Outsourcing Software Development in Small Business

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By Lucas Green

Small businesses are always looking for ways to save money, and one way to do that is by outsourcing software development. But before you decide to outsource, there are a few things you need to consider. 

In this article, we will discuss the pros and cons of outsourcing software development and help you decide if it’s the right decision for your business.

What Does Outsourcing Entail?

Outsourcing software development simply means contracting with a third party to handle all or part of your software development needs. This can include anything from developing a new website to designing and building a new mobile app.

For example, you may have an in-house team of developers, but you decide to outsource the development of a new app to a company that specializes in mobile app development.

The Pros of Outsourcing Software Development

There are many reasons why outsourcing software development can be beneficial for your small business.

1. Cost-Effective

One of the biggest advantages of outsourcing is that it can save you money. When you outsource, you only pay for the services you need, when you need them. You don’t have to worry about paying employee salaries, benefits, or other overhead costs.

The company you’re outsourcing to also handles all of the risks that come with onboarding a new person. This means that if the project doesn’t work out, you’re not stuck with an employee you can’t afford.

Additionally, many outsourcing companies are located in countries with a lower cost of living, which means they can offer their services at a lower rate.

2. Access to Expertise

When you outsource software development, you have access to a team of experts who can get the job done quickly and efficiently. These companies specialize in software development, so they have the experience and expertise that you may not have in-house.

This can be especially beneficial if you’re working on a complex project or if you need someone with specific skills or knowledge.

Instead of wasting months finding the perfect candidate, let alone the perfect team, you can instantly have the help of all of the best experts in your industry at a fraction of the cost. 

Knowledge and expertise are hard to come by, so an opportunity like this shouldn’t be taken lightly.

3. Flexibility

Outsourcing can also offer you more flexibility when it comes to your workforce. If you only need someone for a short-term project, you can simply hire someone on a contract basis.

This can be especially helpful if your business is seasonal or if you’re not sure how long you’ll need someone.

On the other hand, if you find that you need someone full-time, you can always convert them to a full-time employee. This flexibility can give you the best of both worlds.

4. Increased Focus

When you outsource software development, you can focus on what you do best: running your business.

You don’t have to worry about managing a team of developers or trying to keep up with the latest trends in technology. That’s the job of the company you’re outsourcing to. Time is precious to everyone, but especially to a business owner. Use it more wisely by outsourcing.

5. Improved Quality

When you work with a team of experts, you can be sure that the quality of your product will be top-notch. These companies have a vested interest in ensuring that their work meets your expectations and that you’re happy with the final product.

They also have the experience and knowledge to design and develop a high-quality product, which is something you may not be able to say about your in-house team.

6. Reduced Turnaround Time

Completing your projects will also be much faster, as you won’t have to spend time training your in-house team or getting them up to speed on the latest trends.

The company you outsource to will already have a team of experts who are ready to start working on your project immediately. This can help you get your products and services to market much faster.

Factors to Consider When Choosing an Outsourcing Company

Now that you know the benefits of outsourcing software development, it’s time to choose a company. Here are a few factors to consider:

1. Location

The first thing you need to consider is the location of the company you’re outsourcing to. If you’re looking for a cost-effective option, you’ll want to find a company in a country with a lower cost of living.

This will help you save money on labor costs. Additionally, it’s important to consider the time difference between your country and the country of the company you’re outsourcing to.

You don’t want there to be a large time difference, as this can make communication difficult.

2. Services Offered

Next, you need to consider the services offered by the company you’re outsourcing to. Make sure they offer the services you need, such as web development, mobile app development, etc.

Additionally, it’s important to make sure that they have a good understanding of your industry and your specific needs. For example, working with a Django development agency would allow you to get a team of experts who are familiar with the Django framework and can help you develop a high-quality product. Or, if you’re in the eCommerce industry, you may want to consider working with a Shopify development company.

3. Portfolio

When you’re outsourcing software development, it’s important to look at the company’s portfolio. This will give you an idea of their previous work and the quality of their products. This can lessen the risk of hiring a new company, as you’ll already know what they’re capable of. A company that doesn’t list their previous clients or projects is one you should avoid.

4. Reviews

Finally, you should read reviews of the company you’re considering outsourcing to. This will give you an idea of what other people have thought about their experience with the company.

When reading reviews, be sure to pay attention to both the positive and negative comments. This will help you get a well-rounded view of the company.

As well as that, don’t forget to check out their social media accounts. This can give you an idea of their customer service and how they interact with their clients.

Are There Any Downsides?

While outsourcing software development comes with many benefits, the process is far from perfect. There are still some things that could go wrong, which is why you should be aware of them before making a decision.

1. Hidden Costs

One of the potential downsides of outsourcing is hidden costs. For example, some companies will charge you for training their team or for getting them up to speed on your industry.

Additionally, there may be other unexpected costs, such as communication fees, which can add up over time.

2. Less Control

When you outsource software development, you’ll have to give up some control of the project. This can be difficult for those who are used to being in charge.

On top of that, it’s important to remember that the company you outsource to is running a business. This means that their priority is making a profit.

They may not always have your best interests in mind, which is something you need to be aware of.

3. Difficulties with Communication

Another downside of outsourcing software development is that communication can be difficult. This is because of the time difference between countries and the language barrier.

It’s important to remember that miscommunication can lead to problems down the road. This is why it’s essential to have a clear plan in place before you start working with a company.

4. Security Risks

When you outsource software development, you’re also outsourcing your data. This means that you need to be careful about who you work with.

There have been cases of companies stealing client data or selling it to third parties. This is why it’s important to do your research and only work with a reputable company.

5. Dependence on the Company

Finally, you need to be aware that outsourcing software development can lead to dependence on the company you’re working with.

This is because they’ll have all of the knowledge and expertise needed for the project. If something goes wrong, you may not be able to fix it without their help.

This is why it’s important to have a plan in place in case you need to end the relationship with the company.

How To Overcome These Challenges

While there are some potential downsides to outsourcing software development, there are also ways to overcome them.

1. Define Your Objectives

The first step is to define your objectives. This will help you communicate your needs to the company you’re working with. It’s also important to have a clear idea of what you want from the project.

2. Do Your Research

Before you start working with a company, be sure to do your research. This includes reading reviews and checking out their social media accounts.

Additionally, you should ask for references from previous clients. This will give you an idea of what it’s like to work with the company.

3. Communicate Clearly

One of the most important things you can do when outsourcing software development is to communicate clearly. This includes setting expectations and establishing a clear line of communication.

4. Have a Backup Plan

As we mentioned before, it’s important to have a backup plan in place in case something goes wrong. This includes having a contract in place that outlines your rights and the company’s obligations.

5. Be Involved in the Process

Finally, it’s important to be involved in the process. This means staying up-to-date on the project and providing feedback along the way.


Outsourcing software development can be a great way to save time and money. However, there are some potential downsides that you need to be aware of. These include hidden costs, less control, and difficulties with communication.

Fortunately, there are ways to overcome these challenges. By doing your research and communicating clearly, you can ensure that your project is a success. Now that you know what outsourcing software development is all about, you can be more prepared for your new venture!

Author bio

Lucas Green is a young digital marketing enthusiast from Phoenix, Arizona, US. Passionate about graphic design, social networking, content writing and business in general. In his spare time he writes a lot about graphic design and business for DigitalStrategyOne.

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