If you’re considering developing a new piece of software, the chances are you’re going to need to outsource its development. But, what exactly does the process of outsourcing software development involve? What are the key pieces of information you need to know? In this in-depth guide I provide you with the answers to these questions and more.
What is software development outsourcing?
Let’s kick things off with a definition. What does ‘software development outsourcing’ actually mean?
In the simplest terms, it refers to the development of software being undertaken by a third party.
Put yourself in the picture; you run a business, and you need a new piece of software to complete an essential task, function or process within your business. However, you lack the expertise internally to develop this software.
Thus, you choose to outsource the development of the software to a company that specialises in the development of software.
This allows you to concentrate on your core business activities whilst a set of specialists develop the software on your behalf.
That is the essence of software development outsourcing.
What does the outsourcing of software development involve?
It follows then that the process of outsourcing the development of your software involves the third party specialists executing the entire development process (in most cases), from application design and coding, to testing and maintenance.
And, when we talk about ‘software’ we’re referring to the full gamut of software. Everything from operating systems to application software can be – and is – outsourced to specialist development agencies (like ourselves here at GoodCore).
These specialist development outsource companies will typically employ a team of dedicated specialists spanning the complete development lifecycle. This can include:
- Full-stack developers.
- Front-end developers.
- Back-end developers.
- Mobile app developers.
- Data scientists.
Aside from developers, third party development firms will also normally employ business analysts, project managers, software architects, UI/UX designers, QA engineers, and DevOps engineers.
In short – they employ individuals with the requisite skills, expertise and experience required to complete an entire software development project from start to finish.
Third party development companies will also employ a form of software development methodology to ensure that their projects are completed in a manner which is efficient, within budget and timely.
Examples of methodologies employed by third party developers include:
- Code and fix.
- Agile development.
- Waterfall development.
- Rapid Application Development (RAD).
- Spiral development.
- Shape Up.
Third party developers will also employ multiple software development practices – such as DevOps, continuous integration (CI), continuous delivery (CD), and stakeholder engagement.
The very best third party development agencies will also utilise a range of high-level programming languages to create software for their clients. Examples of such high-level programming languages include:
- JavaScript (JS).
- Java.
- Python.
- SQL (Structure Query Language).
- C.
- C++.
- TypeScript.
- PHP.
Full versus piecemeal development outsourcing
It’s important to note that third party development firms don’t necessarily have to complete software projects in their entirety. In some cases, they may be used to complete only a specific part of the development process.
This can be viewed as ‘full vs piecemeal’ outsourcing.
A business may decide that their internal team is capable of completing parts of a project – with more complex or onerous parts of the project outsourced to a third party.
Or, a business may decide that they lack the requisite experience entirely and decide to outsource the complete dev project.
There are also instances where third party developers are chosen to step in and take over a development project which is still in progress – this is known as ‘project take over and rescue’.
Want to find out more about the software development process? Then read GoodCore’s complete guide to software development now.
What exactly is outsourcing?
If you’ve even a passing familiarity with the world of business, then you’ll have undoubtedly encountered the word ‘outsourcing’.
But, what exactly does it mean? What does it involve? And, what are its roots?
We’ll explore the answers to these questions in this next section.
Outsourcing has been defined as ‘a business practice in which companies use external providers to carry out business processes that would otherwise be handled internally’1.
Outsourcing – as a business practice – first came to widespread usage in the early 1990s, although the concept had first emerged in the early 1980s when it was initially known as outside resourcing.
But, why did it emerge in the first place? And, what came before it?
A brief history of outsourcing
The dawn of the twentieth century saw the emergence of the first conglomerates (perhaps best exemplified by the Ford Motor Company).
These conglomerates placed a particular emphasis upon control, rationalisation and the elimination of uncertainty. Thus, they pursued vertical and horizontal integration – bringing as much as possible in-house. Hence, the etymology of the term ‘conglomerate’ which is derived from the Latin ‘con’ (together) and ‘glomus’ (ball) – quite literally ‘ball together’.
As McCarthy summarised Ford’s development as a conglomerate:
‘The Ford Motor Company altered the boundary of its organisation by acquiring and integrating businesses that were parts of its supply chain. These included mining companies, shipping companies, railway companies and rubber plantations.
This strategy, not only provided ownership and enhanced control of the supply chain and market, but as reported by Lonsdale and Cox (2000) it offered organisations the potential for economies of scale and the opportunity to exercise greater market power’2.
This strategy became widely adopted, with conglomerates arising across all industries throughout the middle period of the twentieth century.
However, by the early 1990s an alternative strategy emerged – that of ‘outsourcing’.
Again, to reference McCarthy, although conglomeration had allowed companies to convert an idea or need into a marketable product, ‘The conglomeration and vertical integration activities of the previous 60 years had helped manufacturing organisations achieve this change in focus, but at the expense of burdening the organisation with excessive and inefficient processes and services, and uncompetitive transaction costs’.
In effect, trying to do everything in-house had led to businesses becoming burdened with unnecessary costs and uncompetitive prices.
Businesses were looking for a new way of doing things.
The first recognisable outsourcing business model was developed by Morton H. Meyerson of Electronic Data Systems in 1967 (in fact, this achievement was formally recognised by the International Association of Outsourcing Professionals in 2013).
Meyerson’s business model was quickly adopted as conglomerates saw the opportunity to both control and reduce their operating costs, improve company focus, and free up internal resources for better value-added activities.
One of the most notable examples of outsourcing at scale was Eastman Kodak’s decision to outsource its IT systems in 1989.
Instead of running its information technology systems in-house, Kodak chose to outsource this function to IBM, which designed, built and managed a data centre on the company’s behalf. Hundreds of Kodak employees were also transferred to IBM.
It was a big move – and one that has since been regarded as having launched the modern IT outsourcing movement. Indeed, the move was seismic to the extent that as Caldwell et al. have stated, ‘Kodak appears to have legitimised outsourcing, leading to what some have called ‘the Kodak effect’’.
It wasn’t long before other companies followed suit – ‘Senior executives at well known companies in the U.S. have followed Kodak’s example and signed long term contracts worth hundreds of millions of dollars with outsourcing ‘partners’. A number of high profile multi-billion dollar ‘mega-deals’ have been signed which has raised awareness even more’3.
By the 1990s outsourcing had become truly mainstream – with management consultant Peter Drucker coining the phrase ‘Do what you do best and outsource the rest’.
Today, outsourcing is a mainstream business model – especially in the realm of information technology and software development. In fact, by 2029 the IT offshoring market is expected to reach a valuation of $617.29 billion4.
What are the benefits of outsourcing your software development?
Is it really worth outsourcing the development of your software to a third party agency? Here at GoodCore, we can confirm that outsourcing has numerous advantages and benefits. Below, we’ve set out the main benefits that you could potentially expect from outsourcing your software development.
Cost reduction
This is arguably the biggest and most tangible benefit associated with outsourcing your software development.
Consider the scenario that you decide to develop your application/software in-house. Firstly, you’ll need to hire dedicated staff (including developers and the associated supporting roles). The cost of doing this can quickly add up. You’ll need to:
- Pay salaries.
- Pay National Insurance contributions.
- Cover onboarding and training expenses.
- Provide holiday pay.
- Cover workplace pension contributions.
You also have to go to the effort of actually finding the individuals to hire in the first place. This can be a time-consuming and costly process (particularly if you end up paying recruitment fees).
By outsourcing your software development to a third party like GoodCore, you completely eliminate a considerable amount of costs.
There are a slew of other costs that can also be avoided by outsourcing.
These include a number of capital costs such as computers, software licences, office costs, and other related overheads.
In short, the savings to be had from outsourcing can be stunning – and are arguably the key (but not only) reason that companies choose to outsource their development projects.
Improved efficiency and speed
Outsourcing your dev project can also result in a quicker and more efficient execution of the project.
Why?
Because of Peter Drucker’s famous phrase: ‘Do what you do best and outsource the rest’.
Software development outsourcing companies such as GoodCore have established and well-refined processes in place to ensure they can develop applications rapidly, efficiently and accurately.
They specialise in development and nothing else – thus they are able to complete projects without the distractions that can be inherent to in-house development.
Outsourcing companies also have an incentive to complete dev projects as quickly and efficiently as possible – the sooner they complete a project, the sooner they can move on to the next one. This incentive is not always apparent in in-house teams – as, under the principle of public choice theory5 – they do not have the same motivations to complete projects within deadlines and budgets.
Ultimately, the pace and efficiency of outsourced dev teams means that you benefit from a faster time to market. The sooner your software/app is ready for public release, the sooner you can start reaping revenue from it.
Flexibility and scalability
The world of software is always changing. As a result, if you want to develop an application or piece of software to take advantage of an emerging opportunity, you’ll need to be able to build and develop it before the competition.
Outsourcing allows you to do exactly that – being able to access considerable development resources at a moment’s notice.
Compare this to doing it yourself.
If you spot an opportunity, but want to develop it in-house, you’ll need to either maintain your current team and develop at a slower pace, or you’ll need to recruit more developers. This can not only take a while (finding great talent is a challenge in and of itself), but leaves you with an enlarged in-house team.
What happens when the opportunity has passed? You’ll potentially be left with a larger team than you need. If you want to then shrink it, you’ll need to enter into consultation about redundancies (along with the financial and morale costs that are associated with this).
By choosing a development outsourcing company like GoodCore you can choose as much or as little dev resources as you need and rapidly develop your software idea.
Risk mitigation
Outsourcing your development project to a third party can help mitigate risk.
How? Because, as development specialists, third party agencies have robust (and well tested) processes in place to manage risk.
Third party agencies are able to identify potential liabilities during the development process. They will also usually have a dedicated quality assurance (QA) team that is trained to spot any potential problems with software.
Finally, outsourcing your software project helps to reduce the risk of a ‘single point of failure’. Imagine if you develop a piece of software in-house. You have a full-stack developer who is able to build and deploy the software. Great!
But, what happens if that person leaves your company? Or worse, has a medical emergency and is unable to return to work?
You could be left in a position where your business depends on a piece of software, but you have little to no institutional knowledge as to how it was coded, how it operates, how it can be updated (if it all), and little to no idea about interoperability with other systems.
Outsourcing your project to a third party can significantly reduce this risk of a single point of failure. Third party developers will typically assign several dedicated programmers to a project – thus multiple people will be familiar with the project and the way in which it has been built. Third party development agencies can also provide documentation, leaving you with detailed information about how the software works, its features, and how to use it.
Access to in-depth, up-to-date expertise
Outsource development companies operate in a highly-competitive marketplace. They have to compete against many other agencies to win business.
As a result, it’s in their best interest to ensure that they not only employ the very best developers (and other subject-matter experts), but that those developers keep up-to-date with the latest trends, technologies, concepts, theories, and programming languages.
In short, they must maintain a comprehensive and up-to-date overview of their knowledge domain. If they don’t, another developer at another agency will win a client’s business instead.
In-house developers don’t necessarily have the same incentive to stay up-to-date with the latest and greatest trends in development. This can largely be attributed to a lack of competition. As they don’t have to compete with other developers to secure work, they do not necessarily have the pressure to accrue new knowledge.
There’s also the fact that development outsourcing agencies typically employ multiple developers (and different types of developers). This creates what is known in economic terms as a ‘catallaxy’ – or a network effect – whereby multiple individuals are able to share ideas and knowledge and learn from each other.
In-house development teams are typically smaller, in some cases being made up of only one or two individuals. This reduces the talent pool within which new ideas can emerge, be shared, and where new knowledge can be gained. It is a suboptimal epistemological environment.
Focus on core business functions
One of the most touted – and provable – benefits of outsourcing the development of your software is that it allows you to focus on your core business functions.
As the example of the conglomerates shows, attempting to control every aspect of your business across the entire supply chain can lead to the build up of inefficiencies, the misallocation of capital to unproductive (or under productive) uses, and ultimately uncompetitive transaction costs.
You can think about this using a practical example.
If you run a business that has field sales representatives you are likely to provide them with a car. But, you wouldn’t attempt to design and build that car yourself – you’d buy one from a specialist automotive manufacturer.
The same principle applies to software.
If you’ve little to no experience in developing software, it doesn’t make sense to attempt to build it yourself. You’d pay a specialist software developer to build it for you.
Doing this allows you to focus on your core business activities – those at which you are particularly adroit and expert at.
By outsourcing the development of your software you can ensure that your time, attention and capital is directed to the most productive sources – thus increasing your turnover and profitability.
No need for micromanagement
If you are developing software in-house you’ll be faced with the challenge of managing the team and the project overall.
This can be a not inconsiderable task – one that soaks up hours of time – time that could be spent elsewhere on more productive activities.
When you outsource your development to a company like GoodCore the project will be managed on your behalf with an appropriate development methodology employed to ensure the project remains on-time and within budget.
Read also: In-House Product Development VS Outsourcing Software Development For Startups
Specialised development areas
As we mentioned earlier, software development outsourcing companies (and their employees) have an incentive to stay up-to-date with the latest evolutions in development.
They also have an incentive to specialise (if there is sufficient market demand) in niche development areas.
For example, if you want to outsource a blockchain, Internet of Things, artificial intelligence, machine learning or cryptocurrency based project, there is almost certainly a third party developer that has the niche, specialist knowledge to execute these projects on your behalf.
Customisation
The chances are, if you are going to develop a piece of software in-house, you’ll need to use (at least in part) some off-the-shelf applications or integrations to complete it.
Yet, this can put some fairly stringent limits on how much you can customise your software (it can also tie you into costly, and rising subscription plans etc).
But, by choosing to outsource your software you open up the possibility of extensive customisation. In short, a third party agency can typically help you create custom software in a way that an in-house team cannot.
This comes down to the point we made earlier about the ‘network effect’ of working in large teams, as well as the market-effect that provides an incentive for outsourcing companies to be highly knowledgeable and specialised.
Latest software
Outsourcing your development project can also mean that you benefit from the very latest software – speeding up and improving the overall execution of your project.
Third party developers will not only usually be fluent in a broad range of high-level programming languages, but they’ll have access to the latest development environments and tools that will ensure a quality piece of software is the end result.
Again, it makes sense for third party developers to purchase these tools in a way that it doesn’t for in-house teams. Whereas an in-house team may only have limited applications for these tools, a third party agency will be using them constantly.
Outsourced development companies like GoodCore also have an incentive to ensure they are using the latest software and tools as this provides them with a competitive advantage over their competitors who are vying for your business.
Access to knowledge, expertise and experience
By partnering with a development outsourcing company you can potentially gain more than just a fantastic piece of software.
There is – with the very best outsource agencies at least – a degree of knowledge transfer, where the outsourced team is able to provide advice and guidance to in-house teams – bolstering their own development and knowledge.
This is a ‘win, win’ in the majority of cases as the progression of the project is able to benefit from increased understanding from all parties involved.
Access to a global talent pool
The chances are, if you have an in-house team of developers, they’re all located in the same country and time zone.
This means if you choose to develop software in-house, it’ll only progress in seven to eight hour ‘bursts’ (at most).
But, what would happen if you were to outsource the development of your software to a company like GoodCore?
Well, here at GoodCore, we maintain developer resources in Croydon, UK, Karachi, Pakistan, and Cyberjaya, Malaysia. This means we are able to tap into resources across multiple timezones – resulting in software dev projects being completed rapidly.
The fact that we have a global team also means we are able to tap into insights, experiences, and knowledge that may not otherwise be available from a team based in a single geographic location.
Ricardo and comparative advantage
Why does outsourcing work so well? Why does it yield many tangible benefits? Because of an economic concept known as comparative advantage.
First formulated by British economist David Ricardo in the nineteenth century, the concept of comparative advantage posits that ‘nations should concentrate resources only in industries where they have the greatest efficiency of production relative to their own alternative uses of resources’6.
Although Ricardo was talking about nations in his example, the same principle applies to individual companies.
Let’s have a look at a hypothetical example.
Imagine you run a large business that has its own in-house development team. That team is able to produce 10 front-end features or eight back-end features per sprint.
Now, imagine that you are thinking of outsourcing your software development to a smaller, leaner company (let’s, for the sake of this example, call it Good Software UK).
Good Software UK is able to develop four front-end features or five back-end features per sprint.
On the face of it, your business appears more productive overall. So, is it really worth outsourcing it? The answer is ‘yes’ if you take into account a concept known as opportunity cost.
Here’s how it works:
- For your business to develop one back-end feature means sacrificing 1.25 front-end features (this is based on: 10 front-end features/sprint ➗ eight back-end features/sprint = 1.25 front-end features/back-end feature).
- For Good Software UK, developing a single back-end feature means sacrificing only 0.8 front-end features (this is based on: four front-end features/sprint ➗ five back-end features/sprint = 0.8 front-end features/back-end feature).
In short, this reveals that Good Software UK, has a comparative advantage in back-end development. Their opportunity cost is lower, meaning they sacrifice fewer front end features to build a back-end feature.
I appreciate I’m going into considerable detail here, but the point is, outsourcing dev projects works because comparative advantage drives specialisation, leading to faster development cycles, improved software quality and overall better project outcomes.
The potential risks of outsourcing development work
As the point above makes clear, outsourcing only works if your chosen provider has a comparative advantage and is specialist enough to successfully execute an entire software development project.
Which means it’s incredibly important to thoroughly assess and understand the capabilities of an outsourced developer before committing to them. Below, I’ve set out the key risks you should be aware of when outsourcing your dev project.
Choosing an experienced vendor
If you are able to select a highly-experienced development vendor, then you’ll find that all other risks are greatly reduced (if not eliminated altogether).
In order to choose a vendor, it’s best to look for one that is able to demonstrate actual experience and expertise through detailed case studies.
The best vendors also offer transparency about their pricing structures, and the way in which they project manage and communicate throughout the life of dev projects.
And, the absolute very best vendors will be happy to talk to you and provide you with an initial free 30-minute session with their consulting team to discuss your needs and get a detailed project estimate.
Also check out our blog: Top Questions To Ask a Software Development Company
Project control
It’s natural that if you’re going to outsource your dev project that you’ll be worried about losing control over it.
That’s why it’s essential to review what project control protocols your chosen vendor uses.
For example, here at GoodCore, we provide you with direct access to the software developers working on your project. We also fully manage team performance in collaboration with you and provide proactive and transparent communication.
In addition, each project is assigned a specialist account manager who oversees the delivery of your project in line with clearly defined KPIs.
If your prospective vendor doesn’t offer this level of insight into project control, then walk away!
Sensitive data safety
The development of software can involve the handling of commercially-sensitive and/or private data.
Which is why it’s important when selecting a vendor that you choose one that has robust security protocols.
Firstly, they should be willing to sign a non-disclosure agreement (NDA) so that any data they handle remains strictly confidential.
However, it’s also important that your chosen outsourced developer actually creates your software in-line with privacy and security best practices – after all, you don’t want to fall foul of your customers’ data being leaked etc.
Here at GoodCore, our development process encompasses software security best practices including data encryption, access controls, vulnerability assessment, audit trails, patch management, and the security of third-party components (if applicable).
Hidden costs
Another potential pitfall to look out for in relation to the outsourcing of software development is hidden costs.
Hidden costs can arise due to a number of factors. These include:
- Your chosen vendor underestimates the complexity of a project.
- Unforeseen technical challenges.
- Scope creep.
- Communication and collaboration issues.
- Insufficient or incorrect quality assurance testing.
- Unexpected infrastructure costs.
- Legal or regulatory issues.
If you want to avoid the hidden costs that can arise from the issues outlined above, it’s imperative you select a third party agency that has clearly defined engagement options that have clear deliverables.
Your chosen vendor should also demonstrate a clear understanding of how and why those issues above can arise – and have mitigation strategies in place to prevent them arising in the first place.
What are the different types of software development outsourcing models?
There are a number of different ways you can engage with a software development vendor. Each model has its own pros and cons and will have different implications in relation to costs, resources and timelines.
Here at GoodCore, we offer the three main types of software development outsourcing models; fixed price, staff augmentation, and dedicated team.
Fixed price software outsourcing
As the name suggests, a fixed price software outsourcing model sees the project being delivered to a pre-agreed budget.
This outsourcing model is particularly suited to well-defined projects where you already have a strong idea of what specifications, features, and functionalities you want to achieve.
Here at GoodCore, our fixed price software outsourcing model has four core pillars:
- Resource plan – we begin by assembling a team with the required skill sets to complete your project. Each team has a dedicated project manager to ensure your project stays on time and within budget.
- Length of engagement – we agree on a fixed-term engagement, with a well-defined start and end date based on the project milestones.
- Your role and involvement – we take full ownership of the project, although you will have constant contact with your project manager.
- Payment schedule – we agree payments based on predetermined delivery milestones. The usual payment schedule includes an upfront fee, payment after the discovery phase, user acceptance testing, and go-live.
Staff augmentation software outsourcing
As we mentioned earlier in this article, you don’t always need to completely outsource the entirety of your software development project.
Instead, you may just need to add a few extra members to your in-house team in order to fill skills or knowledge gaps.
That’s where the staff augmentation software outsourcing model comes in.
In this scenario, GoodCore assembles a team that directly addresses skill gaps – or adds needed capacity – to your in-house team. This means you can scale up your in-house team without needing to engage in costly hiring and retention activities.
Staff augmentation software outsourcing is typically used for longer-term projects. Payments are usually made on a monthly cycle, and are calculated based on the allocated resources used each month.
Dedicated team software outsourcing
If you don’t possess an in-house team – or you prefer to outsource the entirety of your software development project – then the dedicated team model is the perfect option.
Agencies such as GoodCore will provide you with an entire team structure (covering developers, testers, UI/UX designers, DevOps etc) who will work on an exclusive basis on your project.
Whilst the vendor (e.g. GoodCore) will directly manage the team, you, the client, will have as much input as you want to define the vision and requirements of the software.
The dedicated team outsourcing model is normally billed on a monthly cycle, with the cost being based on the allocated resources used during that month.
How to develop a software outsourcing strategy
Does outsourcing sound like an appealing strategy for your business? Then it’s time to formulate an outsourcing strategy.
Set and define goals
The foundational part of your outsourcing strategy should be a set of well-defined goals that you want your outsourcing project to achieve.
Perhaps most importantly, think about what your software needs to do.
This means you won’t be basing your search for vendors solely on price (which is an all-too common pitfall).
With a strong set of goals for your software, you’ll have a clearer understanding of what tech stack, budget and timeline your vendor should be recommending.
Define tasks to be outsourced
What tasks do you want to outsource? If you’re going to be undertaking some of the work in-house, this is particularly important so that you don’t ‘double up’ and duplicate work.
Arguably the best way of doing this is to create a software requirements specification (SRS) document. This should outline the functional and non-functional requirements of the software and establish a scope of work. This should set out what you expect the vendor to do, as well as what you’ll be responsible for.
Think of SRS as being the ‘roadmap’ that will guide the development process.
Define your tech profile
This may seem like a minor point, but it can be a good idea to describe your tech profile (e.g. the various workspace softwares that you use), so that you can align with a potential vendor.
This is especially important if much of the project is going to be taking place remotely.
For example, if your team uses Google Meets for video calling, then it can be handy to choose a vendor that also uses Google Meets. This improves interoperability and reduces barriers to communication etc.
Define your tech stack
Given the cost implications of things like cloud hosting, it’s recommended that you give some thought as to what tech stack your new software is going to use.
You should also give some thought as to how ‘bespoke’ you want to go, or whether you are happy to use ‘off-the-shelf’ products etc.
Choose your outsourcing destination
Based on the principle of comparative advantage that we discussed above, it can often be cost-effective to outsource your software development to agencies based in certain countries.
For example, Asia and Eastern Europe have numerous countries that are awash with tech talent. Belarus and Ukraine are two Eastern European countries that have quickly risen in the outsourcing rankings in recent years.
If you are based in the Americas, then outsourcing to Latin American providers is an option that many businesses have considered. Why? It comes down to three factors:
- The cost differential. Labour costs in Latin America are considerably cheaper than the U.S.
- Proximity. Most Latin American countries are only a short flight from the Lower 48 of the U.S.
- Time zone. There is generally minimal time zone difference between Latin American countries and geographically aligned states in the US.
Bear in mind, however, that you may want to mitigate differences in timezones/communication etc.
So, why not consider choosing an agency like GoodCore, which has locations and teams in the UK, Pakistan, and Malaysia? This provides you with the best of all worlds – excellent, clear communication, cost savings and rapid delivery.
Choose your engagement model
As we mentioned earlier, there are a number of different outsourcing engagement models open to you.
Which one model is best for you is very much dependent on the extent to which you want to carry out development in-house (if at all), your budget, the complexity of the project, the duration of the project, and any specialist requirements you have.
Research potential vendors/partners
Once you’ve determined your outsourcing strategy it’s time to start shopping around and speaking to potential partner vendors.
As you’re likely to find, however, there are numerous outsourcing development agencies to choose from. What’s the best way to sort and filter through them?
Here are our top tips:
- Check they have a proper registered address, registered company number, and VAT number.
- Put a face to a name. Can you tell who runs the company? And, what their background is?
- Does the company have easily verifiable case studies?
- Does the company have online reviews?
- Does the company provide details about the tech stack and programming languages it uses?
- Is the company transparent about its pricing models?
- Does the company offer an initial consultation so you can discuss your software needs?
If a vendor ticks all these boxes, then there’s a strong likelihood they will offer an excellent and dependable outsourcing experience.
Busting outsourcing myths
Perhaps you’re on the verge of outsourcing your software development project – but then someone in your team pops up and intercedes with an ‘outsourcing myth’.
Are these myths about outsourcing really justified?
Let’s take a look at the most common outsourcing myths.
“Outsourcing is just about reducing costs”
Whilst one of the main motivating factors of outsourcing is to reduce costs – that’s not the only reason to do so.
As we’ve discussed throughout this article, outsourcing allows you to access some of the best software engineering talent in the world, without having to hire them directly as full-time employees.
Outsourcing also allows you to access very niche skill sets or knowledge domains that you wouldn’t otherwise have the resources to hire.
Outsourcing also allows you to scale up and down your development capabilities without having to engage in costly hiring and retention activity.
It’s about more than just reducing costs!
“Outsourcing increases costs”
Wrong. Whilst this is a counterintuitive suggestion, it’s completely wrong to suggest that outsourcing reduces costs.
In fact, as we’ve (hopefully) made clear throughout this article, outsourcing allows you to avoid a whole plethora of costs – from fixed costs like equipment and building overheads – to flexible costs like software licences and employee fees.
“Outsourcing is the same as using freelancers”
Wrong. When you outsource your software development project to a company like GoodCore, you’re getting more than just a developer. You’re getting the support of a whole team of specialists – from QA testers to UI/UX designers, and project managers to DevOps.
That’s definitely far more than the type of support you get from a freelancer (or group of freelancers).
Outsource your software development to GoodCore today
If you’re looking for an expert team that can execute your software project on your behalf, then you’ll not find anyone better than GoodCore.
Speak to our team now for a free consultation about your requirements, or alternatively, learn more about our outsourced software development resources.
REFERENCES
- McCarthy I, Anagnostou A. The impact of outsourcing on the transaction costs and boundaries of manufacturing [online]. Available at: https://www.sciencedirect.com/science/article/abs/pii/S092552730300183X?via%3Dihub (Accessed on 23rd January 2025).
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