Software Development Outsourcing 2023 [Comprehensive Guide]
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Gulshan Chandan

March 10, 2023
  • Outsourcing Development

What is the first thing that comes to mind when we think of software development outsourcing? In most cases, it appears to be delegating your projects and services to some IT company or professionals. But it has much more to it.

For small and medium-sized companies that are expanding quickly, outsourcing software development services can be a true game-changer.  Why? Because it saves time, and money and speeds up your software development.

It could seem a little uncertain and stressful if you’ve never worked with a software development outsourcing company. It makes complete sense! When your business’s overall performance is at stake, putting your trust in another organization to provide the outcomes you want becomes a significant decision.

Have a look at these figures, and you will know why software development outsourcing is the right decision for your business. By 2027, it is predicted that the BPO outsourcing market will be worth US$405.6 billion overall.

This blog post will cover the fundamentals of outsourcing, its advantages, as well as the process and expert tips on how to succeed by outsourcing.

Outsource With Confidence: Let Us Handle All Your Software Development Needs!

What Is Software Development Outsourcing?

Outsourcing software development involves giving a software development project to an outside company rather than handling it internally. The software outsourcing process begins when companies outsource their software project to a third party or another company.

what is software development outsourcing

Software Development: In-house vs. Outsourcing

Earlier it was quite simple to distinguish between internal teams and outsourced professionals that work remotely before remote work became popular. That is not the case anymore. Now, you are able to share a co-working space with the software engineers you hire from a tech partner while also having an internal staff operating out of different countries.

The true distinction between in-house and outsourced software development team may be found in the hiring strategy. You hire internal engineers, designers, managers, etc., and assume all the costs and liabilities related to hiring, payrolls, employee retention, and other factors. But you can hire an entire team or buy entire projects from another company under a separate hiring model. And this has a variety of advantages, from reduced development costs to quick project completion and access to a larger talent pool.

Let’s go over these and many other reasons why businesses choose to outsource custom software development and discover how this works to their advantage.

Why Do You Need To Outsource Software Development?

There are multiple reasons for this such as not enough time and resources, inadequate skills, approaching deadlines or not having an IT infrastructure. Take a look at in detail:

  • You are Limited by Finances

    One of the primary justifications for outsourcing software development is a limited budget. This model offers businesses the flexibility they require when looking for project development alternatives that are within their budget, of course, without sacrificing the quality. Companies outside of the technology sector, with little to no prior experience in software development, benefit the most from outsourcing.

  • You want to reduce expenses

    Companies in both the tech and non-tech sectors use outsourcing to hire top software engineers from around the world for less money than they would have paid for internal hiring.
    When compared to hiring an internal development team in the US, Australia, Canada, or Western Europe, working with a remote development team from a reputable outsourcing country (like India) is typically less expensive.

  • You require a temporary scale-up or you’re on a strict deadline

    Finding a reputable tech provider with the required skills takes less time than building your full in-house team. Many companies with a quick launch have found success with outsourced software product development. Nonetheless, both SMBs and enterprise-level businesses place a high priority on efficiency and frequently use outsourcing to expedite projects.

  • You lack the necessary internal capabilities or skills

    Outsourcing is a tried-and-tested method for getting access to top engineers who would be difficult to recruit in your country. If you are experiencing a tech skills shortage and are unable to scale as quickly as you would like to, this model is the perfect solution for you.

  • You lack IT infrastructure management

    Smaller companies find it challenging to manage their IT infrastructure, technology requirements, hardware and software maintenance, and other development-related tasks. Businesses can manage their entire IT infrastructure with outsourcing. They have IT administrators and experts who oversee the servers around the clock to ensure your product never experiences downtime.

    The top countries for offshore software development are India, China, and Ukraine, with India alone accounting for 55% of the global outsourcing market.

What Are The Benefits of Software Development Outsourcing?

benefits of software development outsourcing

Outsourcing software development offers numerous benefits such as achieving short deadlines, access to talented professionals, low costs, and even saving time. Read further to understand the key benefits of outsourcing:

  • Access to Global Talent

    Outsourcing enables businesses to tap into a global pool of talent, allowing them to work with skilled developers from around the world. This means that businesses can access top-notch talent without being restricted by geographic location, which is especially important in today’s digital world.

  • Specialized Expertise

    Outsourcing partners often have specialized expertise in specific technologies or domains, enabling businesses to benefit from their knowledge and experience. This means that businesses can access a range of skills that they may not have in-house, leading to better software development outcomes.

  • Reduced Time-to-Market

    Outsourcing allows businesses to accelerate their development processes and bring their products to market faster. This is because outsourcing partners can often work around the clock, which means that businesses can achieve faster turnaround times than if they relied solely on an in-house development team.

  • Cost Savings

    Outsourcing software development can be cost-effective, especially when compared to the cost of building an in-house development team. Outsourcing can save businesses money on overhead costs, salaries, and benefits, and can allow them to scale their development resources up or down as needed. Outsourcing helps companies to reduce their costs by up to 60%.

  • Focus on your core business

    This is the biggest advantage of working with an outsourced software development company. Since you hand over your software solutions development responsibilities to an outsourcing team, you get more time to pay attention to your core business and this leads to higher scalability and growth.

  • Get rid of Micromanaging

    You always need to manage things with your development team, such as monitoring the progress, absenteeism, reminding the staff of their responsibilities, etc. Employees thus prioritize reporting over-performing their duties. When you hire a software development company, you only need to communicate with the project manager who handles everything relating to your project.

    Need to Scale Your Software Development Quickly? Outsourcing Can Help.

What is the Software Development Outsourcing Process?

software development outsourcing process

This process highly depends upon the outsourcing partner you choose for yourself. It is recommended that you employ a software Development Company that follows an agile development methodology. Based on that, the development process can be defined as:

  • Project Requirement Gathering

    After analyzing your company’s capabilities, you must decide what it is that you are seeking. That will assist you in determining the type of software developer outsourcing you require. It’s critical to refrain from moving straight to a solution in this step.

  • Designing

    The design work begins after accurately documenting the project requirements. In this step, you should choose whether your time would be better spent developing original software or purchasing pre-made solutions.

  • Development

    During this stage, the specialists turn the project’s requirements and designs into a usable product. In this stage, engineers build back-ends, front-ends, microservices, databases, or other components.

  • Testing

    During the testing phase, test analysts carry out a few validation tests to see whether the software satisfies all criteria. This covers manual testing, performance testing, functional testing, unit testing, and security testing. The primary objective is to ensure that the developed product is reliable enough to meet your demands.

  • Deployment

    In this process, the software is finally deployed to the platforms and operational settings from where it will be running. These settings could be a server in the company’s data center or a cloud-based platform.

  • Maintenance

    The software is delivered to the developers for ongoing maintenance during the maintenance stage. The product is frequently updated to improve performance and satisfy the evolving needs of its end customers.

What is the Cost of Software Development Outsourcing?

This highly depends upon the chosen outsourcing partner and engagement model chosen by both parties. Several elements are crucial in deciding the cost, such as:

  • Location of the remote workforce
  • Standing and credibility of the provider
  • Technical requirements for the software being developed
  • The teams’ skills
  • Terms and Conditions of the project.

North American service providers and agencies are the most expensive for outsourcing software development. India is favored by most businesses and consultants for outsourcing because of the affordable yet skilled pool of talent of the country. The outsourcing costs vary between $ to $ depending upon the scale of the project, the tech stack employed, and the skills of the developers.

Expert Tips and Strategies for Highly Successful Outsourcing

expert tips software development outsourcing

More than 94% of companies are using outsourced IT services in one form or another. Don’t get left behind! Here are some useful tips to assist you in reaping great outcomes from successful IT outsourcing:

  • Define Your Requirements Clearly

    The first and most important step in outsourcing software development is to clearly define your requirements. Make sure that you have a clear understanding of what you want to achieve, what features and functionalities you need, and what your budget and timeline constraints are. This will help you find the right outsourcing partner and ensure that you get the desired results.

  • Choose the Right Outsourcing Partner

    Choosing the right outsourcing partner is crucial to the success of your software development project. Look for a partner who has experience in your industry, the technical expertise you require, and a proven track record of delivering quality work on time and within budget. Consider factors such as communication, cultural fit, and geographic location when selecting your partner.

  • Leverage Agile Methodologies

    Agile methodologies can be highly effective in outsourcing engagements. This means breaking the project down into smaller, manageable pieces and delivering incremental releases. This approach allows businesses to adapt to changing requirements.

  • Establish Clear Communication Channels

    Clear communication is essential for the success of any outsourcing project. Establish clear communication channels with your outsourcing partner, and ensure that you have regular meetings and progress reports to stay on top of the project’s status. Use collaboration tools such as Slack, Trello, and Asana to facilitate communication and ensure that everyone is on the same page.

  • Set Realistic Expectations

    When outsourcing software development, it’s important to set realistic expectations. Understand that outsourcing partners may have different work cultures, time zones, and language barriers, and adjust your expectations accordingly. Be realistic about your budget and timeline, and work with your outsourcing partner to set achievable goals.

  • Create a Detailed Project Plan

    A detailed project plan is essential for the success of your outsourcing project. Create a plan that includes a timeline, milestones, and deliverables, and make sure that you and your outsourcing partner are aligned on the plan. Regularly review and update the plan to ensure that you stay on track.

  • Protect Your Intellectual Property

    When outsourcing software development, it’s important to protect your intellectual property. Make sure that you have a clear contract in place that defines ownership of the code, and ensure that your outsourcing partner signs a non-disclosure agreement. Use secure collaboration tools and ensure that your outsourcing partner follows best practices for data security.

  • Conduct Rigorous Testing

    Rigorous testing is essential for ensuring the quality of your software. Make sure that you have a comprehensive testing plan in place, and conduct testing at every stage of the development process. Work with your outsourcing partner to ensure that they have the necessary testing resources and follow best practices for quality assurance.

  • Maintain a Strong Relationship

    Maintaining a strong relationship with your outsourcing partner is crucial for the long-term success of your outsourcing project. Treat your outsourcing partner as a strategic partner, and work to build trust and mutual respect. Provide regular feedback and recognition for their work, and be open to their feedback as well.

Why Work With Technocrats Horizons For Software Development Outsourcing?

Technocrats Horizons offers a collaborative atmosphere, top-notch skill set, and quality work ethics as a leading outsourcing software development company. These significant distinctive qualities form the basis of our business.
You can rely on us as your go-to software development outsourcing services partner to provide cost-effective and high-quality products quickly. We use best practices when working on software development projects, from building interactive mobile applications to scalable websites. Our outsourcing capabilities go beyond just software development to design services, eCommerce solutions, and tech products.
These are just a few of the ways we distinguish ourselves as one of the best outsourcing businesses for software development.

Software Development Outsourcing-Conclusion

Outsourcing software development includes both notable achievements and failures, just like any other service. We’ve compiled important factors and tips in this post for you to steer clear of a bad outsourcing experience and get a high-quality software development experience.
Now, you have the right reference if you decide to outsource your software development. If you can locate a reliable software development outsourcing company, then viola! After a few months, you’ll have a fully functional, commercially viable website and/or mobile app while staying on budget. Technocrats Horizons is one of the leading software outsourcing companies, make an appointment with us for a consultation to start the magic.

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About The Author

Mr. Gulshan Chandan, Customer Experience Head of Technocrats Horizons Compusoft Pvt. Ltd, is the driving force behind the company's success. With over a decade of experience in the industry, he is on a mission to redefine what it means to deliver exceptional customer service. Mr. Chandan is passionate about building lasting relationships with customers and is always looking for ways to go above and beyond to ensure their satisfaction.

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