Getting Started with Software Development Outsourcing


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Organizations across various industries outsource a significant portion of their day-to-day operations to offshore partners. If we talk specifically about the IT industry, Software Development Outsourcing is the most desired service that organizations look at to address their resourcing needs.

The need for outsourcing differs from company to company. Some businesses need offshore assistance for periodic maintenance/enhancement of their existing software, while others outsource entire development operations to Outsourcing Software Development Companies.

While outsourcing gives you access to amazing resources, it can also encounter some challenges. In this blog, we have listed crucial information related to outsourcing and hope it will help you make the best hiring decisions.

Popular Outsourcing Models

Before availing the services of outsourced partners, organizations should be familiar with the popular outsourcing models. Following are the three most common ones:

a)- Fixed-Price Model

Under this model, the organization and the development team agree on a fixed cost and timeline for software development. Any new requirements from the client’s side are re-evaluated in terms of price and time. This model is suitable for outsourcing when both stakeholders are clear about the project requirements and there are minimal chances of any deviation in requirements.

b)- Time and Materials Model

When the project requirements are not clearly defined, a development company would prefer to implement this model. Under this, the client pays based on project hours and materials used in the project (licensing, APIs, third-party components). This is also suitable when a business only needs a trial before full-fledged development.

c)- Dedicated Resources Model

If a project is expected to run for longer durations post-development ( including software management and scalability), it is feasible to adopt this model. Under this model, the outsourcing company assigns development experts who work remotely as the organization’s extended team.

Pros of Software Development Outsourcing

There are various benefits of outsourcing software development to offshore partners. Some of them include:

1. Higher Cost Savings

Companies that outsource do not have to worry about setting infrastructure, licensing software toolkits or hiring employees. Since developers are hired on a project basis, this prevents the need of hiring in-house experts for development. Additionally, Outsourced Product Development firms are clustered in Asia-Pacific regions which makes the prices competitive. Since organizations negate the need to hire in-house experts, outsourcing proves highly cost-effective.

2. Access to Skilled Talent

Outsourcing gives firms access to a qualified, experienced and talented software development team. Teams can align UI/UX developers, QA analysts, front-end developers, back-end developers to your project as per requirement. Moreover, with diversely skilled experts alongside, organizations are not limited to a certain technology or framework as is the case with many in-house teams.

3. Timely Delivery

In-house resource shortage leads to delay in software deployment. And when there are no dedicated experts for the technology, it results in substandard maintenance. With dedicated IT software professionals, teams no longer have to worry about project delivery or pending updates. Outsourced Product Development teams have a large team the size of which can be altered as per delivery timeline or project requirement.

Overcoming Outsourcing Challenges

Outside resourcing can be a challenging thing. However, proper discussion and agreements with an outsourced partner can help in overcoming the possible hurdles that can be overcome easily:

1. Communication Issues

Frequent communication is important when you are outsourcing a project to a development team. Otherwise, lack of communication can lead to confusion and disagreement at later project stages. To deal with the communication challenges, stakeholders can agree on a project management tool like JIRA or Trello. With real-time updates on projects, there would be better communication and fewer disagreements.

2. Security and Performance Risks

Many organizations believe that outsourcing might lead to a security compromise, extended deadlines or substandard software performance. But this only happens when businesses do not do a background check of potential outsourced partners. By doing a thorough analysis of the development firm’s team size, online reviews, and portfolio organizations hire the best-outsourced partner.

3. Code Ownership

It is a misconception that a business would lose ownership while outsourcing. If you are working with a development team, the chances of that would be negligible. This is because professional development firms sign Intellectual Property Rights/Non-disclosure agreements that ensure your business gains complete control of the code after a transfer. Organizations should make sure that they hire a company that has a previous track record of being reliable and transparent throughout the development process.


Outsourcing is a reliable and cost-effective way to maintain and develop quality software. Outsourced Product Development firms provide on-demand and timely development assistance which is crucial for any business today. And since businesses can hire offshore partners on a project basis, it also saves them from the exorbitant costs of hiring in-house developers. With the best services, proven development methodologies, and years of experience alongside, organizations can be assured of software performance and ROI.

Richa Pokhriyal
In her current role, Richa heads Marketing Services department as VP Marketing at Damco Solutions. As a marketing professional, she crafts and executes high impact integrated marketing programs. Richa is responsible for top-line growth, strategy, thought leadership, digital marketing, customer relationship management, and project execution. Richa is a recognized expert on marketing and loves to write, and is an avid blogger. You can visit her LinkedIn page to know about her work.


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