Everything you Need to Know About Outsourcing Software Development

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

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

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

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
  • 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

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

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


 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.


  • 1 March, 2021
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