Software Development Outsourcing- What, Why, and How?

May 23, 2024
Software development outsourcing

Digital transformation strategies have been playing a significant role in various industries in the past decade. Companies are focusing on automating several key processes and operations with bespoke software development solutions.

However, most companies cannot keep an in-house team of IT experts, as it requires infrastructure changes, proper management, and also increases the costs.

Software development outsourcing is widely considered a beneficial option for companies trying to build appealing solutions at a cost-effective budget. It offers more flexibility, faster turnaround, time savings, etc.

What is Software Development Outsourcing?

When companies choose to have IT solutions developed by third-party service providers, it is termed as software outsourcing. Adopting such a strategy helps to enhance the process efficiency, lowers risks, etc. As per Statista, the revenue in the IT Outsourcing market is to cross US$541.10bn in 2024.

Why Outsource Software Development?

As mentioned earlier, there are various benefits to choosing to outsource software projects. For example, it helps you with access to talented experts, higher flexibility, reduced risks, and much more. 

The infographic below lists some of the critical reasons companies consider when outsourcing software development.

Software development outsourcing


The main benefits of outsourcing are:

1. Leverage Proven Expertise

A software development company can align you with the best technical experts to handle the project. Whether you need junior developers or top-of-the-line experts, you can select from a range of portfolios to handle diverse roles in the process.

2. Quickly Fill-In Gaps

The right outsourcing partner helps to quickly fill in roles and responsibilities for IT development and streamline project management.

3. Faster Time-to-Market

The time-to-market of the ideas helps you build a loyal customer base and brand value proposition for the project. Experienced developers at the company help you fast-track the development process with the best technology tools.

4. Cost-Effective Option

Software outsourcing services helps companies to save on infrastructure cost and also eliminate the need to spend on medical benefits, leaves, and more for the hiring employees. Additionally companies can direct resources on core business functions which further helps to save on the development cost.

5. Mitigate Risks

Onboarding experienced engineers helps significantly eliminate the risks of project failure. Software experts can check the feasibility of ideas, potential technology tools, and other requirements for successfully delivering the project on time.

6. Easy Scalability

One of the key benefits of software outsourcing is on-demand scalability. For example, if you want to hire software developer and add more experts to the team, you can simply request the vendor to add resources.

Similarly, when you feel the duties of specific team members are fulfilled, and they are not essential to the team, you can release them from the software development project.

At JS Panther, we have helped companies turn ideas into successful software solutions. Whether you want to build end-to-end software or MVP/prototypes, we can ensure a smooth experience.

Having discussed the what and why of outsourcing, it’s time to look at how!

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How to Outsource Software Development?

You might find outsourcing to be overwhelming, especially if you are doing it for the first time. However, a good strategy can help you stay on track and achieve goals.

Step1- Analyze Project Goals

The outsourcing project begins with identifying the company’s key requirements. You must gain a clear idea of the software’s objectives and goals. A proper understanding of the project helps achieve goals and avoid potential issues seamlessly.

When deciding on project goals, you need to find answers to the following:

  • What are you building: a web app, a mobile app, an MVP, or a SaaS solution?
  • Who will be using the software product?
  • The functional features of the product?
  • Are there similar products available in the market?
  • How do you plan to distinguish your software product?

Finding answers to the above questionnaire involves brainstorming ideas, performing market research, and more. This further helps with well-informed decisions about software development projects.

Step2- Find a Compatible Vendor

It’s time to find a suitable software development company. The right vendor will be able to showcase hands-on experience in your business industry and the technology tools required for the project.

Some of the critical factors for choosing the ideal outsourcing software development service provider are:

  • Find out how long the company has been in operation
  • Whether they have handled similar projects in the past
  • What do their earlier customers say about them?
  • Whether they promise to deliver the project on time
  • The type of collaboration tools they use, like Basecamp, Zoho, etc.
  • Do they keep your idea secured with an NDA (non-disclosure agreement)?

Step3- Get Estimates

Do not neglect budget when building software. As many as 40% of software projects fail due to underfunding. It is better to take estimates from suitable software development companies and set aside the proposed budget to avoid unforeseen issues. This will help you ensure project continuity and a hassle-free process.

Step4- Choose a Company with a Matching Culture

Choosing a company located far away can lead to unexpected glitches and compatibility issues. It is advisable to prefer a company that shares a similar culture with complementing business values. You can explore the company’s social media or visit its office to get a better grasp of its work culture and software development process.

Step5- Check the Security Policies & Tracking Tools

Some of the key factors to consider when choosing software development outsourcing service providers are: security policies and tracking tools. Select a company that deploys standard security practices for protection of sensitive data & ideas against thefts.

This involves following best practices and security protocols in all modes of communication among the development team members. Additionally, the right tracking tools help eliminate anxieties from the project.

Wrapping Up

At JS Panther, a software development company, we can help you build world-class projects with best practices and technology tools. Our team of well-versed engineers takes a proactive approach and keeps you informed about the latest project advancements.

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