Today every aspect of life is digitalized, from buying a new car to setting up a trust fund online. Nearly 70% of businesses have digitalization strategies. The market of apps is enormous, and the Google Play market uses thousands of apps in a day. Several owners do not understand the existing offer won’t satisfy them entirely. Therefore, they need to opt for custom software development. Software development is an excellent process to allow the company to design and produce the solution they exactly need.  Let’s dive in to get a better understanding.

What is Software Outsourcing?

Software Outsourcing takes place when companies need custom software solutions to develop by third-party. It comes with several advantages that include cost reduction, mitigated risk, improved efficiency, and enhanced security. In this time, an extensive business landscape can access the world’s top software developers.

Based on the statistics, the global IT outsourcing market amounts to 66 billion US dollars. It predicted that the market could grow USD 98 billion during the forecast period of 2020 – 2024. Additionally, the technology is evolving at lightning speed, where companies must keep on evaluating and adapt to new business trends towards a cost-effective business model.

Why is Software Outsourcing Important?

It’s cost-effective and helps lower development costs, which translates to low market prices with enhancing competition. The days are here when IT decision-makers and business owners turn to Outsource with making companies improve efficiency. The company mainly focuses on keeping long-term strategic priorities. It primarily comes with three software outsourcing models:

  • Onshore Software Outsourcing
  • Offshore Software Outsourcing
  • Nearshore Software Outsourcing

The above model comes with its advantage. They are suitable based on level of needs, complexity, budget, timescale, and involvement level. Let’s understand each in brief:

1) Onshore Software Outsourcing

It’s an act of a customer working with a development team located in the same country. The main advantage of onshore is it can virtually have no language barrier, which makes mistake communication easier. In return, you can get more for development costs.

2) Offshore Software Outsourcing

It means working with the development team in other countries. It’s the most critical and cost-effective option for low labour costs and online communication channels. It can effectively manage software projects remotely with ease. 

3) Nearshore Software Outsourcing

It can work with customers in neighbouring countries. 

What are the reasons to choose Outsourcing?

  • Low-cost Onboarding

Onboarding is a process that is quite lengthy. A new employee needs to understand the organizational rules, network contacts, and other workflows of the company. Hiring a specific firm or individual can minimize the lengthy process and save your time.

  • Get way for talented Recruitment

Give a trial run for an employee, and companies do not need to extend it forever. Outsourcing works with a brilliant mind can sound amazing in real-time for an indefinite period. It helps businesses to avoid the hassle of hiring permanent employment contracts with high taxes.

  • Fresh and Expert Knowledge on the matter

The experience and process make software outsourcing service invaluable. The resource can spot the missing element with the manufacturing line by adding new ideas to the table from experience. The expert offers several benefits with an isolated task.

  • Get superstar on Board

When the user has a budget issue, one needs professional project management with field experience. Suppose you don’t have a budget to hire a full-time developer or spend an amount on temporary services. In that case, an industry superstar can streamline the process by setting an excellent foundation for upcoming work. For those, Outsourcing is the best option to grow business.

  • Focus on what matters the most

The small task might occupy all time, and we can’t leave that task also. Similar to how we hire housekeepers, companies require Outsourcing to do some services and focus on primary goals. Outsourcing helps to free up some time and lets you focus on other things.

Pros and Cons of Software Outsourcing


  • Low Development Cost and Reduce overhead spending

The most common reason to lead the business to outsource development projects is drastic saving on the development cost. It helps reduce the budget expenditure and enables business growth by scaling it effectively.

  • Flexibility

Companies can engage with outsourcing vendors whenever needed. Unlike any permanent employee, there’s no legal bound or obligation of maintaining a long-term contract. It offers the customer the flexibility of having to pay for Outsourcing during the project works. It is specially designed to make the task more accessible for people to work from home anytime and anywhere.

  • Focused Strategy

Working with a remote team can open up a new opportunity and exposure to new, emerging, and disruptive technology like AI, Blockchain, etc. It helps to transfer knowledge base and best practices to the internal team effectively.

  • Faster Development Time

Since the outsource team already has industry experience, they can work faster by saving extra time. The company also need not spend on the training and onboarding process.


  • Language and Cultural Barrier

Working with IT teams in a remote location could come with a challenge sometimes. Also, the time zone is different, preventing the customer from effectively scheduling communication and meeting the deadline. To avoid such risk, establish frequent online meetings and keep lines open for easy feedback at each stage.

  • Not meeting the quality standard

When hiring offshore software development companies, one can get an attractive aspect of cheap labour cost and comprise the low-quality standard. This risk is inherent and develops software projects at a price that is lower than the local market. The project makes it challenging to have complete visibility into the process and address the problem by providing feedback to move further.

Check these Software Development Trends to Watch Out in 2022

How to outsource effectively?

We find numerous ways to influence the likelihood of success, and it comes with software outsourcing. There are certain aspects that companies should know like:

  • Have realistic expectation
  • Establish goals for Outsourcing
  • Get involved in project management and collaborate with remote team
  • Set Milestone and track frequently to provide feedback

No chance outsources guaranteed to project 100% success to the project. But few things help companies to improve their chances of success. Additionally, companies opt for an outsourcing partner that applies Agile methodology in flexibly managing development projects. 

How does a software development outsourcing process look?

Whether you conduct in-house or outsource elements, one needs to understand their needs and focus on software development. Check the below process.

  • Decision to Outsource

Understand that if you’re ready to outsource. Make decisions carefully based on analysis and current state of affairs, planned budget, and existing goals. 

  • Selection of a Vendor

In this phase, evaluate the available offers in the market and hire the right software development, outsourcing team. The decision to outsource comes with urgent needs but do not overthrow the crucial moment and hire the right team. 

  • Contract Signing

The commitment and obligation of both sides are essential, and one might opt for contactless cooperation too. But it’s highly advisable to have everything noted down. Regardless of the software outsourcing model, the contract is a crucial element for collaboration. 

  • Cooperation 

After the legal part completes, it’s time to start with actual software development. Start getting outsourced team members and launch the project by discussing the final details. 

  • Monitoring

This step is carried along with the cooperation phase as it completely outsources the project with monitoring the progress and update of the development team. For the managed team, one needs to monitor a continuous observation with knowing their performance and efficiency of the new team member in your project. 

  • Project Wrap

As soon as the contract scope is delivered, the project development comes to an end. Now, it’s time for final payment as the evaluation of the cooperation is handled and discussed carefully. It’s expected that the client extends the requirement and signs a new contract with any offshore software development team. 

Why Agile Infoways for Outsourcing?

We have years of experience in completing and delivering software development outsourcing projects across the globe. We are leading software outsourcing companies to provide the best quality software outsourcing services, catering for clients worldwide with projects of any size and scope. Let’s discuss your requirements and grow together.

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