michaela-damm.jpg
blocshop
November 05, 2020
0 min read

Outsourcing software development: pros and cons

Outsourcing software development: Advantages and disadvantages.jpeg

What is software development outsourcing?

Sometimes in life, we need to call in outside help to do things for us. Be it a plumber, an electrician, or a babysitter, there are tasks that we don’t have the time or expertise to do ourselves. This same idea can apply to software development. Outsourcing is when you hire a third party to create the custom-made software your business needs. Software developers create software for you, or work alongside your employees, typically on a contract basis.

Why do companies outsource software development?

There are many reasons why companies may choose to outsource their software development. The largest motivators are to save time, and reduce costs. Other reasons companies choose to outsource include the desire to keep their business small, the need of industry experts, or because they only have a small amount of work to be done, and do not have an ongoing need for developers. According to the Gartner report, firms spent $3.8 billion dollars on IT outsourcing in 2019, and they expect that the trend will continue.

Related post: In-house development vs outsourcing software development

What are the advantages of outsourcing software development?

Wide range of talent

It may be that you’re not in an urban setting, or that the local talent was already snatched up by other businesses. Either way, it can be hard to find the people you need in your immediate area. By outsourcing, you can access talented developers from around the world. This increases your chances of finding the perfect team to suit your needs.

Finely tuned expertise

Custom software developers have worked with many different clients on many types of projects. No two clients have the same needs, and so the developers have had lots of practice. They can find the best way to create your software in the fastest amount of time. It is also possible that they have skills your in-house employees are lacking. This is especially true for uncommon or unique project types.

Concentrated focus

When you have too many things to oversee, some areas of your business will suffer. There just isn’t enough time in the day to focus on everything! Outsourcing leaves you with fewer worries, and more time to concentrate on your core business functions. Or maybe, your core developers are overwhelmed with other responsibilities. In this case, you can outsource specific tasks. That will ease the pressure on your in-house developers, and get the project finished faster.

Lower cost

The hiring and on-boarding process takes up a lot of time. Because they do not need the salaries and benefits of in-house staff, you can avoid those costs. Other overhead costs you can avoid are equipment, office space, and employee insurance. Software development companies also have incentive to keep their prices low, to stay relevant in the market, which means more savings for you.

Time efficient

Teams in outsourcing companies already know each other and work well together. There is no time wasted on getting to know each other's working styles, so they can progress faster than a new team would. They are also motivated to complete their jobs quickly and without any mistakes. Errors and delays only prevent them from moving on to the next client, which loses them money.

What disadvantages are there to outsourcing software development?

Communication barriers

Technology has drastically changed the way we communicate, but it is not flawless. Common communication problems you may run into are network outages, low or reduced bandwidth, and issues with communication platforms. With on-site staff, communication is easier, as you can walk over to their workspace, or call them. But when working with a team who is across the country or on the other side of the world, you have to depend on communication tools like Skype or Zoom. As we all know, these platforms are prone to mishaps and bad connections. Avoid this by having more than one channel of communication, with one as a backup.

Bad product

The greatest disadvantage of outsourcing is the potential of a bad product. Some companies boast a top-shelf performance, but may fail to deliver what they promised. You could get buggy code, or something that isn't up to industry standards. Another possibility is not getting your software at all! Avoid this by researching the company you want to hire thoroughly.

Complex project management

Outsourcing may bring up some unique challenges when it comes to management that you probably wouldn't have with your in-house staff. Time zone differences can lead to delayed communication and problem resolution, for example. It may also be that your company and theirs have different processes and decision policies. There may be confusion about who has the ultimate authority. Avoid this by discussing the process of decision making and working hours before the project starts.

Tips for effective software development outsourcing

Have clear goals

Before looking for potential developers, sit down with your project managers and other relevant staff. Discuss what you want and need, budgets, and other specifics. Having clear ideas will help the process move along quickly and smoothly. Alternatively, you can have a simple list of parameters, and decide on the details with the developers you hire. Good software developers will be very upfront about their process, and will want to know that they’re meeting your expectations.

Read more on aspects taken into account during the project planning in the Software development budget estimation article.

Agree on benchmarks

When the project is underway, it is helpful to have mini-goals (benchmarks) to meet throughout the duration of the job. Regular benchmark check-ins allow you to see that the project is on track, and work out any problems there may be. An easy way to do this is through your favorite project management application.

Research, research research

The disadvantages of outsourcing software development can be avoided with proper research. Look into custom software development companies and compare them. Check their client lists, past projects, and the experience of their employees. Find outside sources for reviews and client experiences. Anyone can say they have 100% satisfaction guarantee on their website, but a quick Google search can quickly prove otherwise.

Read also: Outsource web development in 2021 and beyond

Once you’ve chosen the right company for you, you can leave the rest to the excellent software developers you’ve just hired.

At Blocshop, we have four models we use to approach tasks. Whether you need an entire program built from scratch, or just a few things on the side done to ease your workload, we have the perfect approach to suit your needs. Do you want to know more about how we manage tasks? Read more about us here.


Learn more from our insights

0-4 cover.png
October 03, 2023

IT Staffing: Individual Hiring vs. Specialized Developer Teams

Should you hire individual developers or go for a specialized, custom-built developer team?

chatgpt-35-limitations.jpg
July 17, 2023

ChatGPT-3.5: An Overview and Limitations

In this article, we'll take a closer look at the capabilities and limitations of ChatGPT-3.5, providing you with a comprehensive overview of what it can do and what its boundaries are. So, let's delve into the inner workings of this large language model.

gpt4 vs gpt3-5 and the key differnces.png
June 15, 2023

A Deep Dive into GPT-4 vs GPT-3.5 Differences and Ability to Revolutionize Software Development

There are key differences between ChatGPT-3.5 and ChatGPT-4 that software developers and companies procuring software solutions alike should be aware of. Let's see how these differences affect the output generated by these models on specific examples.

ai-development-cto-2023.jpg
May 09, 2023

AI-powered software development: What CTOs need to know in 2023

As technology continues to evolve at a rapid pace in 2023 and beyond, CTOs must stay ahead of the curve by utilizing predictive analytics, automated testing processes, and deployment solutions.

ai-web-development.jpg
May 05, 2023

How Artificial Intelligence is changing web development

AI technology is now being used in many different industries, including web development. It’s important to understand the impact that AI can have on web development as it can help companies to create more efficient and user-friendly websites.

cto-ai-software-development.jpg
May 05, 2023

How AI-powered software development is changing the role of the CTO

As AI-powered software development becomes increasingly commonplace, CTOs must prepare themselves to take on a new set of responsibilities that require more than just technical know-how.

build-mvp.jpg
April 17, 2023

How to build a minimum viable product (MVP)

The MVP is the version of a new product that allows Blocshop and your team to collect the maximum amount of validated learning about customers with the least amount of effort. The essence of your core idea is delivered as a barebones solution. The solutions is, however, sufficient for usage by early adopters. As a product, it has tangible qulities that express a look and feel.

ai-tools-developers.png
March 21, 2023

10 AI tools for developers you should know about in 2023

For developers, programmers, and data scientists, AI coding solutions can free up thinking time, allowing such professionals to focus on the fundamentals of their projects, and complete such projects much faster.

web-app-ideas.png
February 14, 2023

17 Ideas for Web Apps in 2023

Gazillions of web apps and ideas for web apps are floating around the metaverse - so creating one that properly represents a unique brand is a huge challenge. Our list provides a number of areas of simple app ideas to help businesses transform their online presence through a web app.

Top 15 micro-SaaS ideas for your startup in 2023.png
December 06, 2021

Top 15 micro-SaaS ideas for your startup in 2022

What exactly do we mean by micro SaaS? Micro Saas solutions use a web browser or mobile app interface. Micro SaaS solutions usually come about through the effort of an individual or very small team. It aims to solve precise problems. Micro SaaS projects have small budgets and overhead. Customers use Micro SaaS solutions on a monthly or yearly subscription basis. Micro SaaS projects target a small niche of the consumer market.

Software engineer hourly rates in 2021 (based on experience and location).png
November 22, 2021

Software engineer hourly rates in 2022 (based on experience and location)

Region influences salary more than any other factor. Taxes rates, cost of living, and government benefit programs affect the rates software developers charge. Software developers in the USA  and Canada earn more than software developers in other countries.

The best programming languages for app development in 2022.png
November 15, 2021

The best programming languages for app development in 2022

Software developers usually have three main ways to create an app. They can choose to code a native app, a hybrid app or a progressive web app. Developers create native apps to function on one specific platform, usually either iOS or Android. They create these apps using Swift or Objective C for iOS. For Android they use C++, Kotlin or several other languages. 

Cross-platform mobile app development: Tools & frameworks for 2022.png
November 09, 2021

Cross-platform mobile app development: Tools & frameworks for 2022

The cross-platform development project aims to create apps compatible with several operating systems. Cross-platform apps work on iOS, Android, and Windows. Cross-platform apps look and feel like apps developed specifically for the operating system.

App development cost breakdown in 2022.png
November 08, 2021

App development cost breakdown in 2022

Your business needs an app, but you aren’t sure about the cost of creating an app. Without some figures, you can’t even begin to estimate the potential budget, so let’s get you sorted with the information you need to make your app a reality.

unnamed.png
November 04, 2021

Web app development: a detailed guide

The best web apps give a responsive and engaging user experience through a browser instead of a single application. Think of web app development as a super-charged website. Web apps have many features of mobile apps coded for iOS or Android without the need to code for specific platforms. Developers create web apps using HTML, javascript, Python and CSS.

15 useful web app development tools for 2021.png
October 29, 2021

15 useful web app development tools for 2022

Web development vs app development: Choose the best for your business.png
October 19, 2021

Web development vs app development: Choose the best for your business

Outsource web development in 2021 and beyond: benefits & tips.png
October 15, 2021

Outsource web development in 2021 and beyond: benefits & tips

8 IT outsourcing trends in 2022.png
October 11, 2021

8 IT outsourcing trends in 2022

More and more firms choose to outsource their IT operations and functions. IT outsourcing grows each year. The Gartner report announced that firms spent $3.8 billion dollars on IT outsourcing in 2019. They expect that the trend will continue. Companies aiming for digital transformation need partners and tools. They need tools that they cannot build in-house with speed and accuracy. 

In-house development vs outsourcing software development.png
October 01, 2021

In-house development vs outsourcing software development

Every business starting software development must ask themselves what will serve them better, in-house or outsourcing? There is not a simple answer to the question. Making the choice to develop in-house or to outsource will have long-term consequences.