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7 Reasons Why Companies Outsource Software Development

James Sullivan
James Sullivan
August 3, 2023
7 Reasons Why Companies Outsource Software Development


In today's digital business landscape, companies are navigating through a sea of transformation. They are seeking ways to develop superior-quality software products while minimizing costs and increasing productivity.

Outsourcing software development is an effective approach that has garnered significant momentum in this endeavor. Understanding the reasons behind this growing trend can provide valuable insights for your strategic decision-making.

In this article guide, we'll explore seven compelling reasons why businesses are turning to outsource their software development needs.

1. Cost Savings

Significant Cost Reductions through Outsourcing

One of the most substantial benefits of outsourcing software development is the opportunity to reduce costs compared to in-house development significantly. Maintaining an in-house team involves more than just salaries—it includes costs for recruitment, training, benefits, and the overhead associated with providing the physical resources needed for development work.

When outsourcing, these costs are dramatically reduced or even eliminated. Companies only pay for the services they need when they need them. There are no ongoing costs for idle time or maintaining infrastructure. This financial efficiency can translate into substantial savings, making outsourcing highly cost-effective.

Factors that Contribute to Cost Savings

Several factors come into play when it comes to the cost-saving aspect of outsourcing software development:

  1. Labor Costs: There's a notable difference in wages across different countries due to varying living standards and wage expectations. By outsourcing to countries where labor costs are relatively lower, companies can achieve the same level of quality at a fraction of the price.
  2. Operational Costs: Expenses like office rent, utilities, hardware, and software can add up. These costs can be eliminated by outsourcing.
  3. Recruitment and Training Costs: Hiring and training new employees can be expensive and time-consuming. Outsourcing bypasses these costs, as the service provider is responsible for these expenses.
  4. Cost of Inefficiency: In-house teams might take longer to complete tasks due to a lack of expertise or experience in specific areas. Outsourcing to experts can do the job more efficiently, saving time and money.

A Comparative Illustration

Consider a scenario involving a U.S. company planning to develop a new software product. Hiring, training, and retaining an in-house team, plus equipment, software licenses, and office space costs, can quickly spiral out of control.

Outsourcing the software project to an experienced software development company can deliver the same product at a fraction of the cost, contributing to substantial cost savings.

2. Access to Specialized Expertise

The Global Talent Pool

One of the compelling reasons why businesses outsource software development is the opportunity to access a global pool of highly skilled professionals. This diversity brings many benefits, including a wide range of expertise, various perspectives, and innovative ideas.

When companies decide to outsource, they are no longer limited to the local talent pool. They can extend their reach globally and find the best talent that fits their project requirements, regardless of location. 

This broad reach is particularly advantageous in specialized fields like software development, where specific skill sets, experiences, or technical knowledge may be needed.

Software development outsourcing providers are often experts in their field with extensive experience working with different clients, projects, and technologies. By tapping into their expertise, businesses can ensure they are getting top-notch services for their software development project.

Benefits of Accessing Specialized Expertise

  1. High Quality: With access to a global talent pool, companies can find experts with the specific skills and experiences needed for their projects. This expertise contributes to developing high-quality software that meets the business's requirements and user expectations.
  2. Innovation: Diverse talent brings diverse perspectives. Companies can benefit from their unique insights and creative ideas by working with professional software developers from different backgrounds and experiences, leading to more innovative solutions.
  3. Efficiency: Specialized experts are proficient in their field. They can complete tasks more efficiently, reducing the development time and contributing to faster time-to-market.
  4. Learning Opportunity: Working with specialized experts allows the in-house team to learn and improve their skills. It can also expose them to the field's best practices and new technologies.
  5. Reduced Training Costs: When businesses hire specialized experts, they can save on training costs. The outsourced professionals are already equipped with the necessary skills and knowledge to complete the task, eliminating the need for extensive training.

Software development outsourcing offers businesses access to a global talent pool of specialized experts. This diversity and expertise bring numerous benefits, including high-quality output, innovative solutions, efficiency, learning opportunities, and cost savings.

By leveraging these benefits, businesses can enhance their software quality, speed up the development process, and stay competitive.

3. Faster Time-to-Market

The Race Against Time

Being the first to finish in the high-speed digital race can mean the difference between success and failure. Companies that swiftly bring their products to market stand a greater chance of outperforming their competition. 

You can potentially accelerate your time-to-market by outsourcing your software development process to a dedicated software development team like One Seven, a well-regarded digital product studio.

The Efficiency of Established Processes

Software development outsourcing companies have tried-and-tested processes in place that can expedite the product development cycle. They are equipped to handle the end-to-end software development lifecycle, from requirements gathering and design to coding, testing, and deployment. 

This development process efficiency can result in quicker product launches, boosting your competitive edge and potential returns on investment.

4. Scalability and Flexibility

Meeting Business Needs

Scalability and flexibility are key elements in a dynamic business environment. Outsourcing offers the benefit of easily scaling operations up or down based on project requirements. It allows companies to respond to changing project needs without worrying about workforce capacity constraints.

Market Expansion and Technology Exploration

The flexibility offered by outsourcing extends beyond workforce management. It allows for easy exploration of new markets or technologies. Partnering with an MVP Development Services provider like OneSeven can help businesses develop a minimum viable product (MVP) for a new market or technology, allowing for feasibility testing before committing significant resources.

5. Focus on Core Competencies

Unburdening Your Key Resources

Outsourcing software development tasks allows businesses to free their internal resources from non-core functions. By doing so, companies can focus on what they do best - their core competencies. This enables the internal teams to focus on strategic initiatives and core business functions, which can directly impact revenue and customer satisfaction.

Driving Business Growth

Focusing on core competencies can lead to improved business growth. When you unburden your teams from tasks that are out of their realm, they can invest their energies into areas where they excel. This can lead to increased productivity, innovation, and better products and services that boost your bottom line.

6. Risk Mitigation

Software development comes with its own set of risks, including project delays, quality issues, and cost overruns. Outsourcing to a reliable staff augmentation firm can help mitigate these risks. Such firms possess specialized expertise and established processes to manage these risks effectively.

Understanding Risks in Software Development

Software development carries various risks, including project delays, quality issues, and cost overruns. These risks can significantly affect the business, affecting the bottom line, customer satisfaction, and market reputation. Therefore, mitigating these risks becomes a crucial aspect of software development projects.

How Outsourcing Mitigates Risks

Outsourcing to a competent software development company can effectively address these risks. These companies bring their expertise and establish processes and protocols to mitigate potential risks.

  1. Project Delays: A seasoned outsourcing company is equipped with tried-and-tested project management methodologies that ensure the project stays on track. Their experience handling multiple projects allows them to foresee potential roadblocks and plan contingencies to prevent delays.
  2. Quality Issues: Software development companies invest significantly in quality assurance processes and systems to ensure the final product meets the set expectations and standards. By utilizing their services, businesses can assure high-quality output, reducing the risk of post-launch glitches that could damage the brand's reputation and user experience.
  3. Cost Overruns: Outsourcing companies have an established cost estimation and budgeting framework, providing businesses with a clear, detailed outline of the project costs beforehand. This transparency and accuracy in cost estimation help avoid unexpected expenses, keeping the project within the allocated budget.

Risk Mitigation Through Expertise and Experience

Software development outsourcing companies have experience dealing with various projects, industries, and technologies. This extensive experience and technical expertise enable them to identify potential risks early on and take preventive measures. It also allows them to respond promptly and effectively if issues arise, minimizing any negative impact.

Outsourcing software development to a reliable partner can be crucial in risk mitigation. By leveraging their specialized expertise and established processes, businesses can assure timely delivery, high-quality output, and cost-efficient project management, effectively mitigating the inherent risks associated with software development.

7. Improved Competitive Advantage

Enhancing Competitive Advantage through Outsourcing

Software outsourcing can be a strategic move to improve a company's competitive advantage in various ways. The global marketplace is increasingly competitive, and businesses are constantly seeking ways to differentiate themselves, improve their offerings, and increase their speed to market.

Outsourcing software development to a reliable partner can enable businesses to deliver high-quality, innovative products at a faster rate. This helps meet customer needs more efficiently and allows companies to stay ahead, outperform competitors, and respond promptly to market changes.

Outsourcing as a Catalyst for Innovation

Software outsourcing gives companies access to a global talent pool, offering diverse expertise and innovative perspectives that might only be available in various ways. This diversity can lead to more creative, cutting-edge solutions, contributing to developing superior products that set the company apart in the market.

Software outsourcing can free up internal resources, enabling the company to focus more on strategic, high-value tasks such as business development, customer relationship management, and innovation. This strategic focus can further enhance the company's competitiveness.

Cost-efficiency Driving Competitive Advantage

From a financial perspective, the cost savings realized from outsourcing can be invested back into the business to fuel growth. This might include investing in marketing to increase brand awareness, research and development for product innovation, or training programs to enhance employee skills. Such strategic allocation of resources can boost the company's market position and competitive edge.

Leveraging Technological Advancements

Outsourced software development also enables businesses to leverage the latest technology trends without investing heavily in training or equipment. Expert software outsourcing development agencies are typically up-to-date with the latest technologies, tools, and industry standards.

By outsourcing, companies can ensure they are at the forefront of technological advancements, further strengthening their competitive advantage.

Outsourcing software development can significantly enhance a company's competitive advantage by fostering innovation, improving cost-efficiency, allowing focus on core competencies, and facilitating access to the latest technologies. 

As Companies outsource software development to stay ahead in today's digital age, outsourcing can be a powerful strategy to stay competitive and achieve business growth.


Outsourcing software development presents a strategic solution for businesses looking to save costs, access global expertise, speed up time-to-market, and maintain flexibility in their operations. It can also help organizations focus on their core competencies, reduce risks, and gain a competitive advantage. 

In this ever-evolving digital world, making such strategic choices can mean the difference between being a market leader and a follower.

When considering outsourcing your software development needs, look no further than OneSeven, a leading startup development apps studio. With our range of software development services, we can help you create innovative products that set you apart from your competition. 

If you want to outsource software development projects, reach out to us today to learn more about our MVP development services and discover how we can help you achieve your business goals.

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