Advantages and Disadvantages of Outsourcing Software Development For Business

Software outsourcing, in addition to being a cost-cutting measure, can be a significant source of innovation and growth in both early-stage companies and large corporations. According to IBM, only 27% of businesses use outsourcing to reduce costs, while 36% use it to optimize business development and boost innovation.

So, companies of all sizes can benefit by joining hands with an excellent offshore software development company that can bring a fresh perspective and new ideas exactly when they are needed, without depleting all available capital.

You might be surprised to learn that some of the world’s most successful companies, such as Skype, Slack, and Alibaba used or continue to use outsourcing to get started.

What drives businesses to consider outsourcing as part of their business strategy? Since it’s always good to make an informed decision, let’s dive deeper into this short guide to the pros and cons of outsourcing software development.

Advantages of Outsourcing Software Development For Business

Businesses outsource overseas as a key strategy to remain competitive and consolidate their market position due to lower costs. Furthermore, a successful transition to outsourcing software development can assist organizations in realizing their true value. Let’s discuss how outsourcing software development proves advantageous for businesses.

1. Faster time-to-market

Offshore software development firms work within the frameworks of the Scrum and Agile approaches, establishing the necessary priorities to achieve the desired results. This significantly reduces the time to the market parameter and meets the required framework for delivering the project to real users.

2. Don’t need to manage a team of developers

You are no longer responsible for the recruitment, management, and quality control of a development team. You will not only save time by avoiding all of the hiring and training processes, but you will also get your dream software development team!

3. Access to a talented pool

When you outsource your software development project, you gain access to some of the best software development experts. They can significantly improve your company’s performance and software quality by implementing the necessary expertise and utilizing their unique set of skills to deliver outstanding results.

4. Expertise in innovative technologies and the latest tech stacks

Getting access to the technology stack, aside from talented developers, is definitely an advantage in outsourced software development. Machine learning, automation, and the Internet of things are only some of the most used in IT projects, and using them in yours would attract more customers to your business.

5. Reduced risk

The most important factors in any project are risk assessment and analysis. By utilizing software testing services, you can ensure that the software you introduce to the public or your employees is defect-free, and it runs smoothly.

6. Cost-efficient

According to a Deloitte 2020 study, 70% of companies that outsource software development projects do so to save money. It takes far less time and money than building your own team. As a result, you get your solution faster and at a lesser cost.

7. Support and maintenance

Your development team has produced high-quality software or an app. But you don’t have the resources to support it right now. So, what should you do? These responsibilities can be delegated to an outsourcing company. Its experts provide continuous updates and technical support for your application.

Disadvantages of Outsourcing Software Development For Business

Following the benefits of software outsourcing, let us look at the potential drawbacks of business development. This may not apply to all businesses. However, with today’s technology, all of the disadvantages of outsourcing can be easily overcome by partnering with the right software development company. Hiring a contractor too quickly can lead to the following outsourcing software development pitfalls:

1. Poor communication

Communication is slowed to a halt when work hours do not overlap. With multiple days required to send even the most basic of messages, you’ll struggle to stay on top of the project and keep everyone updated on its progress.

2. Hidden costs

Although cost-effectiveness is one of the benefits of outsourcing software development, many businesses have been hit with unexpected costs. Be wary of companies that charge hidden fees for project management, administrative support, and other services.

3. Lack of control of the project

Outsourcing development services require you to give up some control over the project when compared to working with an in-house team. This can be difficult for those who enjoy being in charge and having a say in every aspect of a project.


Outsourcing is already a common practice among the software industry’s biggest names. Smaller businesses are now following the same, and other companies all over the world are taking notice.

Finally, there are many advantages and disadvantages to outsourcing your software development projects. The benefits and drawbacks of outsourcing software development will differ depending on the project. If the benefits of outsourcing outweigh the drawbacks, then begin by partnering with a reputable software development firm.

However, if the disadvantages of outsourcing outweigh the benefits, we recommend that you consider partnering with a company that has a management style similar to yours. This way, you can be confident that your project’s vision will be understood and carried out correctly.

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