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Pros and Cons of Outsourced Software Development: Which One is Outweigh?

Posted 10/10/22

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Several questions come to mind: Are there any cons to outsourcing software development? How about the pros? What if the cons outweigh the pros? Is it still worth outsourcing your software development? And how to avoid the risks while outsourcing? Is there any solution to this? Then you should find the answers below.

Pros and Cons of Outsourced Software Development

According to ProCoders, Ukraine is a country that follows modern technological trends. They have been actively outsourcing in building their business since the 90s. So far, Ukraine is not only a competitive competitor in the market but also on the list of leaders.

Ukraine is undoubtedly well aware of the advantages of outsourcing, and they have decided to use it. Still, in making that decision, they certainly need to consider the disadvantages that can result from using outsourcing software development.

Pros of Outsourcing

Outsourcing software development

Outsourced software development is a serious step that not only global companies can take but startups run by small teams. However, despite the risks, companies consider outsourcing their best decision, with 78% of businesses having a positive view of outsourcing. Here are the main reasons why you should outsource your software development:

Reduce Software Development Costs

As we know, the pace of technological development is very rapid, so the software development industry is constantly changing. Therefore, training and hiring a software developer for a project can be an unnecessary expense. However, it is different if a company already developing the project uses outsourcing software development to cut training costs.

Besides that, research by Deloitte found almost 59% of companies outsource to reduce their costs because the costs that were initially going to be used to carry out the employee recruitment process and training can be channeled to other business areas.

Read Also: App Development Cost: Is It Cheaper to Outsource or In-House?

Gain Access to World-Class Capabilities and Markets

Outsourcing makes your business connects with the world’s best specialists. It means no matter the distance of your business. You can still get the best freelancers at any end of the world, making it easier for your business to enter the global market.

For example, IKEA, the Swedish furniture giant, took the initiative to master Home Smart. However, as a furniture company, IKEA needs more capabilities to make it happen. They need access to the latest technology and human resources to realize this vision.

IKEA constantly strives to outsource to the right partners, which gives them direct access to the most up-to-date technology team without even needing to be in the same room. In addition, by outsourcing, IKEA had talent in human resources and markets worldwide to explore.

Save Your Time, Make More Productive

Hiring software developer involves several stages. According to Glassdoor, the average job interview process takes about 23 days.

The first step that needs to be taken in posting job vacancies is reducing the list of applicants to be the best, which is followed by an interview process. It takes time to arrange an appropriate meeting schedule between candidates in the interview process.

Not to mention that every selected developer must be ensured to have various skills suitable for various projects that will be carried out in the future because the worker is a full-time worker. So, naturally, this makes the hiring process more complicated and time-consuming.

In addition, the training that must be provided will also require a lot of time and cost. However, when outsourcing development to external teams will make it simpler. You just need to focus on choosing a specialist with the right skills for the project. The time, cost, and energy that was initially for the recruitment process can be diverted to other things that quickly support the project’s completion.

Increase the Flexibility of Scaling Your Project

Businesses that outsource software development have several advantages, including avoiding recruiting new employees, training, and integrating new employees into the company culture. With outsourcing, they can easily find professionals who fit their needs. So this makes it faster, easier, and more cost-effective.

Another benefit is that the need for minor or extra staffing can be measured as needed; the project becomes more flexible without the need for labour that is considered less feasible.

Project Risks Become More Minimized

For startup companies releasing a new product is very risky. Even though market research has shown a high probability of success, many other factors influence it. Such as a brand that needs to be better known, has questionable credibility, or does not have a positioning in the market.

Hiring a full-time developer is also a big decision, especially for startups, from recruitment, training, and paying months of overhead for a product that ultimately fails. This leads to destruction, and the business cannot recover in the worst case.

Choosing outsourcing software development can work well

For example, you can develop products with a team with a high-quality project management system. The team has established effective workflows and has proven to create applications that generate solid ROI.

Knowing the pros of outsourced software development will not be enough to convince a business person to implement them because a businessman not only sees an opportunity but also considers the risks that will be obtained.

Read Also: Does Outsourcing Software Development Work for a Startup Company?

Cons of Outsourcing and its solutions

This part will describe some of the cons of outsourcing software development. Still, you don’t need to worry because, in each cons, there will be several solutions that you can take to answer the question that outsourcing software development is worth using as well as a way to avoid the risks that can arise.

Process and Management Less Controlled

When handing over management control and business processes of your company to another outsourcing company will certainly cause discomfort, you must entrust your business to someone else. However, some critics argue that the external team cannot match the loyalty of the internal team.

Here are some solutions for these cons :

  • Transparency is required between you and the outsourcing company regarding which elements the control is complete on you. The outsourcing company has no right to work outside your control on those elements.
  • Focusing on results will make the outsourcing company work according to its wishes, but the results achieved must be in accordance with your wishes as a business owner.
  • Communicate regularly, either with reports or others, so you can monitor the performance of the outsourcing company.

Communication and Work Culture Problems

Establishing good communication has always been a significant challenge in socializing both in a business environment and in everyday life. Differences in culture, language, and nature trigger communication cracks.

In doing business with outsourcing, communication and work culture can be exacerbated by the dynamics of the client or the outsourcing company itself, where the outsourcing vendor staff feels they have to agree with the client and cannot oppose the client’s wishes for the results to be achieved by the vendor staff. Ultimately, it can lead to disappointment when results cannot be realized.

To manage these cons, below are some solutions you may take :

  • Ensure that every outsourcing team you will use can use the same language in your company.
  • Make a minimum standard contract outsourcing team that fits your company culture.
  • Ensure that all members from both the internal and external teams have the same understanding at every meeting.
  • When working with outsourced teams across different time zones, it is necessary to agree beforehand on the agreement on time zone differences and find a clear point.

Read Also: Why Outsourcing Is Better Than In-House Development

The Cost is Higher Than Expected

Companies often use outsourcing services to cut costs, utilizing foreign workers who are considered cheaper than domestic workers. However, what if the costs involved are higher than expected? Then you need to read the solutions below:

  • Ensure clearly related to the quality standards of the outsourcing team. Even though they can work in different places, there is nothing wrong at the beginning of the collaboration with visiting the outsourcing team directly to ensure the work system, both the cost of overtime.
  • Pay attention to the outsourcing company’s tactics, whether they will add new people, which will potentially increase costs, or swap experienced team members for new ones who are less experienced to allow time extensions. All must be noted and made clear.

Experience with Remote Teams is a Lack

Before COVID-19 hit the world, many business people chose to work remotely with their employees. However, when remote working is done with an external team, it often raises concerns.

For example, just trying to use outsourced software development and the vendor team cannot be observed directly because the long distance is also a consideration for a business person to outsource. Not to mention misunderstandings in technical work are very likely to occur if working remotely.

Some of the solutions below hopefully can ward off your worries if you don’t have experience working remotely with external teams, namely:

  • Make a written statement about the definition of project success to avoid misunderstandings between teams.
  • Prepare guidelines for working remotely to make work more conducive and effective.
  • Assign someone as a source of information for both parties so that the messages obtained are aligned.

Conclusion

inhouse or outsource development
As a business person, knowing the pros and cons of outsourced software development is necessary to consider which one is outweighed. According to the article above, outsourcing your software development has many benefits. Although there are several disadvantages, we have found a solution for them.

So what are you waiting for? you may want to know how and where to find good quality outsourcing software development. You can find the answers in our following discussion.

More Resources :

  1. 5 Easy Peasy Steps to Outsource Your Software Development
  2. Offshore Software Development: Learn More About Indonesian Company
  3. Best Practice to Hire Remote Top Developers 2022
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