The Benefits and Challenges of Outsourcing Software Development

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Outsourcing tasks and even whole departments is an extremely effective way of tapping into a wide pool of talent and freeing up in-house staff to concentrate on core competencies. Enterprises as large as Google outsource work, while others such as IBM provide outsourcing services.

Even the smallest businesses are outsourcing now. About a third of small companies outsource tasks from HR to marketing.

Some projects benefit greatly from outsourcing including software development. Most companies have neither the resources nor experience to develop their own software, so outsourcing is clearly the answer.

But, what exactly would you gain if your business was to hire a dedicated development team for your software project, and what challenges would you face?

Why outsource software development?

The main gains of outsourcing work generally include saving time and money. A business will also get access to expertise and technology that it may not have internally.

The benefits of remote software development include:

  • Latest technology
  • Cost savings
  • Access to expertise
  • Increased innovation through outsourcing
  • Faster completion time
  • Scalability
  • Freedom to concentrate on core competencies
  • Smaller work areas required

The outsourcing industry is expected to be valued at $293 billion by 2029, and software development and IT services are a growing part of this sector. Here are those benefits in greater detail.

Access to the latest technology

Investment in IT and software is a necessary part of business today. As digital transformation becomes unavoidable, businesses are investing more money in this area.

However, by outsourcing software development, your business will gain access to the latest technology without having to invest as much. 

Outsourcing software development can save money

Businesses that choose to outsource have a global pool of talent to choose from. This means being able to outsource software development to nations where labor costs are less.

Instead of putting together a team of software developers on-site, your business can choose a professional development company to suit your budget.

A wide pool of talent to work with

Recruitment is time-consuming and expensive. A software development company will give you access to a dedicated team. This includes a project manager and a quality assurance specialist. Essential for any successful software project.

It is believed that 20% of all software projects fail. So, the right people must be put together to work on your app or platform.

Your business will gain innovation

Because you are utilizing the talents and latest technologies, you will also benefit from innovative ideas. Your business will open itself up to new ideas and ways of thinking that you may have been shut off from.

Having a remote team composed of expert developers opens up the possibility of fresh ideas. It is easy for companies to get stuck in their ways and repeat the same approach to every project.

Outsourcing software development leads to quicker results

While your workers are concentrating on their core tasks, the developers will solely be working on your project.

A dedicated team of developers will lead to your project being realized far quicker than if it was built in-house. No distractions or other responsibilities means a streamlined approach all overseen by an experienced project manager.

Utilizing software development companies in other regions may also lead to a 24/7 approach. By working around the clock, development time can be slashed. This will lead you to learn how to market your app or integrate your software in your business, that much faster.

Outsourcing allows for scalability

Regardless of the task, outsourcing is both flexible and scalable. If your software project grows, so too does the team working on it. 

Conversely, if your project needs scaling down then the team may be reduced to suit. This flexible approach is far harder to handle when projects are developed in-house. Recruitment takes time, so finding skilled software developers in a hurry is never ideal. A software development company will already have access to experienced IT workers.

Freedom to concentrate on core tasks

Instead of being bogged down in software development, your business will be free to concentrate on its core competencies.

Of course, there will be shared responsibilities with the software development company, but you will be freer to concentrate on the business’s main goals.

Reduced office space

Your software development team will be recruited by the company you choose, and they work remotely. Utilizing remote developers means less need for expensive office space.

Many businesses recognized the benefits of remote working during the pandemic. One was being able to reduce how much space was leased. As a result, there are record office vacancies in the US. And businesses are saving money by leasing smaller areas and employing remote workers.

What are the challenges of remote software development?

Of course, taking on a new project always presents challenges. Software development will take several months to bring to completion. Planning, building, and testing take time. But, they are all vital for a successful project.

Outsourcing has numerous benefits, but it also brings some unique challenges. Hiring a reputable software development company will minimize the challenges you face, and ensure your data is safe.

Choosing the wrong software development company may lead to the following problems:

  • Security issues and data breaches
  • IP concerns
  • Communication problems
  • Time zone problems
  • Quality control

The importance of using an experienced project manager dedicated to your project cannot be overstated. By having the right quality assurance specialist and project manager in place, your project will avoid many of the pitfalls.

Security issues

You may need to share sensitive data with the software development company. Finding a trustworthy company is essential. One of the cybersecurity risks companies face is from insider threats and this increases when using third-party vendors.

IP concerns

Similarly, you may be sharing intellectual property with your development team. Again, a reputable development company is a must.

Communication and language issues

Using remote workers in other regions may lead to communication problems with languages. Your software development company and project manager can negate these issues.

Time zone problems

Working across different time zones may result in more communication problems when fast responses are needed. But, this may also work to your advantage by using developers in different areas to create a 24/7 work approach and speed up the project.

Quality control

Outsourcing work of any type may lead to lower standards. Remote work needs effective management to ensure quality control. Good software development companies provide quality assurance specialists that understand the unique requirements of software projects.

While there are challenges with outsourcing software development, all of them may be overcome by utilizing a reputable company to help manage your project and build the right team.


Outsourcing is being seen as the way forward for many companies who wish to maximize productivity, and save costs, but still have access to the best talent. Software development requires skilled and experienced workers if a project is to succeed.

Using a software development company should make recruitment easier, and reduce the development time without reducing quality. Innovation, new ideas, and faster turnaround time are just some of the benefits. And your business will be able to concentrate on what it’s best at.

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