Software development outsourcing pros and cons

Abto Software
5 min readMay 9, 2022
Software development outsourcing pros and cons by Abto Software

Outsourcing of software development is all the rage these days. More and more companies are resorting to the new, revolutionary business strategy. These include both start-ups and corporations. Among the most famous today are Google, Alibaba, WhatsApp, Skype, and more.

But why exactly is the outsourcing of web and mobile development so skyrocketing? Why should business leaders consider switching to this business strategy?

Sourcing skilled software engineers as a global trend

According to Statista reports, the size of the outsourcing market is valued at over 92 billion US Dollar in 2022. Experts predict that the total spending on professional IT services could reach a whopping 1.2 trillion US Dollar by the end of the year.

Software development, quality assurance and management are the fastest growing occupations in the US. According to the Bureau of Labor, the demand for talented IT specialists will grow by 22% by 2030.

What exactly is outsourcing?

The top outsourcing industries include banking and finance, healthcare, automotive, transportation, etc. Leading companies in the mentioned industries turn to this approach to provide better service, maximize profit, and stay highly competitive.

For a present-day business aimed at increasing productivity and profit, headhunting, interviewing and hiring internal employees for every single process is an inefficient solution. Certain processes can be easily delegated to experienced external contractors.

The full term “outer-source-using” means attracting necessary resources from outside. In simple words, outsourcing is the task-oriented involvement of talent to cover non-core functions.

Outsourcing of software development means having custom solutions delivered by a contracted third party. Commonly, this also includes the design of the solution’s architecture, quality assurance, and support.

What are the models of software development outsourcing?

Outsourcing software development models compared by Abto Software

These are the main three models of outsourcing:

  • Project-based model

This model implies cooperation within a specific project. Software developers and other IT specialists are hired to cover specific tasks until the final launch of the delivered product.

  • Dedicated team

Within this cooperation type, the chosen outsourcing company is responsible for providing suitable specialists. These specialists are introduced to cover the client’s long-term projects.

  • Staff augmentation

Within this cooperation model, the contacted staffing organization is responsible for headhunting and hiring. Staffing organizations are agencies, which specialize in headhunting, interviewing, hiring and onboarding suitable talent in the shortest term, commonly for long-term projects.

The staff augmentation model is the perfect solution if you are planning on adding-on to your internal team. Using staff augmentation services, you can quickly find experienced professionals to cover web development, app development, design, etc.

Outsourcing models compared by responsibilities by Abto Software

The pros and cons to consider before hiring

The benefits of delegating certain processes to professionals

The main outsourcing benefits:

  • Cost and time efficiency

By cooperating with external web and mobile developers, the client saves time and money. External resources are directed to tasks, such as computer programming, allowing leaders to focus on the managerial processes.

  • Access to a global talent pool

By hiring remote contractors, the client gets access to the top skilled software developers all around the globe. Relying on external employees allows owners to benefit from field-specific expert knowledge and experience.

  • More flexibility

By implementing outsourced development as a business strategy, companies become increasingly flexible. Delegating certain project tasks means being able to adjust to sudden changes.

  • Increased productivity

By contacting outsourced developers, companies reduce the workload of overwhelmed internal employees. Delegating projects means freeing up time to focus on internal, day-to-day challenges.

The pitfalls to keep in mind

The biggest outsourcing pitfalls:

  • The need for constant progress monitoring
  • The complexity of introducing an employee into the company culture
  • The impossibility of assessing the potential of professionals being attracted
  • The risk of misunderstanding between internal and external team members

Outsourcing of software development vs hiring freelance engineers

One alternative to outsourcing is contacting a freelancer who works for himself and is completely independent. If you’re a start-up or a young company that’s just getting started, a freelancer might be an inexpensive, efficient solution to your business needs.

One of the most important benefits of hiring independent contractors is the low cost of the service provided. But one should remember the shortcomings that come with it.

One of the risks to consider is the complete uncertainty. By involving a freelancer, you risk losing investments, time, customers, and reputation. Another risk is oftentimes missed deadlines. Usually, freelancers are not very reliable when it comes to being consistent.

One more major nuance to consider is that only outsourcing can guarantee high scalability. Hiring freelancers means the complete opposite. By outsourcing your project, you can involve additional business analysts, software developers, and QA or DevOps engineers if your business needs are changing. A freelancer can’t provide such benefits.

Outsourcing of web and mobile development: Step-by-step guide

Step 1. Assess the future project and outline your expectations.

What are your goals? Determine your project’s budget, the timeline, and the product’s functionality.

Step 2. Choose the cooperation model that suits your needs.

Staff augmentation, dedicated team, or project-based cooperation model to cover your specific project needs? Make time to learn more detailed information about the pros and cons of software development outsourcing as well as its various models.

Step 3. Choose a reliable partner and read the contract.

Make sure the company you choose has an impressive portfolio of innovative tech products and mostly positive feedback from its former customers.

Step 4. Make communication a priority.

Don’t forget, it’s all about communication when hiring external employees. No communication, no success!

Final thoughts

There is an opinion that in today’s times of globalization and constantly increasing digitalization, being a narrow-profile specialist is not paying anymore. We will take the responsibility to disagree with this statement. The narrower the specialization, the higher the expertise and deeper the knowledge. And being a professional means being highly demanded.

Are you looking for a software development vendor with over 15 years of experience in this dynamic industry? Consider transferring the software development process to a trusted company with deep field knowledge in AI, ML, CV, blockchain, ERP solution development, and a strong, enthusiastic R&D department.

Abto Software is an outcome driven, dependable partner to bring your complex, revolutionary projects to life. We provide project management, business analysis, software development, quality assurance, and more.

Our engineers are dedicated, narrow-profile specialists aimed at delivering robust, one-of-a-kind products. Bringing clients to a new level is our main goal.

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