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Software Development Outsourcing Guide

Rapid global digitization, especially in the conditions of the Covid-19 pandemics, urged more businesses to turn to custom software development. To build their digital solutions faster, ensure their high quality, and provide the best value for money, many of them prefer hiring outsourced software development teams.

In this comprehensive software development outsourcing guide, we’ll get into the details of outsourcing and explain how to outsource your app development effectively.

What Is Outsourced Software Development?

Outsourced software development is a widespread business practice when businesses delegate web, mobile, or desktop development to outside software development experts.

outsourcing software development

This allows non-technical companies to quickly find the IT expertise and build high-quality products, avoiding the necessity to establish their own IT departments. Whereas, technical companies can achieve greater flexibility and focus more on their core business goals.

Why Should You Consider Outsourcing Software Development?

Businesses have always opted for outsourcing to cut down on their development costs and quickly reach the necessary IT talents. Though, recently this IT practice has become especially popular due to the global economic and social behavioral changes.

According to the recent Data Analytics Outsourcing Market – Growth, Trends, Covid-19 Impact, and Forecasts (2021-2026) report, the global IT outsourcing market estimated $3.04 billion in 2020, and it’s projected to reach $9.46 billion by 2026 with a CAGR of 21.5% through the period from 2021 to 2026.

Since 2019 the world is undergoing a deep economic crisis caused by the Covid-19 pandemic. In the time of uncertainty during 2019-2021 businesses have faced many obstacles from temporary closures to new social behavioral norms like social distancing, remote work, and staying at home more.

Companies have been trying to find new ways and strategies of how to retain their customers and keep the competitive edge in the market. One of the most effective solutions is to opt for business digitization and develop their own mobile and web applications for effective interaction with customers and their engagement. Unfortunately, creating a customized digital solution is never a cheap option. That’s why many businesses turn to software development outsourcing.

IT outsourcing allows businesses to adhere to their strategic goals. With the help of outsourcing, companies can:

  • reduce the software development costs;
  • speed up their software development;
  • tap into highly-skilled talents who can implement the latest technologies in their digital solutions, e.g. Machine Learning, Artificial Intelligence, IoT, and many others;
  • keep the competitive edge in the market.

Software Development Outsourcing vs In-House Development

When a company considers creating a digital solution, they need to decide which development practice to choose – in-house development or software development outsourcing. Let’s have a look at a quick comparison of the two.

Costs Elimination

When recruiting staff for an in-house team, a company runs into a set of expenses. They spend significant sums on employees’ hiring, onboarding, and training. For example, the Glassdoor team has found out that the US companies spend on average $4,000 and 24 days just to find and hire a new employee for an in-house team. Meanwhile, Gallup has estimated that the total employee turnover cost makes ½ to 2 times of the employees’ annual salary.

software projects outsourcing

On the contrary, when turning to a software development outsourcing company, businesses considerably save up on recruitment. These companies assume all the hiring routines and provide businesses with highly skilled and ready-to-work programmers and even entire software development teams.

Tapping Into IT Talents and Expertise

Outsource-specified IT companies provide businesses with advanced professionals who specialize in their particular development fields. Businesses can hire programmers who are experts in web development, mobile app development, or can implement innovative technologies such as Blockchain, Big Data, VR/AR, and others.

Besides that, the software developers in outsourcing companies have solid development experience in various fields which they have gained through working on customer projects. This way, businesses can hire the most knowledgeable experts who can develop sustainable and high-quality digital sol