need to know about Software Development Outsourcing Models 

Yes, working with an outsourced development team is easier than building an in-house development team for well-deserved reasons.

At first, you need to understand how outsourced development works and what are the different outsourcing models.

Let’s understand the 3 most used outsourcing models: Time and Material, Fixed Price, and Dedicated Team.

Time & Material Model: 

This is the best fit for small to medium-sized projects where requirements are not frozen. With this type of setup, you pay collectively for the work done.


  • It offers flexibility in terms of requirements, and you can change them at any given time to achieve the desired output.
  • It enables client engagement at different development levels with due diligence to agile methodology.


  • Budget estimation becomes a pain as the scope of the project changes.
  • Time to market is a question with the slow and ever-changing development needs, considering the involvement of multiple stakeholders.

The Fixed-Priced Model

As the name suggests, the Fixed-Priced model is the perfect fit when you are very much clear about what you want.

Before engaging in the contract, you and the outsourced development partner have to agree upon common terms of requirements, scope, delivery, and price, because there is no way to turn back!

This type of outsourcing model works best for small-sized projects.


  • You get what you ask for at the optimum budget that you set forth.
  • Quick turn-around and faster time-to-market with the specified scope and deliverables.


  • You can not introduce new changes or features at the eleventh hour when project requirements are frozen for once.
  • Risk Assessment is a big question that stands tall.

The Dedicated Team Model:

The Dedicated Team Model is as good as having an in-house team of employees working for you. You pay monthly remuneration to the hires that are engaged with your project, throughout the project.

This type of outsourcing model is perfectly suitable for projects that are relatively larger and have unambiguous requirements.


  • You are the authority in charge and have full control over the dedicated team and scope.
  • No headaches caused for you in scouting the right talent and managing the team. The project manager from the outsourced development team takes care of it.


  • Unambiguous requirements can backfire at times and you may experience a deviation in the actual results than what was expected.

Your choice of outsourcing development model solely depends on the type of your project, business logic, the scope of the project, and the budget constraint that you are considering.

How to set up a solid outsourcing strategy?

What do you expect from an outsourced software development partner?

Core Expertise?

A clear understanding of requirements?

Risk Assessments and Mitigation Planning?

Clean Execution?

Faster time to market?

The list is long enough to consider, but there is something that you have to do at your end before you engage an outsourced software development partner thorough planning and outlining of a clear outsourcing strategy for your project.

Trust me, if you ace this, your project can never go wrong. Because, modules and codes can be fixed, but there is no scope to fix the direction once gone wrong.

Here are a few pointers to map a great outsourcing strategy.

Know what you want and write it down:

Before you write even a single line of code, you should know what the output should look like and you can’t fail to paint the same picture in the eyes of the team who is going to do the job for you.

Be picky while you choose an outsourcing partner and have your parameters aligned. Always put expertise and testimonies before costs and promises.

Create a differentiator between what to outsource and what not to:

Create a clear differentiation to gauge what you exactly want to delegate to your outsourcing partner. Going up with a full-fledged software development outsourcing wouldn’t be a great choice when you know your in-house team can perform the development part with an authority in consulting nature.

If that is so, invest in good consulting services to support your team. It would be just fine if you choose to outsource tasks one after another, and not all at one go.

Build the right Technological Profile:

When you work with an outsourced development company, it’s usually a remote setup that you opt-out for. It’s highly essential to sync the technological profile for both parties to avoid any sort of data leakage or discrepancy.

Security and Data Protection should be the priority while setting up technological profiles to avoid further mishaps.

Negate the space for cultural dispute:

Working with an outsourced development team, there are high chances that your in-house team might develop a negative vibe around their job function.

Make sure you establish a clear channel for communication where all the outsourcing goals and results are conveyed and known to all. This shall help you negate the cultural gap that might sneak in while working with both outsourced and in-house teams.

Closing Notes

Working with an outsourcing software development company is anytime a great deal to have when you are working with the right outsourcing partner with clear business objectives. Remember this is the secret sauce to spice up your success.

If you are looking to outsource software development, let us know. Let’s bring your idea to life, together. Reach out to us and we shall get back to you within no time.


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