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When to Outsource Software Development: A Guide for Companies

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Deciding whether to outsource is critical for companies aiming to stay competitive. While it offers advantages like cost savings, access to specialised skills, and the freedom to focus on core business activities, knowing the right time to make this move is crucial for maximising benefits and minimising risks. This blog post delves into the key indicators that signal it's time to outsource software development, how to choose the right partner, and steps to ensure a successful experience.

Do you want to outsource development? At Deazy, we help businesses deliver their digital roadmaps fast by providing access to experienced tech experts who are right for your project. Why not share your project requirements with us and onboard developers quickly? Get in touch today.


What Is Software Development Outsourcing?

This involves contracting an external organisation to handle specific software-related tasks or entire projects, allowing companies to tap into skills and resources without the need for in-house expertise.


Why Companies Outsource Development 

Businesses outsource for various reasons: cost reduction, access to expert talents, focus on core activities, and flexibility. Let's explore these reasons in more detail.

  • Cost-Efficiency

Retaining an on-site team can be financially draining, particularly in countries with high labour costs. Hiring an external agency from nations with lower operational expenses can yield substantial benefits. Savings aren't just in salaries but also overheads like office space, utilities, and employee benefits.

  • Access to Expert Talents

The ever-evolving nature of technology means that skills are often required for specific projects. Building an in-house team with such niche expertise can be time-consuming and costly. Outsourcing offers immediate access to a global talent pool, enabling companies to find the right skills for their project requirements.

  • Scalability

Business needs are never static; they evolve with market trends and consumer demands. Outsourcing gives you the flexibility to scale operations either up or down without the hassle of hiring or firing staff. This adaptability is invaluable in dynamic markets where quick adjustments can be the difference between success and failure.

  • Leverage the Latest Technology

Outsourcing to a specialised firm allows you to develop software using cutting-edge technology without the hassle of staying updated in a fast-paced tech landscape. These firms are equipped with the latest tools and methodologies, ensuring your project benefits from the most advanced solutions. This not only elevates the quality of your software but also gives you a competitive edge. 

  • Focus on Core Activities

Engaging an external team allows companies to redirect their focus towards business activities. Whether marketing, customer relations, or product innovation, firms can concentrate on what they do best, leading to improved productivity and accelerated growth.


Signs Indicating It's Time to Outsource Software Development

Companies often grapple with the decision to hire an external squad because they are caught between the allure of cost savings and the fear of losing control over a critical business function. Making the right choice is crucial, as it can significantly impact a firm's agility, financial health, and competitive edge. 

1. Lack of In-House Expertise

The absence of specialised on-site talents can pose a significant challenge for businesses. This is because recruiting skilled developers for specific technologies is often lengthy and costly, from advertising roles to interviewing and training new hires. Even after this investment, there's no guarantee of long-term retention, given the competitive job market in the tech industry.

Outsourcing stands out as a compelling solution because it offers immediate access to a global talent pool, allowing you to hire devs on a project-by-project basis. This not only accelerates project timelines but also ensures a higher standard of work.

2. When a Project Is Too Complex

If you have an in-house team and the task at hand is too complex for them to handle, outsourcing provides a way out. Perhaps you are delving into a new tech field like machine learning or artificial intelligence; your existing team might not be capable of handling such a project. 

So, instead of having to train your developers to handle such tasks, which might take some time, you can solve this problem by engaging professionals who are experts in this tech field. Their prior experience with similar challenges ensures your project remains on course. Furthermore, these teams are usually up-to-date with the newest trends, providing your project with the most current and effective solutions.

3. When You Have Tight Deadlines to Meet

One of the most pressing challenges firms face is meeting tight deadlines, especially when in-house resources are already stretched thin. Failing to deliver a project on time can have a ripple effect, impacting client relationships, revenue streams, and even reputation. In such high-pressure scenarios, outsourcing is a highly effective solution.

The external team often have dedicated squads that can be mobilised quickly to work on your project. These experts are well-versed in agile methodologies and tools, enabling them to integrate seamlessly into your existing workflow and accelerate the development process. The time-zone difference can also be an advantage; while your team rests, the external team can continue working, essentially making it a round-the-clock operation.

Moreover, an experienced partner will have a proven track record of delivering projects within stipulated time frames. They bring not just manpower but also refined processes and tools that enhance efficiency. Their experience can help identify and mitigate potential bottlenecks that could delay the project, ensuring timely delivery.

4. Cost Overruns

One of the most pressing concerns that can prompt a company to consider contracting out development to an external agency is the issue of cost overruns. When the cost of maintaining internal staff starts spiralling out of control, it significantly burdens the company's budget and overall financial health. This can result from various factors such as unexpected complexities, scope creep, or the need for specialised skills that demand higher salaries.

Outsourcing offers a practical solution to this dilemma by shifting work to locations with considerably lower operational costs. This is not just about cheaper labour but also the reduced expenses associated with office space, utilities, and employee benefits. 

Additionally, the fixed-cost model that many firms offer provides greater financial predictability. You pay for a defined scope of work, making it easier to budget and control costs. This financial transparency allows companies to allocate resources more effectively and focus on other critical business areas.

5. When You Can't Focus on the Main Business Activities 

When development is not your organisation's core competency, it can become a resource-intensive distraction that diverts focus from your primary objectives. For instance, consider an e-commerce business whose main activities should ideally revolve around product sourcing, sales, and customer service. If this business spends excessive time managing an on-site web development team, it risks diluting its focus and compromising on its main revenue-generating activities.

Hiring an external development agency in such scenarios can be a strategic move. By delegating the technical aspects to experts in the field, the firm can free up internal resources and direct them towards activities central to its business model. This optimises operational efficiency and allows the company to invest more time and effort in enhancing customer experience, marketing strategies, and other core functions directly impacting profitability and growth.  

6. You Have Quality Concerns

Quality is a cornerstone of any successful development project. However, if your in-house team consistently falls short of quality benchmarks or grapples with recurring bugs, it's a glaring sign that you may need external help. In such situations, an experienced partner can be invaluable.

Outsourcing firms often have rigorous quality assurance (QA) protocols in place, backed by a team of QA experts adept at identifying and rectifying issues that an on-site team may have overlooked. These companies utilise advanced testing methodologies and tools to ensure the software is secure and performs optimally across various platforms and devices. 

Also, a seasoned agency brings a wealth of experience working on different projects across various industries. This enables them to offer insights and solutions that can greatly increase the quality of your project. They can introduce best practices, from code reviews to automated testing, that can drastically reduce the incidence of bugs and improve the software's overall reliability and user experience.


How to Outsource Software Development 

Embarking on the outsourcing journey requires meticulous planning and execution. Below are the essential steps to ensure a successful experience.

1. Define Scope and Objectives

The first and foremost step in the process is to communicate what you aim to achieve with the project and what specific tasks you expect the provider to handle. This could range from initial design and development to ongoing maintenance and support. The more specific you are, the less room for misunderstandings later on.

In addition to tasks, setting milestones that serve as checkpoints throughout is crucial. This helps in tracking progress and ensures that the project stays on course. Milestones can be tied to specific deliverables or phases of the project, providing both parties with clear goals to aim for. You should clearly list the deliverables you expect at each milestone's end. Whether it's a piece of functioning software, documentation, or any other tangible output, specifying this upfront helps in setting expectations and provides criteria for evaluating performance.

2. Shortlist Potential Partners

After establishing a clear scope and set of objectives for your project, the focus shifts to identifying a suitable agency like Deazy. This is a critical step, as the success of your project hinges on the capabilities and reliability of the firm you choose. One of the most reliable ways to find trustworthy partners is through recommendations from industry peers or colleagues who have had positive experiences with outsourcing. These firsthand accounts can provide invaluable insights into a firm's capabilities, work ethic, and reliability. 

Aside from that, online reviews are a goldmine of information. Websites like Clutch or Glassdoor offer reviews and ratings for software development firms. These reviews can give you a sense of the company's strengths and weaknesses and ability to meet deadlines and adhere to quality standards. LinkedIn and other social networking sites can also be useful in your search. You can look for firms endorsed for specific skills or check if they are connected to your professional contacts. This can add an extra layer of verification and trust.

3. Evaluate Potential Partners

Choosing the right external team is a critical decision affecting your project. A thorough evaluation ensures your chosen firm aligns with your project's needs and objectives. Here are the key parameters to consider:

  •  Technical Expertise

The technical capabilities of your potential partners are paramount. Assess their proficiency in the specific programming languages, frameworks, and technologies that your project requires. Additionally, consider any industry-specific expertise that may be necessary. A firm with the right technical skills can greatly affect the quality and success of your project.

  •  Communication

Clear dialogue is frequently underestimated but is essential for the smooth execution of any project. Evaluate the firm's communication skills, including proficiency in your preferred language, responsiveness, and clarity in conveying complex technical concepts. Ineffective interaction can lead to misunderstandings, delays, and failure.

  •  Past Projects and Client Testimonials

A firm's track record is a reliable indicator of its reliability and quality of work. Examine their portfolio to assess the range and complexity of projects they have handled. This will give you an idea of their experience and capabilities. Additionally, seek client testimonials or references to gauge reputation. Positive comments from previous clients can provide valuable insights into the firm's reliability, quality of work, and ability to meet deadlines.

  •  Pricing Models

Price is a significant factor in any outsourcing decision. Different firms offer various pricing models, such as fixed-price, time-and-material, or hybrid. Consider which model best aligns with your project's budget. A fixed-price model may be suitable for well-defined projects, while a time-and-material model offers more flexibility for projects with evolving scopes. Be cautious of firms offering significantly lower prices, as this could indicate compromised quality or hidden costs.

4. Initiate Pilot Project

Before fully committing, it's advisable to initiate a pilot project. This smaller, time-bound task allows you to gauge the capabilities of the provider in a real-world scenario. It provides a risk-free environment to assess the quality of work, adherence to deadlines, and team communication skills. The success or failure of the pilot project will be a strong indicator of whether the firm is the right fit for the larger task at hand.

5. Sign a Contract and NDA 

After thoroughly evaluating potential partners and selecting the one that best aligns with your project's needs, the final step is to formalise the agreement through legal documents. This typically involves signing a contract and a Non-Disclosure Agreement (NDA).

  • Contract: This legally binding document outlines the partnership's terms and conditions. It should specify the scope of work, deliverables, timelines, and payment terms. Additionally, it may include clauses related to quality assurance, compliance with industry standards, and penalties for delays or subpar work. Both parties should review the contract carefully, and it's advisable to consult legal experts to ensure that all terms are clear and fair.
  • NDA: Given the sensitive nature of development projects, which often involve sharing confidential information, an NDA is usually a prerequisite. The NDA ensures that the partner will not disclose or misuse any proprietary information related to the project or your company. 


Outsource Software Development to Deazy

At Deazy, we simplify your software outsourcing process by meticulously matching you with nearshore developers. These professionals not only have the expertise you require, but they also grasp the specific needs of your business. Simply, our international pool of thoroughly vetted development groups allows us to supercharge your project using state-of-the-art technologies and methodologies. We excel in project outsourcing and augmenting your existing staff, guaranteeing a smooth transition and effective software output.

We also provide guaranteed project completion. By formalising a direct agreement with our clients, we assume total accountability for the successful delivery of the project. Should obstacles emerge, we adjust the team composition, allowing you to replace developers at no additional cost if they don't meet your criteria. Plus, you can adjust your team size and modify commitments without additional financial burden.

Moreover, starting your dream development team with us is uncomplicated:

  1. Day 1: Arrange an initial consultation to outline your project specifications.
  2. Day 3: Commence the evaluation of developers, hand-picked to align with your project.
  3. Day 7: Solidify your project requirements and integrate new team members.

We are more than a service provider; we are a collaborative ally that equips you to traverse the complex terrain of software development effortlessly and confidently. Partner with Deazy, and let's create something exceptional together.



Outsourcing software development is a strategic move that offers many benefits, from cost-efficiency and access to specialised skills to scalability and focus on core business activities. However, the success of this venture hinges on meticulous planning and the selection of a reliable partner. Each step is crucial, from defining the project's scope and objectives to evaluating potential partners on technical expertise, communication skills, past performance, and pricing models. Once satisfied, formalising the agreement through a well-crafted contract and NDA safeguards both parties.

If you're considering outsourcing, Deazy is a trustworthy partner, delivering high-quality solutions. Our expertise, transparent pricing models, and commitment to client satisfaction make us an ideal choice for your software development needs. Get in touch with our team today.


Frequently Asked Questions

When should a company decide to outsource?

A company should consider outsourcing when in-house resources are insufficient, deadlines are tight, or specialised skills are needed for project success.

Why do companies outsource software development?

They do that to cut costs, access specialised talent, scale operations flexibly, and focus on core business activities.

What are the 4 factors to consider before outsourcing?

Consider potential partners' technical expertise, communication skills, past performance, and pricing models.