Top Reasons for Software Outsourcing

10 min read
software outsourcing


In a technologically driven world, companies across all sectors are modernizing their IT infrastructure and steadily shifting more of their operations online. While some firms are already overburdened and unable to devote any more resources—including money, staffing, or time—to in-house software development, the unavoidable fact is that to thrive in the face of intense information technology (IT) competition; businesses must increase their investments in software outsourcing. As such, enterprises now see reasons to outsource their development due to its enormous success. Cost savings have been one of the leading reasons for outsourcing software development projects, but corporate executives are starting to emphasize other potential benefits of this approach. By outsourcing most of the internal operations, companies can reduce operational costs and focus on other core capabilities.

According to recent statistics by Deloitte, 78% of multinational corporations are in support of outsourcing. From saving resources and time to providing firms with easier access to professional developers, the significance of this approach is unquestionable. In this article, we will explore more in-depth reasons for software outsourcing.

What Can I Outsource to a Software Outsourcing Company?

There are various functions and tasks you can contract to a software outsourcing company, which may include:

Web application development: software outsourcing teams can build custom web applications.

Mobile application development: many software outsourcing companies create cross-platform mobile applications for iOS and Android.

Software application maintenance: remote IT engineers can offer timely upgrades while ensuring the smooth running of your applications in the cloud. 

Data recovery: nearshore software development providers can handle numerous projects involving data recovery and security to prevent data breaches or loss to wannabe hackers or malicious organizations.

Web hosting and network maintenance: remote teams can oversee all associated responsibilities involved with network configurations and operations, as well as handle issues emanating from web server breakdowns.

Technical support: outsourced teams are better at managing technical challenges faced by in-house employees. They are also effective in assisting customers with issues they face while working with the app.

Database development: in cases where a company intends to run and maintain its data centers, “firms” can employ remote teams to set up and configure necessary plugins that will aid hassle-free operations of the networked data systems.

The Most Common Reasons for Software Outsourcing

Some of the primary reasons for outsourcing software development projects include the following;


Cost minimization is the prime goal of all software outsourcing endeavors. Typically, the overall cost of a project is less when a nearshore development team takes charge, in contrast to leveraging the expertise of internal teams or onshore teams. Due to unpredictable business trends, outsourcing enables companies to deal with challenging financial circumstances and downturns. By so doing, enterprises can easily keep within their allotted budget while minimizing the overhead expenses of hiring new employees.

Also, the cost of employing managers to handle “hiring-related” paperwork can be channeled (diverted) to new investments or to address other vital needs of the organization. In addition to minimizing wasteful spending and devoting more funds to new projects, there is a higher predictability of determining what is spent within a given timeframe.


In software development, flexibility is of uttermost importance when it comes to jobs required to be completed or executed within the shortest possible timeframe. No doubt, housing a team of IT developers are no longer necessary; as there will be less work left after the project is up and running. Likewise, it’s expensive and time-consuming to retain “top talents” since it takes a great deal of training (retraining) to educate or make them adjust to specific project needs/requirements. 

As the outsourced software development team is not an integral part of the company’s weekly/daily routine, employers will have more flexibility to hold consultations and meetings. Also, if an unforeseen need arises, organizations can always continue working (collaborating) with outsourced software developers. Either way, you won’t lose, and the company will save more on expenses like employee bonuses and health insurance.


By handing over the underlying concept (idea) behind a software project to an outsourcing company, you will save money and time by negating the cost of managing, hiring, and motivating the in-house Information Technology experts. Do you know that; If any of the employees in the development team resigns, it’s the sole responsibility of the nearshore partner to recruit new hands to continue with the task? Yes.

Speed to Market

By engaging the expertise of a reliable software outsourcing firm, you can be confident that a team of experienced (knowledgeable) developers will be working full-time on your project daily till completion. Bear in mind that; you will have to worry less since the software development company overseeing your task is more proficient and effective at what they do.

Due to the reasons above, the speed to market your software product is guaranteed because of the caliber of experts working on it and aiming to meet the proposed “roll out” date or timeline. As such, improved client satisfaction will give your company a competitive edge.

Access to Tools and Processes 

Companies (firms) specialized in software outsourcing keep up with emerging trends in the industry and pursue continuous technical improvement to integrate the latest tools and processes in their chosen domain or area of specialty. Why? Because; it will aid them to quickly provide better services and bring the most fantastic products available to satisfy customers’ wants, thereby aiding the growth and expansion of the business.

Going by the technological advancements in the industry and in a bid to avoid inefficiencies, most software outsourcing firms tend to streamline their service offerings with newer processes and tools; in order to deliver the best products for businesses using the latest technology frameworks. 

In emerging markets that are becoming increasingly competitive, it’s pertinent to mention that; using the latest development tools can have advantageous effects on productivity, quality improvements, cost savings, and enhanced efficiency. As such, these elements contribute to company expansion and create a competitive (market) advantage. 

Risk Minimization

Software outsourcing has the added benefit of reducing risk regarding mistakes made during project execution and the company’s overall expenditure. Because they are a technology-focused firm, the project will be overseen by highly qualified experts in the field, thereby; making managers worry less about intricacies that may arise during the application development.

Furthermore, when a technology-focused outsourced team is hired to handle an intricate task, data security risk becomes highly reduced. Because of the group of highly qualified developers it has, the project will undoubtedly have improved security against outside threats and vulnerabilities that could damage the integrity of the software product.

Also, the company becomes free from the risks and expenditures; that it might have to make, such as recruiting new personnel solely to provide the service.

Better Outcomes & Increased Efficiency 

Delivering superior results is an intriguing advantage gained when employing the services of a software outsourcing company. When you outsource your IT product development to a business with expertise in the field, the contracted firm will arrange a workforce of dedicated professionals to execute the project while leveraging agile approaches (technologies) to accomplish it in less time.

As such, professionals hired via outsourcing will employ cutting-edge technologies to carry out the underlying task (gig) without relying on additional resources or expertise from your firm. In addition, when new technological trends arise, it’s common for some businesses to embrace these advancements in their business model, but; maintaining a workforce with experts in all of these technologies would be nearly impossible.

Meanwhile, for well-organized IT outsourcing firms, this diversity presents no issues. Due to their propensity to serve multiple clients, they typically employ a larger staff. They can hire workers with various skills and job profiles to efficiently meet the demands of any underlying project.

Exceptional Product Output 

One of the significant hurdles faced when working on ‘new’ software development initiatives is the fact that you generally won’t see results right away. But why? Because; you will have to work with employees with little to no prior experience to execute the task, which in turn necessitates managers to invest a lot of time and money in educating them.

However, an outsourced team has the right set of human talents with distinctive capabilities. As a result, outsourcing the project will yield quick results and save time in acquiring and training new staff.

Increased Market Penetration 

Outsourcing enables organizations to explore new opportunities and reach new markets. This is because outsourcing application development to a larger-scale nearshore company moves the site of production or service delivery nearer to specific market segments. As such, companies will have access to new markets and establish a global footprint in this manner, thereby positioning it ahead of their various competitors. 

Meeting Customer Expectations

With the assistance of a proven software outsourcing company, it becomes easier for enterprises to research (discover) and gain insights about their target audience. By doing so, you can create software that directly addresses the demands of your customers by taking the time to comprehend their behavior and personalities. As we know, no business can succeed without understanding its customers and target market. Therefore, by harnessing the potential that outsourcing gives, small/large scale businesses can better meet the needs & wants of the client.

Frequently Asked Questions on Software Outsourcing

What is the purpose of software outsourcing? 

The primary purpose is to; manage the risk that comes with software development, and foster access to a large pool of talented professionals, while reducing the overall project cost.

Why would a company outsource its IT?

The primary reason why companies outsource is to increase talent acquisition and minimize operating costs or business expenses while enhancing the overall team structure. In addition, they contract out projects to boost productivity for time-consuming tasks that the organization might not have had the resources for days back.

What can be outsourced in software development?

Companies can outsource the front-end and back-end development of a software project to external developers from other parts of the globe. Also, they can outsource the “User Interface/User Experience (UI/UX)” design to experts not within the organization. 

Are software developers outsourced?

Yes. Most software developers are outsourced to take on challenging IT projects of a company to reduce costs and meet deadlines.

Is IT better to outsource software development? 

Yes. Information Technology products are better outsourced to third-party firms. But why? Companies can successfully scale up their technical or development capabilities with the help of an external software development company, enabling them to concentrate on launching their product as quickly as possible. 

What is software outsourcing definition?

Software outsourcing is choosing third-party vendors that can manage all the duties required in a software development life cycle. In its simplest form, outsourcing refers to a firm’s practice of giving control of a particular business sector or project to a competent, outside organization with the time, skill, resources, and competencies to meet the necessary business needs.

Which are the best companies for outsourcing software product development?

There are no specific statistics about the best companies to outsource software development projects. As such, we advise that you do your due diligence by taking note of the feedback and reviews of various clients that once patronized the firm you decide to outsource your task. Flatirons provides software development outsourcing services. If you are looking for an outsourcing partner, contact us today.


The reasons for software outsourcing are numerous to mention. Undoubtedly, companies with limited resources can employ the services of expert software developers without the need to hire employees or fret about timelines. However, before making any crucial decisions, be aware that there are numerous software application development agencies worldwide, but not all are reliable.

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