Why Many Companies Choose Software Outsourcing to Tackle Development Projects 

Running a business has many challenging and complex aspects. It doesn’t matter if you run an online store, a B2B firm, finance-related website, or online slots. On a daily basis, you will face a number of problems that, as a manager, team leader, or CEO, only you can solve. Of course, ideally, you will have a supportive team around you who will help you delegate and steer the right course. But, in today’s Uber-connected technological world, how much of that team should be run in-house, and what elements of your company can be outsourced?

One of the most frequent questions that business owners struggle with is whether software outsourcing is still a good choice in 2021. Businesses operating today often require large amounts of custom-built software and online storage in order to run and manage their companies. Software outsourcing and cloud services can be ideal solutions to many of the technical and logistical problems that businesses can face. Let’s take a look at the software outsourcing process and discuss how working with an external IT team could help you achieve your business goals. 

Software Outsourcing Definition

What is the function of software outsourcing from a business point of view? In today’s market, businesses rely on software for many things. For example, customer-facing software allows customers and users to interact with company websites, online stores or platforms, or to enjoy online services. This can also involve the development of mobile application software to support traditional web setups. Meanwhile, behind the scenes, companies also rely on software for tasks like data storage, compiling analytics, or generating products and services. 

As technology has progressed and more and more services move online, it has become increasingly common for companies to require software that is specifically tailored to their needs. This leads to increasing of demand for software development expertise and IT professionals among businesses. However, hiring a highly skilled in-house team to produce or manage software – as anyone who has tried to do it will tell you – is a costly experience.

The cost of paying a team of experts is often beyond the range of many SMBs or start-ups that are just getting off the ground. Many small enterprises start off with only a handful of employees and graduate up as their profits grow. But if you require specialized software to get your products running, this can pose a tricky dilemma. This is when software outsourcing decisions really come into play. 

Software Outsourcing Function

The function of software outsourcing is to hire an off-sight team of experts who can step in and develop software to suit your business needs. This can involve creating unique cloud and storage systems, curating UX/UI design, developing mobile application options, building security processes, and creating algorithms or analytics tools. Outsourcing can also give you more flexibility in terms of hiring and contracts, and can save you time and money. Here are some of the most common software outsourcing models and reasons why these might work for you.

Software Outsourcing: Advantages and Disadvantages

  • Lower Staff Costs for Start-Ups and SMBs

One of the most popular software outsourcing models used by small to medium businesses is the Delivery Team Model. This model allows companies with limited resources to compile a team of off-sight experts to work on a specific project on a temporary software outsourcing contract. It is essentially a question of hiring freelancers on a short-term or project-by-project basis rather than tackling the high cost of hiring in-house developers. 

Delivery teams can often work remotely and independently of each other. This allows you to spend money where you need the most work – for example, if you require a large storage database set up – and save where you can. Rather than hiring a general team of developers to tackle all problems, you can utilize experts’ specific skill set for a brief time. This also helps you build up contacts for the future while getting your product onto the market. 

One thing to be aware of when looking at software outsourcing advantages and disadvantages, however, is the man-management requirements for freelancers. Hiring a collaborative freelance team, rather than an in-house group means you will have to delegate and manage tasks highly effectively. You must communicate clearly with employees who are external to your company, and who do not work to the same schedule as in-house employees. Proper man management will ensure that everyone is aware of the important deadlines, time constraints, and project requirements that your team should work towards. 

  • Allows for Global Collaboration

With the availability of excellent remote communication technology, many of the boundaries on hiring worldwide and on global collaboration have been reduced. Software outsourcing solutions allow you to build a team of employees from overseas, as well as from your local area. This gives you a broader pool of experts to choose from and offers more flexibility in terms of project timing and focus. 

For example, an in-house IT team will have a wide range of responsibilities within your company. They will usually be responsible for managing functional IT problems, such as staff hardware problems, as well as developing new software. This can slow down operations and lead to conflicts of interest in terms of time and energy. 

By following a DTM with a remote workforce, you can choose to hire software developers from all over the world and know that their whole focus is on the designated project. This frees up your time and creates global business opportunities for your company and for employees. One brief thing to be aware of when following this model, however, is that you may have to communicate across different time zones, languages, and cultures. Remember to take this into account when building your team. 

  • Frees Up Time

As a business owner, you simply can’t do everything. Building a supportive team around you is one of the key aspects of business development. This will help ensure that you have time to manage all the strands of your work. 

For some businesses, such as online casinos, software development is a constant part of their day-to-day operations. For example, if you want to create new apps online, like slot games or a virtual mini roulette wheel, you need to constantly update and design UX/UI. With companies like this, which require an in-house software department, the best software for outsourcing can be more specialized projects or general support.

In this scenario, a company may introduce an outsourcing model such as IT Augmentation. This involves hiring additional support staff on a software outsourcing agreement who will offer extra help on specific, company-wide projects. This can involve bringing in temporary in-house staff or keeping remote freelancers as distance staff members. These hires are generally more involved in the daily running of the company than freelancers on a DTM would be. However, they still operate independently and only work on specific projects to support your in-house IT team. 

  • Access to Expertise 

Among the many software outsourcing benefits, a major one is the extended pool of expertise you can draw from when hiring beyond your company. If you want to take on freelancers to help develop software, many software outsourcing companies will help you put together a team of experts in your required field. This allows you to make great flexible hiring decisions and draw from specialist knowledge, rather than approaching things from a general knowledge perspective. 

While some companies prefer full outsourcing to freelancers, others prefer to take on a semi-permanent yet flexible team. Allowing freelancer software developers more involvement and input into business management can help build strong team networks. This can lead to a more positive work environment overall and allow for more instances of collaboration and innovation among the staff. 

Many managers also find this combination of permanent in-house employees and flexible long-term employees creates a more dynamic workspace. In-house software developers responsible for creating unique technology can rely on outsourced teams to test and strengthen their original designs. These types of software outsourcing examples also allow for continued maintenance of technical output and IT resources. This allows for better online security and helps you stay ahead of the curve in terms of what customers and clients want from software or from UI. 


Software outsourcing has a range of benefits and advantages that companies can draw on to maximize their business success. Outsourcing can increase team flexibility, in terms of management, maintenance, and expertise. As it can also save time and money, software outsourcing is definitely something to consider. 

On top of this, software outsourcing companies specialize in putting together teams who are perfectly suited to your development jobs. This can allow you to draw from various pools of expertise and tailor your software team as much as you want to tailor your software. After all, when you approach a software outsourcing company, you are turning yourself over to the experts. If you want more information, or software outsourcing news, it is a good idea to start researching some companies that might be right for you.

How has software outsourcing helped you with your business development? What outsourcing models have you used? Share your tips in the comments!

Author’s Bio: 

Jeffrey Bishop is an entrepreneur, business writer, and expert in man management and team design. He has worked with many companies, helping them to line up the right people with the right projects. He also enjoys hiking and kayaking in his spare time.