13 Advantages & Disadvantages Of Outsourcing Software Development

Outsourcing is becoming more and more common because it provides business owners with several perks. The returns from outsourcing are hard to miss.

Outsourcing has gained popularity more than ever before. With outsourcing, a business assigns functions to an external provider instead of performing them in-house.

The pros of outsourcing software development increases flexibility, saves operational cost, time, and gives access to a ton of professionals on the go.

You can obtain the best skill set through outsourcing and connect with talent all around the world. This closes the gaps that your company’s resources can’t.

You can hire specialized developers that are proficient in cutting-edge technology to work on projects in emerging industries like blockchain and artificial intelligence.

Other benefits include the management of the business environment, elimination of capacity issues, enhancement of service quality, and driving extensive transformational change.

Who would have thought that a thing with such advantages could have downsides? Well, such is life! Here are some benefits and demerits of outsourcing software development.

1. Cost savings

The alternative to outsourcing would be onboarding, training, and housing employees.

These processes can be costly, especially if you do not need the service every day.

While cost may not be the chief driver for outsourcing services, it is a welcome outcome.

You can access qualified developers who have been screened by the business and whose abilities have been put to the test on several projects.


Working with an outsourcing software firm entails utilizing tried-and-true software development processes.

Methodologies don’t have to be invented from start. In order to guarantee the project’s success, the service provider already follows a set of procedures, industry best practices, and collaboration ethics.

To determine what best meets your goals, you simply need to set aside some time to focus on the upfront planning using the services that your technology partner provides.

There are a number of benefits to outsourcing your project. All other projects that can be outsourced will eventually be outsourced, with the exception of programs of national importance and software projects related to defense.

3. Access to the latest technology and best skillset

When you outsource your software development needs, you have the opportunity to access a large pool of global professionals.

You can work with specialists and third-party vendors from all over the world. Access to teams who have worked on numerous projects and created numerous applications quickens the development process, and guarantees high quality throughout the project.

Moreover, you get to work with the latest software solutions since most specialized companies embrace current trends.

The teams in these companies tend to dedicate time to acquaint themselves with knowledge on recent trends and already have a clearly defined procedure and workflows that keep everyone active.

Outsourcing software development means taking advantage of the skillset and you will be confident that your solutions are future-proof and more efficient.

4. Reduced risk

You may relax knowing that your job is being handled by professionals who will complete your project effectively.

Additionally, the overall risk is decreased when premium talent is matched with your needs.

Outsourcing keeps the project transparent and produces good outcomes because they have their own leadership models (software delivery managers, team leads, project managers, CTOs).

5. Time savings

One of the numerous benefits of outsourcing is time savings.

Outsourcing serves as the perfect quick fix for your IT needs. Collaborating with another provider takes less time than hiring new team members.

Hiring and negotiating compensation for a full-time employee would be a time-intensive exercise. But with outsourcing, you get to delegate the hiring process to the external party.

6. It allows you to focus on your core functions

Outsourcing software development allows your business to concentrate on your core functions.

If you are planning to build new products, you can hire a Backend Development Company that helps to build your brand, invest in research, and focus on business growth.

You can then focus on developing innovative ideas that will contribute to growth for your business. That is because you no longer have to divert your limited time and resources to developing applications.

They can deliver high-quality services better when focusing on their chief tasks. Your team can sit and relax knowing that the technical aspect of software development is in the capable hands of the outsourcing partner.

Your customers can enjoy value-driven services since they enjoy undivided attention from your staff.

7. Allows access to a broader market

When you outsource IT support and software development, you allow your business to grow in multiple directions.

The chance to work with high-quality developers at the top of their game boosts your performance and increases the likelihood of reaching a broader audience.

Your internal team can free up their energies for other crucial business functions like research developments and brand building.

They will not have to divide their efforts on different projects.

8. Outsourcing introduces a fresher perspective

Your current team is accustomed to handling their daily routines. The daily-work patterns may stifle creativity and thought-provoking ideas.

The goal of outsourced software developers is to assert themselves and show the world that they are legitimate professionals.

The advantages of this way of thinking include the urge to produce work of the greatest caliber and establish the best working connections.

Partnering with an external team introduces new knowledge and feedback on where to improve.

The fresh set of eyes will serve to boost your work and productivity.

9. Allows for quick delivery

The IT environment is constantly shifting. And the product development cycle can be time-intensive. You may have to dedicate a significant chunk of your time to creating applications.

Amid the core activities, it may take you up to several years to develop a complex platform that is up to date with the current trends like AI and machine learning.

But remember, you have to innovate quickly to remain competitive in the market. One way to speed software development processes is to outsource.

Outsourcing to a specialist team will accelerate the time-to-market that would have otherwise taken ages had you been relying on your in-house team.

Having an external party working for your team is one of the significant business success factors. You can deliver higher-quality products to the market in a shorter time. 

10. You get to maximize resources

You may have a capable in-house team. However, the most efficient use of the team’s time and knowledge may not be to work on every issue that arises.

Look at the time it takes to perform the different tasks to understand what is at stake. You will find that the wisest option is not allocating your top talents to IT support.

That could take away from the time they would have spent on activities that contribute directly to your business goals.

With outsourcing, you get to maximize resources. The outsourcing company will suggest flexible options and external teams to work on specific projects.

You also do not have to train new employees if the skill set you need is foreign to your team members.

11. Risk sharing

With in-house software development, all the risks fall on you. You have to bear the cost of any accidental mistakes your team makes.

A simple way to cut your risks is outsourcing an experienced company to partner with to create your software products.

It helps that, in most cases, the outsourcer is a legal entity that will cover any costs from error arising in the development process. They have insurance to cater to such occurrences.

It is therefore considered safer and more affordable to outsource software development to eliminate risks, or at the very least, share them.

12. You have access to specialized software expertise

It is next to impossible to have an in-house team with expertise in every language, technology, or skill. In some cases, you will need a skillset that your internal team does not possess.

In such instances, outsourcing comes to your rescue. Software development companies spend significant money and time keeping their teams updated with the latest methodologies and software.

That means that you get to access specialized software access and emerging technologies.

With an outsourcing company, you get an opportunity to access a qualified pool of developers with expertise that you only need temporarily or may not have in-house.


It’s usual for businesses to have conflicting goals that must be accomplished in a limited amount of time.

For instance, you might be required to simultaneously introduce a new limited edition product to enhance customer experience, create a dashboard to provide a clearer picture of your company’s performance, and enhance IT security.

It doesn’t matter if you’ll be able to accomplish all of these objectives. It’s about meeting these deadlines, which is essential for any company in any field. Companies that are agile have a competitive advantage and are capable of handling so much.

Having an outsourcing firm as a dependable partner can assist your organization to accelerate software development and relieve pressure on your staff while maintaining your business focus.

Disadvantages Of Outsourcing Software Development

1. Quality issues

This is one of the commonest and most prominent disadvantages of outsourcing. The contractor you hire is exclusively in control of the quality of the result. This might be a good thing but on the other hand, it is a herculean task to find the contractor that would deliver on the quality you specified.

Though I wouldn’t say it is impossible, the chance of hiring a contractor that would deliver quality software is slim. 

Yes, you can tell me this could be avoided. Of course, it could be avoided, but at a cost. It will cost time and money. You will need more time to find contractors that will render quality service.

This means you spend more time reading reviews, interviews, and following up on any of their past innovative software projects.

It will also cost you some money. Quality products and services, especially software, don’t come in cheap. More on this later! Don’t get misled by the quality guaranteed sticker from any contractor.

2. Unfulfilled Promises

A lot of contractors in the outsourcing market have low responsibility and they aim to get as many orders and gains as possible. They don’t mind cutting a few corners just to get a higher profit.

While there are great contractors out there that are bent on giving the best service when it comes to software development, a great deal are just out to find the easy way to make a profit.

You shouldn’t take their word for it, you should get concrete shreds of evidence from any contractor that would work on your software development projects.

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3. High long-term cost

Getting a contractor isn’t a problem. In fact, it is not so hard to get a contractor that meets your standard. The hassle is finding the contractor that perfectly fits your budget.

Oftentimes, a few boxes are left unchecked by these contractors. For instance, relatively cheap contractors seldom check the quality box.

Conversely, contractors that offer quality service don’t check the low-cost box. Following the trend for the last point, you can infer that as the quality of service you expect increase, the cost you incur will significantly rise too. A binding clause of outsourcing is responsible payment.

A quick look at outstaffing and outsourcing will show you that outstaffing is more economically attractive. The only caveat is that it is combined with your charge.

While outsourcing can save some costs, it does so only in the short term. Outsourcing software development projects would cost you more in the long run. This is because you are paying for in-demand contractors.

These contractors have a vast, effective, and specific skill set but paying for this level of skillset is very expensive. You shouldn’t incur as much cost (sometimes just above the half mark) on an in-house developer with the same level of expertise.

4. Communication

The world is considered a global village, thanks to the internet and social media for business. With a few clicks, you can instantly talk to anyone anywhere in the world. With this in mind, who would think communication will make it into the list of the disadvantages of outsourcing software development?

Time zones are somewhat of a difficulty when you want to communicate with your developer on the other side of the globe. You can indeed reach anyone at any time in the world but not everyone would be available to or appreciate being bothered during their non-work hours.

If you are in Europe and your contractor is some six hours ahead of you somewhere in Asia, this might not be an issue. You can still communicate for a few hours during work hours. But, imagine you are in the United States and your developer is in Asia, then effective communication could become an issue.

Once your working hours do not overlap with your developer’s, then communication becomes a challenge.

Visualize this, your developer in Asia delivers a prototype a couple of hours before closing. You received the prototype almost instantaneously (very early in the day) but you want to make some changes.

Though you replied to your developer in a couple of minutes, you did not get feedback until the second day. This communication delay can not only slow down the progress of the project but can also demoralize all parties involved.

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5. Distance

Akin to communication, distance does not seem like a hindrance at first but a close look may surprise you. The distance between you and your developer can become a barrier. You might want to take transportation, supply chain, and logistics into account. An instance is having an onsite meeting with your developer.

While your developer can get to your location in less than 24 hours, it might take days or sometimes weeks to put the logistics in place. You’ll need to book flights, reserve accommodation, prepare a workspace, and shell out money for all these.

Another instance is the supply of hardware to the developer and delivery of the finished product to you. This might take weeks and sometimes months to get to you.

6. Ethics

Other issues you could run into when outsourcing your software development include issues relating to ethics. You could hire a developer that steals information or sells off part of your software.

Of course, there are measures, such as a non-disclosure agreement and fraud monitoring systems. You could take to mitigate against this but you still run the risk of hiring a contractor that could breach the agreement.

Wrapping Up

Outsourcing software development simply means transferring all or parts of the software development function or project to a third-party service provider.

This service provider could be anything from a freelancer (developer), third-party contractor, an outsourcing firm, or software development firm.

Outsourcing your software development needs may be the best idea for the reasons above and more.

Not only will you save time and money, but your business will also enjoy some advantages of commonly outsourced services such as advanced technology and knowledge.

You should also be careful about the downsides while outsourcing. Outsourcing software development is great but you have to be cautious when you hire a contractor.

This is the only way you will be able to avoid the disadvantages that come with outsourcing software development.

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Post Author: Abimbola Joseph

Abimbola Joseph is a creative content developer who derives pleasure in encouraging individuals to be the best they can be in all relevant facets of life. She believes that we all have a better version of ourselves which can be leveraged to impact others and make the world a better place. Connect with me on Instagram @abimbolajoe.

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