Key Strengths of Software Development Outsourcing: A Complete Guide

Before you start a software development project (or continue an ongoing one), you have a decision to make. You could spend months hiring and onboarding an in-house team of developers and absorb the extra costs that come with that route. Or you could outsource the project, or segments of it, to experienced remote developers. 

There are many benefits of having an in-house development team, not the least of which is greater management oversight and unimpeded communication. But going outsource can also be advantageous, and we’re about to tell you why in this guide to the key strengths of software development outsourcing.

First, let’s define the term. 

Software development outsourcing occurs when, for example, you send your software-based project (e.g., a SaaS or a mobile application), to an IT team that isn’t directly employed by you. The team typically works for a software engineering lab or agency, such as SENLA, which provides the developers for your company. 

Since the developers are outsourced, they can be located anywhere in the world, providing they have a stable internet connection and understand the language that you communicate in.

Choosing IT outsourcing is also a way to get the necessary tech talent or resources for custom software development that may not be available in your geographic region or industry sector. This means that you can obtain the work quality and expertise that you need for your unique software project, while simultaneously gaining more flexibility in terms of cost and organizational structures.

As we mentioned at the drop, outsourcing software development comes with several enticing advantages. 

We covered some of them along with the answers to common CTOs’ objections in a blog post “Why You Shouldn’t Be Afraid of IT Outsourcing”. Below, we share some of the highlights from that article, plus an extra advantage not covered there.

Software development outsourcing helps you reduce the costs of hiring and maintaining a team, compared to in-house development. It eliminates the need to pay salaries, PTO, sick leave, health insurance premiums, and fees for extensive training and onboarding. 

IT outsourcing grants you access to a bigger – make that global – pool of tech talent than your geographic area may allow. It helps you tap into some of the top talent in countries well-known for their developers, including Poland and Georgia.

Accessing talent from around the world enhances the diversity of your workplace culture. It brings ideas, thought processes, and experience of a kind that you may never have encountered before.

When you outsource software development, you reduce the complexity of your organization. That’s one less department that you have to make physical space for or oversee. 

Lastly, with IT outsourcing, you can hire a full complement of outsourced developers that may not be available in your area to provide custom software development solutions. 

At SENLA, we have a development center, which is exactly created for custom development services and embodies all the strengths mentioned above. We will speak more about this in Our Software Development Outsourcing Services part below.

It’s important to note that outsourcing software development, just like keeping it in-house, is not always a smooth solution. As such, here are three pitfalls that companies frequently experience when they outsource software development, and how to avoid them.

 Businesses that approach software development outsourcing companies may not have a clear vision for their project. They simply know that they want or need a specific type of software product developed, but they have no clear goals beyond that. This can cause the ideation phase of the project to drag on, draining time and resources on both sides. 

We already mentioned that communication can be a challenge with IT outsourcing. Worse than that, though, a lack of communication can mean prolonging or even killing a project. Such are the outcomes when a business isn’t maintaining contact or isn’t discussing all phases of a project with their remote team, or a team has poor communication practices themselves.

A side effect of a lack of communication at any point in your outsourced software development project can be mismanaged expectations. These can also cause you to be disappointed with the project, even if communication was perfect (or so it seemed) and your vision was accommodated (or so you thought). 

To be sure that IT outsourcing is the right path for your company and make the most out of it, consider these four important factors.

In a survey of business owners and employees in 2022, 21% of respondents said that communication was the biggest challenge of outsourcing. 

If you’re outsourcing to a company within your region — you may face such things as a poor organization of reporting or sync calls — it’s a different company, all in all. You may also be vulnerable to faulty internet connection.

But if you’re reaching further abroad this list may be augmented by such difficulties as different time zones, dead zones, language barriers, cultural miscues, and more.

But don’t let the prospect of this challenge put you off. For as many obstacles as there are for communicating with your outsourced IT team, there are just as many solutions. And reputable providers, such as SENLA, cherish their reputation and always seek to make their service to Clients top-notch.

To prove this to you, we’ve compiled an entire article on “How To Ensure Effective Outsourcing Communication With a Software Development Company”, packed with our practices, developed for 10+ years in the market. If you’re interested in how we approach outsourcing communication — be sure to read this.

Outsourcing software development to a team outside of your company means they’re not subject to the same rules regarding payment, data security, compliance, etc. that you’ve already established for your company. That’s why when you settle on a remote development company, it’s important that you negotiate a thorough, iron-clad contract that protects your company, your data, your assets, and, most importantly, ensures your money isn’t wasted.

The timeline of your software development project is something you should be up front about with any software development company. Keep in mind that you don’t control the hours and days they work, unlike with your in-house developers. 

But many companies can also work faster than your in-house team because they have access to more IT experts than you do. So, know how much time you’re able to give and what your desired timeline is, and communicate that fully to the outsourcing company, so that they can recommend an appropriate solution. 

Finally, you should consider how you want to manage your outsourced software developers. There are different solutions available. In some cases, you can be completely hands-off, and in others more actively involved. Even though they’re not sitting at a desk directly in front of you, you can still maintain control of your project when outsourcing. It’s simply up to you to decide how much control you want to retain and how much you want to trust the developers.

At this point, you may be wondering what the real differences between outsourcing and in-house software development are. 

In addition to the variations in management styles, communication strategies, and talent pools, which we’ve already referenced, let’s discuss recruitment time, time until full productivity, and project costs.

First, recruitment time is far less than it is for hiring in-house. Hiring a developer in-house can take over a month; and that’s just one IT team member. Furthermore, you may not be able to fill every position on your team concurrently, especially in 2023’s competitive job market. 

Speaking of time, let’s look at time until full productivity. Even after you recruit software developers, you still have to train and onboard them. This interval period can last anywhere from 3-12 months. That means that your team may not reach full productivity for up to a year from their hire date.

Finally, we want to mention project costs because they are a huge aspect of any software development venture. Outsourcing greatly assists in smart cost optimization because, first, developers’ salaries are often lower in other countries than they are in the US. 

Additionally, and as we alluded to earlier, companies who outsource aren’t responsible for paying for vacation or sick days, or for updating their entire infrastructure to accommodate an IT team. These factors often make outsourcing software development a more cost-effective choice than in-house hiring. 

To get a broader overview of the topic, read our article, “In-House Vs Outsourcing: Which Software Development Approach is Better?”

For more than 10 years of our operation, we found these practices to be extremely helpful for those who outsource software development. If you decide to do it, be sure to follow them for optimal results. 

Even experienced business owners aren’t always trained in legalese. In companies, where there’s an in-house legal department this isn’t a problem. But if you don’t have one, our advice is to definitely engage an independent expert to help you conclude an outsourcing contract.  A lawyer will communicate all aspects of the contract with you, make the expected duration of the project, parties’ liabilities and liability for non-delivery clear. 

Communication really is key, and that’s why we want to bring it up again as a best practice. To that end, always keep lines of communication open. Even if there are weekly progress meetings scheduled, there may be emergency situations when developers need to speak to you about an important matter or get clarification. It’s best that they can get a hold of you as quickly as possible, rather than making them wait and then possibly delaying the project.

Finally, when outsourcing, maintain flexibility. Just like with in-house software development, things happen beyond your control. The scope of the project may turn out to be bigger than anticipated. There could be delays in the project from power outages or extreme weather. It’s best to be flexible and allow for extra time and manpower, if needed, to achieve the best results possible.

What makes a software development company a great fit for your business? Here’s a squeeze from it. Here are areas of strength to look out for in a prospective outsourcing partner.

 An ideal outsourcing partner will have a large team of IT experts that they can deploy as needed to bring your project to full completion.

SENLA has 700+ experts in 5 development locations around the globe.

From our side, we constantly measure team capacity and share the information with our Clients, which allows them to be aware of the efficiency and transparency of the team's work. We track the capacity to recognize where and how workflows can be improved to increase team performance.

A competent outsourcing partner will offer you a wide range of services. They won’t just have software developers, but also business analysts, UI/UX designers, architects, and more – whatever you need to get your project to the finish line. 

As a full-cycle software development company, we have all needed SDLC experts to support your development.

A trustworthy outsourcing partner has multiple case studies ready to show you how they helped other businesses achieve their software development objectives.

Visit our cases section to see how we work.

Speaking of engagement models, we’ve already touched ours above a bit from a management standpoint. Now, let’s expand on them a little more, reviewing their benefits and use cases.  

If you need more hands for your teams but can’t afford expanding in-house (having tight deadlines or budget constraints) — this is what you need. Under this model, one or more our experts join your team and start helping it within just 5-10 business days. They work directly under your supervision and report directly to you (or your assigned staff), basically becoming your full-fledged staff. And, of course, don’t forget about the high quality with smart cost optimization coming into play, with lower remote developers’ rates without sacrificing quality.

Actually, smart cost optimization is present with any model. And the bigger the integration volume — the bigger the cost optimization. Let’s see why.  

If you don’t just need a couple of hands to facilitate development but something bigger, e.g. to implement a feature or integration, our dedicated teams are the most go-to option.

With this model, we assemble one or several fully self-sufficient teams with all the experts you need. They start delivering in as little as 5-10 business days and, thanks to a techlead supervising each team, take a significant burden of micromanagement off your shoulders. As said, we typically use bi-weekly sprints with Friday demos for sync but, if you need more control, we are open for a discussion.

And don’t forget that the more experts you bring in with lower rates — the bigger cost optimization you achieve. 

In this model, a development center consisting of dozens of IT specialists will take on whole projects and provide long-term custom software development. You may still have an IT staff in-house, or you may allocate all the work to the development center.

If you need a custom solution developed from scratch — of any complexity — our development center is the model. It is designed to accommodate the full cycle of your development needs, from a discovery phase to post-launch long-term maintenance. For this reason, we staff your center with all necessary SDLC specialists, from BAs to AQAs and DevOpses. 

Basically, we want you to be able to come to us and say “I want a custom solution”. And we could already start helping you from there. 

And we didn’t say “your center” just for nothing. It is indeed yours: we can allocate a detached space for a team within our premises, brand it with your merch, and give our staff your machines to work on — everything to underline that these people are working for you. And we’re highly supportive of such initiatives. We want you to feel safe when choosing our development center, as if it’s your own office, just remote. 

And, of course, don’t forget that such a level of integration (a development center can give out up to 100 SDLC experts per year), will drive simply enormous cost optimization. Once again, you can see its estimate for your requirements with our calculator.  

These are not all features of our engagement models. To learn more about their peculiarities of operation and see their face-to-face comparison, visit our blog article “How To Choose an Engagement Model,” fully dedicated to this topic.

The key strengths of software development outsourcing include optimizing the costs of hiring and paying employees in-house, accessing a global pool of talent, enhancing your workplace diversity, and reducing the complexity of your organization. Pitfalls like lack of communication, lack of vision, and mismanaged expectations can be gracefully addressed with proper diligence and by keeping all lines of communication permanently open, right from the reading of the initial contract. 

If you follow our best practices and know what to look for in an outsourcing company, we’re confident that you’ll arrive at the best solution that helps you achieve your unique objectives for software development.

Or, if you feel like you’ve already found one — drop us a line in the form below and let's create something epic together.