Software Development Outsourcing: Key Points to Know the Sector Better

Devox Software
  • Date Published
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  • Reading Time 6-Minute Read

Want to know more about software outsourcing? Here is a complete guide to the pros and cons of this hiring model and the dominant hiring models it provides.

The global market is getting more virtual and digitized, which affects recruitment as well. Companies worldwide, regardless of the size and budget, choose to hire software development specialists abroad to tap the global talent and avoid the geographical constraints of the local labor market. Outsourcing is thus growing in popularity, though coming with certain risks and limitations the clients should also consider. Here we cover the major aspects of the outsourcing phenomenon and consider why or why not you may opt for it as a software development solution.

An Ultimate Definition 

Outsourcing comes as a time- and cost-saving alternative to hiring a full-size in-house software development team. The terms of cooperation with an outsourced IT provider are typically flexible, the turnaround is quick, and the pool of talent you may approach in such a way fits the just-in-time business needs.

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What are the Pros and Cons? 

While some firms outsource most of their operations, guided mostly by the advantages of this hiring model, others are still in doubt because of the associated risks. Let’s consider both in detail.


  1. Financial savings
  2. Easier access to the global talent pool
  3. Quicker project completion
  4. Variety of payment methods available
  5. Cost and time savings on in-house recruitment
  6. Greater flexibility in distributing core business tasks


  1. Problematic for those who have trouble delegating tasks
  2. Managing people at a distance сan be hard
  3. Time and language differences can erode performance
  4. Choosing a reliable vendor is a challenge
  5. Inherent risks to sensitive corporate data
  6. Digital communication issues
  7. Risk of suffering from hidden costs
  8. Poor control over product quality

Which Services are Available? 

At present, most companies choose to outsource five types of software development: web development, mobile apps, UI/UX design, DevOps consulting, and quality assurance.

  • Web development. Businesses wishing to increase or solidify their online presence outsource front-end, back-end, and full-stack development operations.
  • UX/UI. By outsourcing UX/UI design, you engage specialists in the creation of a clear, visually appealing, and highly usable interface of your web resource to improve its usability and increase customer satisfaction.
  • Mobile development. Mobile apps rule the world now, so companies with strong web presence expand the outreach by creating mobile-optimized web resources.
  • Quality assurance. Quality determines the usability of any web product, so outsourcing of QA tasks (both manual and automated ones) saves you the trouble and costs of remaking a flawed product at later stages, keeping quality under control during the development process.
  • DevOps consulting. DevOps was specifically developed to streamline IT service improvements and optimize your operational efficiency. By outsourcing DevOps services, you get access to sustainable operational advancements without significant input on your side.

How to Choose the Best Model? 

For those who have made a choice for outsourcing, here is a breakdown of hiring options for an outsourcing project:

  1. Outsourcing. This model presupposes that your software development team is the full-time staff of your vendor and works from the vendor’s office located abroad. It usually works on several projects at the same time.
  2. IT staffing. This option allows you to hire a team from scratch based on your project’s unique requirements and tech stack needed for its completion. The team will also work from the vendor’s office abroad, but on your project only.
  3. Staff augmentation. This is a highly flexible alternative to full-time hiring. It allows you to get as many developers as you need right now, both for short- and long-term projects, and for as long as you need. Most clients utilize this model of recruitment to compensate for the shortage of staff during high seasons or when their core staff is on sick leave or vacation.
  4. Dedicated team. Such a team is set up from the developers already hired by your vendor and works on your project only.

A Step-by-Step Guide to Launching Your First Outsourcing Project 

Outsourcing is not a single action; it’s a process. Setting up a productive and mutually satisfying relationship with an outsourcing vendor is possible if you follow eight crucial steps:

  1. Establish a clear project focus. First, it’s critical to understand why you are planning to outsource software development. Whether it’s the lack of staff, the high rates of local specialists, or the need to hire developers to give you more flexibility, these criteria will affect the vendor’s choice for sure.
  2. Decide on the outsourcing location. The most popular outsourcing locations include Asian countries and Eastern Europe. Choose wisely based on your budget, requirements for the coders’ expertise, and expectations regarding the partnership.
  3. Study the outsourcing vendors’ market. It’s short-sighted to turn to the first vendor you locate on the Internet. A much wiser path is to identify several vendors, to contact them directly with an inquiry about services, to make personal contact by phone or messenger, and to ask for a rough project estimate. Once you evaluate the speed and quality of the vendor’s communication with you and the price rates it offers for your project, you may perform a much more informed comparison.
  4. Make the final selection. It’s always the best to choose outsourcing vendors with long-term collaboration in mind, as having a productive but small project may open new paths for your further mutually beneficial work.
  5. Decide on how you’ll work and pay. Choose the model suiting you the best – whether you need short-term staff augmentation, longer-term outsourcing, IT staffing, or creation of a dedicated team, or a long-term and large-scale joint project of setting up an R&D center. Always negotiate and choose a mutually satisfying pricing plan at once, be it an hourly rate, a salary+fee model, or a fixed price for the entire project.
  6. Verify the staff’s credentials and skills. Always check the staff’s credentials to make sure they fit your project requirements, regardless of whether they are already in the vendor’s team or are hired specifically for your needs.
  7. Perform the onboarding. Try to visit the vendor’s office for the onboarding if possible, or at least hold an online face-to-face meeting to get to know everyone personally.

Let’s do it! Work with your remote team as you usually do with the in-house staff, by giving them timely feedback and praising good performance.

Want to Learn More about Outsourcing? 

This is a short variant of the article. You may read the full version, together with the comparison of outsourcing and insourcing alternatives and best examples of outsourcing projects, on the official website of Devox at