Offshore outsourcing involves working with companies that are far away from you, often Asian countries. This may be your cheapest option, but it’s also usually the most problematic in terms of communication and logistical issues. Another obstacle to effective communication with a software team in another country is the language difference.

outsourcing software development pros and cons

For a startup to achieve sustainability and growth, it needs to minimize its operational costs. Sometimes, choosing the right IT company to outsource can be very tricky, especially if you’re outsourcing for the first time. If you are not careful enough and did not do thorough research, you may end up choosing the wrong company to handle your project. A leading SaaS CRM provider, Salesforce owes its loyal clients top-grade software and unparalleled service. They can honor their obligations only with an army of in-house developers maintaining their systems.

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If we are located in different time zones, our PMs will follow your schedule to keep you updated. Software development companies should follow the EU General Data Protection Regulation . It is possible that your city or even country does not have enough specialists you need. For the purpose of sending you informational and educational content, which states the exercise of the data controller’s legitimate interest (article 6 GDPR). You can find out more about the processing of your personal data in our Privacy Policy. Some executives do not take outsourcing seriously, thinking that extracting a high-value solution can be built cheaply and quickly.

outsourcing software development pros and cons

Outsourcing provides the solution by allowing you to contract people for any amount of time you need them for. Contract work means you’ll only be required to pay as long as you want to, not a penny more or less. Those projects that your corporate structure might not have otherwise been flexible enough to handle?

Less control

So, before signing that partnership agreement, make sure that they can understand your language. If your in-house team speaks English, then insist that your outsourced team speaks the same language, too. This ensures that they know what needs to be done and can raise any issues and feedback to your team easily.

outsourcing software development pros and cons

The distance naturally extant in an outsourced project means you’re running the risk of the final product not meeting your expectations. Ensuring creative control is challenging when communication is so slow, meaning you can’t be expected to sufficiently catch every problem and report back on it. As a result, quality assurance tends to have holes, leading to an overall buggy finished project. Before you outsource software operations, you may need to consider the possible benefits and issues you may face. Here are the pros and cons when choosing the path of software outsourcing. Most outsourcing firms act like a one time vendor, meaning once the job is done and they get paid, they move on to another project.

Saving time

Moreover, an outsourcing vendor will no longer charge you once the project is completed and launched. Unless you decided to remain with the partnership for additional product development and support, then you wouldn’t be charged for any additional costs. With software outsourcing, there’s no need to recruit and manage a development team directly. Likewise, it offers cost benefits on payroll taxes, bonuses, training and development, and employee benefit packages. When added together, all these can burn a huge hole on your startup budget. Miscommunications can occur especially with remote working situations as you’re dealing with time differences.

2022 is another proof that we live in times of changes, challenges, and continuous development. In 2011, Marc Andreessen wrote that “software is eating the world” to convey his prediction concerning software companies… A $5 or $10 difference in hourly rates seems attractive, but in the end, it is going to cost time and nerves outsourcing software development that are irrecoverable. In addition, if the project is going to suddenly change a different course or require additional functionality, they have everything to implement it without rebuilding the project from scratch. The one and only most significant reason for going with outsourcing is, of course, cost efficiency.

Disadvantages of outsourcing software development

You need a good manager, a leader who is in constant communication with the offshore vendor. The leader needs to understand the requirements, and each and every day make sure that the offshore vendor also understands the requirements. The client should make sure that standards are being met by viewing code, looking at latest builds, viewing the bug tracker, viewing language resource files, etc. A lack of constant management generally means the project will get out of control. Software outsourcing is an effective approach to focus on your core business, reduce costs, and get access to software experts.

  • Disgruntled employees will jump at the chance to blame the offshore company for any mistake made.
  • Your company has a lot of choices when it comes to software development.
  • Another problem with using in-house talent is that there is a high rate of employee turnover.
  • Moreover, an outsourcing vendor will no longer charge you once the project is completed and launched.
  • There are many platforms available to offer pre-employment testing.
  • Luckily, that’s what you’ll get with us at The One Technologies.
  • Your employees can only do so much, and an injection of expert software engineers can help you complete a particularly important sprint or institute a continuous development methodology.

Should any cross-domain issues occur, developers from outsourcing companies can consult with their colleagues. It wouldn’t be correct if we say that money is the prime motivator for most businesses to explore outsourcing software development. But if we go back years then cost savings are undoubtedly an expected result of software outsourcing.

How to Choose a Software Development Company in 2023

Get in touch today to find out how our custom software development works. The best way to get the best of both worlds is to have a small in-house development team work on some of the most critical tasks while outsourcing others to a third party. Developing in-house is also ideal if your core operations revolve around software development, you are constantly developing something, and there is steady work for your team. In some cases, and depending on the project, qualified talent can be challenging to find in your location. A McKinsey Global Survey revealed that 9 out of 10 business executives face a skills shortage in their organization.