7 Key Reasons Why Companies Outsource Software Development

Software development outsourcing involves engaging with a third-party team or partner to help develop your company’s software solutions. When an organisation is developing a new piece of software or establishing a business based on a software concept, they often think that the only option is to build their own team of software developers. However, there is a faster, more scalable option. 

If you’ve never outsourced software development before, it might seem like a daunting prospect. Placing your trust in an outside group to deliver the results you need can be intimidating. CTOs often say that in-house development teams are their preferred solution for scaling software operations. They think that there’s no way an ‘external’ team could understand their product, or be trusted to work within the particular environment. 

While building an in-house team is sometimes the way to go, if you choose the right outsourced software development partner it should feel like an extension of your own team. Whether they are working in-house or as part of an outsourced unit, all developers will share the same objective; to develop software that strengthens your business and allows you to achieve your goals. 

The only difference is that the responsibility of recruiting, training and managing additional developers has been handed over to someone else. In this way, software development outsourcing helps businesses achieve greater economies of scale and is often seen as a more viable option for scaling companies.

Why Companies Choose to Outsource Their Software Development 

With the increased popularity of remote working, engaging with outsourced software development partners has become much more commonplace. In this blog post we will look at some of the main reasons why companies outsource software development. 

1. Access to a larger pool of talent

For companies looking to hire developers in the United States, the software engineering and software development talent pool is incredibly competitive. Demand is at an all-time high and hiring suitable, highly-skilled candidates can be a very difficult process. 

By engaging with an outsourced software development partner, you bypass this issue and open up a whole new pool of talent. Outsourcing software development removes geographical boundaries and gives you access to a pool of world-class talent. 

2. Costs

Outsourced software development partners often build teams in areas with a lower cost of living and thus lower labour costs. Organisations also avoid costly upfront investments in infrastructure, development tools and licences. While this is obviously a great benefit to a growing business, our advice is to never put cost-saving before quality. Always aim to maintain an acceptable cost-to-quality ratio. 

3. The Ability to Scale Up and Down Resources

One of the main reasons that organisations engage with software outsourcing partners is the ability to scale up and down resources. Organisations often only need to increase numbers for a short period of time or to achieve certain project objectives. When a project finishes, and you’re left with a bloated team, this can put a major strain on resources. When working with an outsourcing partner you don’t need to hire developers on a full-time basis. You can build a team depending on the workload and current tasks. This removes a major headache for CTOs.

It’s important to remember that outsourced software development teams can work alongside, and complement, in-house teams. Companies can have a small group of permanent employees alongside a flexible outsourced software development team.  

4. Gain Expert Domain Knowledge 

When hiring in-house talent, organisations need to think about more than just specialised skills. On top of finding highly-skilled individuals, companies have to consider domain expertise. Developers and engineers need to understand the industry and its requirements. Finding candidates with this level of proficiency can be a real challenge. 

Great software development partners often work with businesses in a few specific industries so that they can gain invaluable domain expertise. For example, at Keeper Solutions we primarily work with MedTech, FinTech and CleanTech companies. This has allowed us to gain a huge amount of domain expertise. This in turn allows us to  understand the market from a user’s perspective and build better products.  

For scaling companies, working with a team of niche experts is incredibly beneficial as market understanding is already baked-in. Experts can help you choose the best features for your product, advise a tech stack that suits your requirements and ask questions that you might not have even considered. 

5. Focus on Core Competencies

All too often, fast-scaling companies lose sight of the very thing that made them successful in the first place. By trying to build a broad range of skills in-house, and tackle every challenge themselves, companies often stretch themselves too thin. A much more sensible approach is to outsource the projects that you are less experienced in so you can focus on your core expertise.

6. Faster Time to Market 

The time it takes to get a product to market can make or break a business. Getting your product to market before your competitors can provide a significant and long-lasting competitive advantage. When you are building an in-house team from scratch, a huge amount of time can be wasted on hiring, and then training, new recruits. 

With an outsourced software development team, businesses can scale up their development capabilities quickly and effectively. This allows them to focus on getting their product to market as efficiently as possible.  

Top Tips for a Successful Outsourced Software Development Partnership

There is a lot to consider when choosing an outsourced software development partner. You want to find a company that shares your values, standards and work philosophies. You also need to consider the particular project domain, how close in proximity you want to be to your outsourced team and their level of experience.

For those that are considering an outsourced software development solution, here are our five top tips for ensuring operational success