Pros And Cons Of Outsourcing To A Software Development Agency

Along with that, constant communication and management are crucial to the success of the project. Moreover, a software development agency also provides you with roles required for development like project managers, scrum masters, QA experts, UI & UX designers, etc. If you wish to improve the ranking of your site, then you can also get digital marketing experts. No doubt that the outsourcing approach will save you a lot of money. If you are in a country where the local developers cost a lot, such as in the USA, UK, Europe, Australia, and other countries, you will have the advantage of outsourcing. There are IT firms in countries such as India, Indonesia, Ukraine, etc., where highly talented developers work at very reasonable rates compared to western countries.

outsourcing software development pros and cons

With a software development agency, once you set a timeline and agree on a budget, it’s up to them to get the work done within those constraints. However, many companies outsource development work and then develop their programs internally. The choice between in-house development and outsourcing depends on company size, resources, expertise, time frames, and business goals. In-house software development means leveraging company resources to develop or implement software according to specific company requirements.

What Is A Software Development Agency?

Whenever you assign a project to a new team, you run a certain risk. Even with good reviews and positive first contacts, there is still a chance of miscommunications, delays, features developed differently than you expected, and other challenges. IT leaders find capacity the main challenge in software development. Listen to our podcast in which tech founders reflect on their journey of building a successful startup and reveal their secrets to success. While they aren’t usually able to take on more extensive software projects, they can still be helpful partners to businesses. Technical debt isn’t always a bad thing, it does need to be managed to make sure it doesn’t get out of control.

This flexibility is next to impossible with in-house development. You have to hire new team members, which takes a lot of time, and firing them after your work will tarnish your company’s reputation. As the name indicates, in the in-house software development approach, you have to build your team on your own from scratch. It is like hiring other permanent staff; this team will be responsible for your app or IT software. It involves the long process of job posting, checking job applications, filtering the applications, scheduling & taking interviews, and hiring suitable candidates. ” And there is no definite answer to this question, even though outsourcing in the IT industry is expected to reach a valuation of $98 billion by 2024.

Many organizations are wary of working with software development companies that cannot provide compelling evidence of their security practices. Some developers simply don’t have the wherewithal to enforce security measures. Finally, outsourced teams often have the necessary resources to quickly put together the tech stack required for your project. An in-house team may have a deeper understanding of a company’s industry and business model.

With even the biggest names in the software industry opting to outsource projects, it is clear that outsourcing is becoming a more popular alternative. Smaller developers stand to benefit the most from outsourcing, not just because it offers competitive pricing, but also due to the wide range of options at their disposal. It is important to weigh outsourcing software development pros and cons to determine whether outsourcing is the right move for your company. Outsourcing app development means you can get the product development immediately. The hired agency will assign the resources per the requirements and will try its best to start the project as soon as possible. As per our experience, at least one month is required to recruit a skilled specialist.

Why Outsource Programming To Ukrainian Developers?

In fact, IT has already become one of the key sectors of national economics. Around 36K of tech graduates are produced annually by more than 400 higher educational institutions. And what’s more important, the informational technology industry currently creates around 4% of GDP.

IT outsourcing is an extensive practice among enterprises of all industries, structures, and sizes for a valid reason. Especially if the business doesn’t require such services on a regular basis. On the other hand, if you’ve built a tech team, outsourcing some tasks can upgrade the skills of your experts and open new horizons for the whole company. Most companies base their decision to outsource on whether it is more available than hiring in-house developers.

  • You will meet the PM in the very first stage of your project development and will work with them on its plan.
  • Thus, there will be no roadblocks in scaling up or down your project.
  • When you decide to outsource your product development, for example, your PLM software development project, or web design project, you are not limited by your geographical location.
  • Due to the adoption of agile methodologies, the client can see all stages of development.
  • LeanyLabs is a web application development company that offers full-cycle project development and team extension services.
  • Since the vendor handles all the hiring and administrative tasks, you can focus all of your attention on the business aspects of a project.

You will not have direct communication with the team, so you will not be aware of what’s happening in the project. However, companies like us provide a project coordinator who gives you regular updates on the current tasks going on. While outsourcing, you have the flexibility to find the right talent as per your requirements. Big tech firms like us have talented and skilled developers with expertise in various technologies.

Dedicated Team

Now, let’s take a closer look at the downsides of having an in-house software development team. You can manage your team more effectively as you deal with direct hires working exclusively for your company. Setting work schedules or requesting fixes and changes is a pushover. So, with in-house developers, the path from idea to production is often much shorter and quicker.

outsourcing software development pros and cons

Jumping the gun and commissioning a project without these things in place can lead to a product that simply doesn’t do what you need it to do and, ultimately, waste money. For instance, an industry-specific need might be a mobile app that serves as a social network for a specific group of people. Or perhaps your startup needs a custom application that can give your workers out in the field access to a centralized database for project management. New development technologies such as programming languages, libraries, frameworks, etc., appear too often. By choosing a software product outsourcing, you get experts whose job is to be in tune with the existing and future trends.


You may be worried about the agency’s privacy policy and whether they can use or share that with your competitors. However, professional companies like us provide an NDA and keep the data highly secure. There is a continuous evolution in the IT industry, and the technologies, tools, and languages are changing at a high pace. Thus, you must ensure that your team keeps up with these changes and works for their upliftment.

They need to have enough resources and infrastructure to support software development on their own. PixelCrayons provides advanced and powerful software solutions that can be customized as per specific business needs. Get opportunity to work with India’s top 2% developers & coders who have excellent development skills in a wide array of software technologies. The manager will understand your needs and provide a quote, Scope of Work, and other documents.

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Additionally, your project may require highly specialized skills, such as virtual reality or AI. Finding such a broad range of experts may take quite some time. The time that could otherwise be spent doing the actual work on your project. If you begin your project by putting together your own startup development Outsourcing Software Development team, this will likely throw you off schedule quite considerably. No matter where they are located, whether they work together or remotely, this deep pool of development talent will maximize the creation of your product. Software development agencies are responsible for the administration of their teams.

Disadvantages Of Outsourcing Software Development:

On the other hand, in-house teams dealing with certain issues for the first time might have difficulty circumnavigating those roadblocks. As a result, your budget could get blown out of proportion with programming errors and missed deadlines. It’s easy to assume that developers will work more productively in one office under your manager’s watchful eye. As BBC reports, Ukrainian IT startups have received USD 571 million worth of investments in 2020, which is a record. This means that investors see potential in the Ukrainian IT market even despite the pandemic.

With the administration aspect of development handled by your agency, you have more time and resources to devote to other aspects of your business. Outsourcing saves development time because you don’t have to wait for new employees to be hired, trained, and up to speed. Video calls, email updates, video demos, instant messages, etc., are bringing the outsourcing company and software provider much closer in terms of collaboration. If the software company is wrongly chosen or is not fit to develop according to exact requirements. A big risk is the possible loss of information, as your idea will be shared with some vendors. Create an NDA and make sure your vendors sign it to avoid possible loss of information.

outsourcing software development pros and cons

Usually, these agencies work closely with internal business and IT stakeholders to understand the challenges, requirements, and other use-case-specific details. With this information, their development teams then work to develop solutions in line with client requirements. Especially if you don’t already have highly skilled and experienced tech leadership in place. Running a development team requires skilled talent to do the development and design, as well as experienced product management teams to provide oversight, guidance, and accountability.

The hiring process itself is quite costly in that you have to hire an HR who will further hire other team members. And you’ll be working with tech specialists operating from the same office most of the time, which guarantees better collaboration and greater efficiency. Even tech giants find merit in outsourcing software development. You have better chances of finding the right tech talent if you don’t restrict your search to your area or country. The internet lets you cast your net wider and catch top pros from all over the world. Zero in on the countries known for their top-notch tech specialists — for example, Ukraine.

In the outsourcing approach, you primarily communicate with a project coordinator or project manager who may not understand the technicalities that a developer can. The in-house development team mostly works in the physical office space, which you can quickly contact. Recruitment takes time, especially when searching for rare tech talent. An outsourcing arrangement lets you forego a tough hiring process — simply onboard a development team with all the expertise and experience you need.

Relevant As An Outsourcing Partner

However, cooperation on a fixed cost basis works only if you already have a detailed realistic specification and plan to make no changes. If you’re not sure which features to implement first or how the existing system will interact with the changes you plan to introduce, a fixed price contract is not for you. Appointing a product owner on the vendor’s side helps to eliminate misunderstandings between the parties. As the customer, you are the one to coordinate all the key processes and control the outcomes. Once an identified error is fixed, developers then forward the software back to the QA team for re-testing. While some companies are known for coding excellence, others offer stellar consulting services.

Advantages Of Outsource Software Development

While the mentioned reasons against trusting your IT worries to a software development outsourcing company are valid, they all are easy to eliminate. Outsourcing business models can be divided into cost and staff categories. Increasing productivity, improving product quality, and saving costs are only a few of the benefits outsourced software development has to offer. You won’t successfully outsource IT development without thorough planning, though, so having a solid outsourcing strategy is the first step toward hiring a vendor to cater to your needs.

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