Why Do Companies Outsource Software Development? 5 Key Reasons

Also, outsourced development is a more flexible approach in terms of team composition. For example, a team lead, a backend dev, a frontend dev, and a QA engineer worked on a project for 3 months. For instance, you don’t need to have backend and frontend devs working as much as they did during ‌in-house development.

outsourcing software development

Software development outsourcing is a business tool that allows companies to hire an incredible team of needed professionals, usually at a significantly lower cost than hiring in-house. The global market for outsourced services is worth an astonishing $92.5 billion — and that’s only set to grow as more companies continue to leverage external teams’ capabilities. The average hourly rate for software outsourcing development ranges from $15-$45 for junior specialists and up to $50-$100 for senior engineers. Junior development specialist outsourcing rates in Africa in 2020 is nearly $20 per hour. A small talent range of software engineers in African countries cause the high junior software developer rates comparatively to other world regions.

Reduce software development cost

For example, rates for hiring developers in Ukraine will be lower than rates for a developer in Poland or the Czech Republic. The average rates of offshore developers is around $25 for a junior software developer and $50 for a senior software engineer. Below you can find a table with offshore software development rates by country in Eastern Europe including outsourcing rates in Ukraine. Relevant has 8 years of expertise in building web and mobile applications. 200+ companies from 25 countries outsourced software development to us. Loss of control over the project is one of the main concerns business owners have when it comes to outsourcing software development.

  • Staying innovative and improving isn’t easy while remote, so we focused on Pain Points to help us stay true to our dream.
  • I find it’s very helpful to have a business analyst or project manager as a key stakeholder on the team.
  • Our team of QAs, starts with QA automation engineers who can built test cases that automate the sometimes infinite number of ways a user may interact with your application.
  • You don’t have to worry about finding developers with a diverse skill set for years of projects.

However, the company’s abrupt shutdown has customers seething with questions — and anger — about millions of dollars owed in wine. Beneficial for non-core skills that are not essential in the long term, and when cost savings are a priority. In other words, it comes down to whether you have or need to hire the in-house skills, or whether you can find those skills outside the organization. It will give you a step-by-step process for making the right decision for your business. This is a great asset for your company, you should use their expertise to complement yours whenever you can. Sure, you could hire an agency, hand over a list of features and let them get on with it – you’ll probably get a half-decent product out of it.

Best practices when signing an outsourcing contract

I think it’s very important to review software outsourcing contracts multiple times before signing up because one signing wrong contract there is no way out. Outsourcing is the one from which Startups to large enterprises are benefiting from. Outsourcing just because labour is cheap in say isn’t correct and shouldn’t be encouraged. If people get the hint that they are being used to prosper or nourish the client’s company/country it isn’t going to be good quality work.

outsourcing software development

Be involved in the build process, evaluate and change direction as you go. You want to know ASAP if the project is going in the wrong direction and correct it. The best way to know is to look at working software, and test it vs your users.

Reasons Why Outsourcing Software Development Fails

An expert who’s not part of your company may have new ideas and strategies to bring to the table, and they may be better at spotting any weak points in your software development plan. Software outsourcing is a great way to get help from an expert developer without paying the full price of hiring one permanently. As mentioned already, when you outsource, you get to skip the process of hiring and onboarding, saving significant time. In fact, many development teams will be able to supply you with a full lineup that includes testers, designers, marketers, CTOs, and more. And once you develop a relationship with a third-party developer or development team, you can bring them on board any time you need a few extra hands or an expert eye.

outsourcing software development

As soon as the testing phase is successfully completed, and there are no bugs or other imperfections in the product, it is delivered to the market for beta testing. During the beta testing, the support team collects user feedback, and if any problems arise, the development team fixes them. Using T&M, the client pays for the time spent exclusively on the development.

Why Do Companies Outsource Software Development? 5 Key Reasons

With such short-term business needs, it makes no sense to hunt for, identify, and hire highly-skilled individuals. Either the cost of this process is prohibitive or delayed for an unacceptable length of time. In fact, business leaders believe their companies will lose competitiveness if they don’t commit to a next-generation operating model. Additionally, they take pride in their expertise in the cloud design experiences, delivering analytics, and creating applications that assist our clients in achieving their goals.

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