Software Development Outsourcing - The Benefits and Potential Pitfalls

Software Development Outsourcing - The Benefits and Potential Pitfalls

In the ever-evolving software world, a shift takes place when new technology comes along and changes the landscape, leaving software that was in favour quickly out of favour with a whole new idea taking its place.

Another shift in the software development realm in the recent past is outsourcing. Now could be time for your business to consider offshore outsourcing also known as 'offshoring' to push your business model forward, faster.

As defined by Gartner ‘Outsourcing can enable enterprises to reduce costs, accelerate time to market, and take advantage of external expertise, assets and/or intellectual property’.

Here we list some of the attractions for businesses as to why software outsourcing is one of the recent software development trends and subsequently some of the pitfalls to avoid during the process.


Today's businesses are in a unique position to be able to outsource work to partners around the world and is an increasing trend in most industries and comes with plenty of advantages.

Why Consider Offshore Staff Augmentation?

Reason: It Provides Reduced Business Development Risk

Many businesses find it difficult to manage in-house software development for various reasons.

The reality is that some lack the expertise and others the focus due to the nature of their business to be able to implement it effectively. Directors of a firm can look at the overall picture and conclude that taking up the mantle of in-house software development will take away the focus from their core business model while adding the possibility of ultimate failure into the equation. Outsourcing will effectively reduce risk and project delivery time can be controlled.

It Lowers Development Costs

If budgets are tight, offshoring can help a business take more control of what's ahead of them and can be a money saver at the same time.

Many software development firms internationally position themselves in countries and cities where the cost of doing business is lower to gain offshoring business.

It Accesses Talent that isn't in your Town or City

Cost incentives should not purely drive outsourcing. Outsourcing can tap into software talent that happens not to be anywhere near your location. This is especially advantageous to businesses that are working in a niche area; you require a different skill-set to the average CV that finds its way to your desks.


Some businesses are not convinced by offshoring and may have heard some bad luck stories along the way.

Most of the time if projects have not come to the realisation the way they were intended usually comes down to a lack of thorough initial evaluation, there's no need to jump straight in and hope for the best.

So the initial step for success in offshoring is the evaluation process to be conducted by both sides to find the right solution and implementation strategy.

Increasing Project Success Rates

Before hiring and outsourcing take time to evaluate the profile of the business that you are looking at. There are plenty of checks you can run to see their project success rates.

A reliable software development firm should have numerous completed projects of which they are open about and details or referrals available to you.

Over the years it's surprising how many businesses don't do any initial research and are left frustrated when projects don't get completed on time or to their spec.

Matching Technical Requirements

Finding a software development company that has the skill-set you require is essential. This can be often overlooked once you have found a company that ticked all the right boxes in the previous paragraph above.

It's vital if you are working in a niche area to know that the firm has specialists that are competent in the same field for you to find a match with what they specialise in and your requirements.

If you end up with a company that has little to no experience with your spec, you can expect prolonged completion dates and many headaches along the way.


Once you have gone through your evaluation process and decided to go ahead and outsource your project, the job is far from over, in fact, it has just begun.

There are many classic mistakes that companies can make in assuming that the project will just be delivered on time precisely as you mapped out. Overlooking workflow can lead to huge problems down the line.

Lack of Communication

Software Development relies heavily on collaboration and good levels of communication between both parties.

There are many instant communication tools available on the market in 2018 that enable both teams to share instant information without the need for emails.

If you outsource and then go into 'hands-off' mode then prepare yourself to fail, you'll end up with an inferior final product. Issues that could lead the offshoring team to stray down the wrong path can be addressed instantly and keep your project on track.

Time Zones

Be sure to consider the time zone effect that outsourcing has. You must have a designated team ready to work alongside the developers on their working hours as well as them being somewhat flexible to you too; this is something that needs to be covered before any agreement should be met.

Sporadically Test the Development of the Software

Testing throughout development is essential to know that the offshoring team is not only working on the project regularly but that it is on track.

There are various ways to conduct on-going testing, both automated and isolated. Be sure to run live product testing from time-to-time so both sides can see precisely where the project is at and what's working and what's not.

Here is where you can detect any defects or realise some shortcomings way before you go to market with your product.


Geopolitical Risks of Hiring Offshore Software Developers

Astute corporations have various forms of their business situated around the globe but have planning in place to adjust for geopolitical risks. Insurance, for example, is in place as a contingency against adverse external events disrupting their work.

Displacement of Your Local Software Developers

For a brand that decides to outsource must also consider the local impact that offshoring will have on the community. Closing down your research and development arm can cause job losses when you outsource to another country or continent.

Be a responsible business, have plans in place for workers compensation and also look at training programs to integrate them into a different part of your business.


There are many advantages to outsourcing for businesses and equally as many pitfalls if you don't approach it correctly. Approaching it while considering some of the tips above will unlock the benefits, allowing you to focus on growing other aspects of your business.

Everything starts with choosing the right developer then you being as proactive as possible throughout the process. If you approach it holistically, you will mitigate any potential adverse effects outsourcing could have and reap the benefits.

Posted by James Row

James Row
James Row is a passionate blogger and professional software developer who started his career in website development Melbourne, has a love for informative writing, and looks to keep you up to date with the latest information about the industry.

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