7 Top Reasons for Outsourcing Software Development Services

Many people believe that there must be a strong reason behind IT leaders choosing to outsource software development.

Based on a study of Statista, it is found that 64% of IT respondents have outsourced software application development worldwide in 2017.

outsourced software application statista

Image Source: Statista

Being an app or software entrepreneur, if you are looking to develop software for your business and are not sure about outsourcing software development, then read this blog. We have discussed reasons why you need to consider outsourcing, and this will also clear all your doubts.

Let’s get started.

What is Software Outsourcing?

Software outsourcing is the business practice of hiring a 3rd party service provider. The provider manages all the tasks involved in a software development project. This practice is usually undertaken by entrepreneurs as a cost-cutting measure.


Suppose you are working on a short-term project for your company, and you are looking for professional software developers. The whole software development process of vetting, hiring, training, and management of experienced programmers will need a financial investment that can cost you high. Also, you need to invest a lot of your time.

Do you think this would be a smart idea?

No, right?

Instead of doing all this hard work, choose software development outsourcing. Hiring a third party means the software outsourcing company will do all the hard work for you in the defined timeline and less budget.

Also, check the following image to know the benefits of outsourcing.

benefits of outsourcing

Moreover, you need to accept that what’s new today is probably old tomorrow.

Therefore, to reach business goals faster and within the budget, companies are shifting their strategy towards software outsourcing services.

In fact, the global outsourcing market reached USD 92.5 billion in 2019. As far as global trends in information technology (IT) are concerned, software outsourcing is definitely at the top of the list. Now, let’s discuss the top reasons why outsourcing software development is beneficial for your business.

7 Reasons Why Outsourcing Software Development is Successful for Business

Here we have mentioned the 7 best reasons to consider software development outsourcing.

  1. Outsourcing is a Time Efficient Solution

  2. If you have a project with a fixed deadline or want to develop software quickly, choosing software development outsourcing is the right choice for you. As you do not have to hire an in-house development team that involves finding the right talent, hiring, and training, you can save a lot of time with software development outsourcing.

    Also, you don’t have to get involved in the process or spend time micromanaging your in-house team. Outsourcing means it becomes their responsibility to develop your software within the scheduled deadline.

    Therefore, with a professional software outsourcing company, it is ensured that your software will be ready to market, launch and use in a shorter time as compared to the in-house development team.

  3. Outsourcing is Cost-Effective

  4. If you have a small enterprise company or have a start-up business, outsourcing is one of the cost-effective solutions. It helps you avoid hiring an in-house software development team and instead choose to outsource software development effectively.

    Avoiding the internal team means you don’t have to spend money on the whole hiring process and additional overhead, such as operational, training, and management costs. Outsourcing your software requirements means you are paying only for the development of your product without any additional costs.

    Also, we have compared the in-house development team and outsourced team. Thus, you know how choosing an outsourcing team saves you time as well as cost.

    In-house TeamOutsourced Team
    Difficult to manage overhead expenses and salariesNo more need for managing the overhead expenses
    The slow and gradual product development processFast development
    May have the exact and narrow skillsHave a wide range of skills
    The company environment might be challengingCan work off-site as well as on-site as per your requirement
  5. Outsourcing Offers Flexible Solution

  6. Going for outsourcing means you have a wide pool of talented professionals to choose from. In fact, you don’t have to rely on only local software engineers for software development. With options located off-shore, you get to choose the leading software development companies located anywhere in the world.

    Moreover, with this flexibility, you can choose the software development team that fits your requirements. In fact, it is not even difficult to keep in touch with the dedicated team in this era where you have real-time collaboration tools like Skype, Zoom, Google Meet, and Slack.

    Several software development companies work both onshore and offshore. You can choose such companies to remain closer to the development team. This way, you can choose to work with both teams and get a great deal of flexibility.

    Want to Hire the Leading Offshore Software Development Company?

    Headquartered in the USA and operating from 2 other locations as well, Canada and India, Space-O’s onshore wide presence allows us to be more accessible for our clients.

  7. Scalable Solution with Outsourcing

  8. The best part about choosing software development outsourcing is that you don’t have to think about scaling your employees if you need any changes in your software development projects. This means you don’t have to worry about hiring or firing employees.

    Moreover, it is the best option when you require a full-scale development team or just a couple of software developers. You can always get the best team of outsourced developers for your software development project requirements. Hence, outsourcing your software requirements gives you the flexibility to work on various projects of different sizes.

  9. Outsource to Stay Focused on Core Business Functions

  10. Don’t you want to focus on the core part of your business, such as long-term goals, growth, and operations? Then choosing to outsource your software requirements helps you leave the job of coding and development on the experienced software developer.

    Software development outsourcing will reduce your workload and help you to do the most priority business tasks. This way, you can focus more on what is important for your business to generate ROI. Also, you don’t have to think about building and maintaining an in-house team of software development.

  11. Get Onboard Expert Talent with Outsourcing

  12. With technologies evolving every then and now, it is quite frequent that entrepreneurs look for specialized and skilled developers for their work. Despite having a good team of in-house developers, it is not always possible that they might be experts at everything. They might lack some skills which are required for your software project.

    Let’s take an example to understand this situation better. Suppose you want to build software that needs a face recognition feature, and for this, you need an experienced team that is well-versed with Artificial Intelligence (AI) and deep learning mechanisms.

    In such a situation, hiring a complete team for AI would not only take your precious time, but you will also need to spend a lot of money just on a single project of yours. Therefore, finding an outsourcing company with adequate experience in AI would help you to save time and cost and also help you to focus on your core business functions.

  13. Outsourcing Leads to Accurate Results & Project Timeline

  14. When it comes to scheduling your software project deadline and its results, software development outsourcing is the best option. Clear your deadline expectations with the outsourcing company and then proceed ahead with the software development process. This will help you to plan other aspects accordingly.

    Outsourced software development companies are more experienced in dealing with the timeframes and can assure you of the approximate timeline. Thus, choosing outsourced software development means you expect an accurate project budget, schedule, and reduce fewer risks of delays. In the end, you will achieve accurate results within the decided timeframe.

Want to Outsource Your Software Needs?

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Importance of Software Outsourcing [5 Best Case Studies]

You must understand how software outsourcing is helping various startups and enterprises before you actually know its importance. Therefore, we have shared some successful outsourcing cases along with the importance of opting for software outsourcing services. Let’s check all the case studies one by one.

  1. Outsourcing Quenched the Thirst of WhatsApp in Searching Enormous Talent Pool

    WhatsApp needs no introduction. It is a popular messaging app as more than 100 billion messages are being sent every day through WhatsApp. However, it was never the same with WhatsApp.


    Image Source: WhatsApp

    Back in 2012, WhatsApp had only 30 full-time employees and 5 part-time employees working with the company. WhatsApp started with $250,000 capital raised at the seed round, and this was very little to start the project.

    Business leaders of WhatsApp wanted to keep its costs down and find the best talents to match their expectations. To balance the quality with price, the company turned to East Europe, one of the biggest outsourcing hubs, to find the best technical experts for the development.

    Importance of Outsourcing: Software outsourcing services not only help you to reduce costs but open doors to reach an enormous talent pool. We think this is what matters when you start a new service.
  2. Outsourcing Let Basecamp Focus on Its Core Business

    Basecamp is one of the best project management tools that offer project management solutions. It lets professionals manage their work, communicate with the team, and share updates. However, at some point, when the company was at its peak, Basecamp faced major challenges while handling their teams.


    Image Source: Basecamp

    When others were taking benefits of using the Basecamp tool to manage their workflow, Basecamp was facing internal issues. When the issues went out of control, Basecamp decided to outsource some of the essential business functions to outsourcing companies so that they can focus on the core business part.

    Importance of Outsourcing: Choosing to outsource software development helps enterprises to focus on their core business functionalities. It is important to manage the workflow and drive internal improvements for business growth.
  3. Why Outsourcing Became the Best Choice for Slack in Its Early-stage

    Slack is another office collaboration tool that helps in creating different chats (communication channels) for the team members to view, message, and comment. Currently, Slack is used by over 10 million active users every day, and the users are expected to reach 79 million by 2025.


    Image Source: Slack

    When Slack was in its initial stage, it chose to outsource design and app development services. It is one of the prime examples of outsourcing cases. Just after 2 weeks of its launch, Slack managed to get more than 15,000 users and became a startup unicorn in 2014.

    Importance of Outsourcing: Slack’s case is the best example to show how a startup company can rely on software outsourcing companies to execute the project successfully.
  4. How Outsourcing Helped Alibaba in Removing Cross-border Barriers

    Alibaba is a famous e-Commerce giant that has also outsourced project development, including its website design and development work. Currently, it has more than 779 million active customers and has 1,492 billion in revenue.


    Image Source: Alibaba

    There was a time when the founder of Alibaba, Jack Ma, faced a lot of challenges while developing the website. There was a lot of scarcity of resources, including certain internet restrictions to use the websites in China.

    This was the time when the company started to look for outsourcing developers from overseas for their different projects. By hiring from overseas, the website development started growing at a pace. In fact, in 2014, Alibaba hit the record by becoming the largest IPO and raising $25B.

    Importance of Outsourcing: Even if you have certain restrictions while performing the software development process, overseas outsourcing can help you do the same thing in the minimum and expected timeline.
  5. Outsourcing Helped Google in Cutting Labor Expenses

    Google, too, needs no introduction. Being one of the top companies, Google still faced massive workloads and couldn’t handle the work pressure. At that time, Google had more than 89,000 in-house team members. Still, it wasn’t easy for Google to handle the workload.


    Image Source: Google

    Looking at the situation, Google outsourced global talents for its AdWords project to manage the workflow. In fact, it is found that in 2018, the number of Google’s contractors surpassed direct employees.

    Google shares that outsourcing helps them to reach the global pool of talents, cut labor expenses, and get the expertise that is lacking within Google’s walls. Also, it helps the company to skip operation costs and save money.

    Importance of Outsourcing: Despite having a team of professionals, if it is becoming challenging for you to maintain your work process, then outsourcing will help you to reduce your workload and skip operation costs.

    Still, if you have some doubts and want to know their answers, read the next section. Here, we have answered some of the most asked questions, such as what to know before hiring an outsourcing company or whether it is safe to outsource or not? To find more questions and their answers, read the next section.

    FAQ While Outsourcing Software Development Services

    What needs to know before hiring an outsourcing company?

    Here is the list of factors that you need to consider before choosing an outsourcing software development company.

    • Know your project requirements and outline the software idea
    • Check on features and functions that you wish to integrate into your software
    • Select an MVP (light app version) or a full feature product
    • Decide which platform you want to build your software on
    • The goal of your software; know your target audience
    • An approximate budget and deadline estimates

    What are the signs of a good software outsourcing company?

    • The company is responsive and replies promptly despite having different time zones
    • The company understands your requirements and gives appropriate suggestions
    • Outsourcing company shares its portfolio and discusses past software projects
    • Ready to sign an NDA agreement
    • The project manager has great communication skills and understands requirements in minimum times
    • Outsourcing partner knows latest technology stack for your project

    Will the software idea be safe if I choose to outsource software development?

    Yes, if you sign an NDA and choose reliable software outsourcing companies. This is an agreement that will make them legally bound to keep the sensitive information safe. They would not share or leak any information to a third party without your consent.

    How to select an outsourcing company?

    Here are the 11 factors that you need to consider while choosing an outsourcing company for your project.

    select an outsourcing company

    • Customers’ reviews and feedback
    • Experience and portfolio
    • The global presence and team size
    • Communication
    • Software development cost
    • Involvement of the company
    • NDA agreement
    • Software designing standards
    • Trusted QA measures
    • Software deployment
    • Support and maintenance

    What are the top software development outsourcing countries?

    • India
    • The United States
    • Philippines
    • Ukraine
    • Poland

    Ready to Outsource Your Software Project?

    In this blog, you have learned the benefits of software outsourcing development and checked some of the successful cases of software outsourcing to know its importance for a company.

    If you are stuck with your project and want someone who is experienced in developing software solutions, then contact us to share your requirements. We have experience in handling overseas software requirements, being a leading offshore software development company.

    So far, we have developed over 4400 mobile apps and 350 web-based solutions for the world’s leading enterprises and startups. Here are some of the best solutions that we have developed. Have a look:

    • Glovo: An on-demand delivery app to receive a total funding amount of $1.2 billion
    • Nuzhah: Ranked under top 20 apps in the category of ‘Travel’ on Apple App Store
    • TOR: A VPN app to be downloaded by over 100K users within a year

    Let’s talk. Let’s convert your project into a reality.

Author Bio
Jigar Mistry
Jigar Mistry
Designation: Vice President (Technologies)

Jigar Mistry is Vice President (Technologies) at Space-O Technologies. He has 14+ years of experience in the web and mobile app development industry. He has expertise in different mobile app categories like health and fitness, eCommerce, and on-demand.