{"id":5657,"date":"2025-02-17T06:17:22","date_gmt":"2025-02-17T06:17:22","guid":{"rendered":"https:\/\/www.goodcore.co.uk\/blog\/?p=5657"},"modified":"2025-02-17T07:11:59","modified_gmt":"2025-02-17T07:11:59","slug":"software-development-outsourcing-guide","status":"publish","type":"post","link":"https:\/\/www.goodcore.co.uk\/blog\/software-development-outsourcing-guide\/","title":{"rendered":"The Definitive Guide to Software Development Outsourcing"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">If you\u2019re considering developing a new piece of software, the chances are you\u2019re going to need to outsource its development. But, what exactly does the process of <\/span><span style=\"font-weight: 400;\">outsourcing software development<\/span><span style=\"font-weight: 400;\"> 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.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is software development outsourcing?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Let\u2019s kick things off with a definition. What does \u2018software development outsourcing\u2019 actually mean?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the simplest terms, it refers to the development of software being undertaken by a third party.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Put yourself in the picture; you run a business<\/span><span style=\"font-weight: 400;\">, and<\/span><span style=\"font-weight: 400;\"> 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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thus, you choose to outsource the development of the software to a company that specialises in the development of software.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This allows you to concentrate on your core business activities whilst a set of specialists develop the software on your behalf.\u00a0<\/span><\/p>\n<p><b>That <\/b><span style=\"font-weight: 400;\">is the essence of software development outsourcing.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What does the outsourcing of software development involve?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And, when we talk about \u2018software\u2019 we\u2019re referring to the full gamut of software. Everything from operating systems to application software can be &#8211;<\/span><i><span style=\"font-weight: 400;\"> and is<\/span><\/i><span style=\"font-weight: 400;\"> &#8211; outsourced to specialist development agencies (like ourselves here at GoodCore).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These specialist development outsource companies will typically employ a team of dedicated specialists spanning the complete development lifecycle. This can include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Full-stack developers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Front-end developers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Back-end developers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Mobile app developers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Data scientists.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In short &#8211; they employ individuals with the requisite skills, expertise and experience required to complete an entire software development project from start to finish.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Examples of methodologies employed by third party developers include:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Code and fix.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Agile development.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Waterfall development.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Rapid Application Development (RAD).\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Spiral development.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Shape Up.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Third party developers will also employ multiple software development practices &#8211; such as DevOps, continuous integration (CI), continuous delivery (CD), and stakeholder engagement.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">JavaScript<\/span><span style=\"font-weight: 400;\"> (JS).\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Java.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Python.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">SQL (Structure Query Language).\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">C.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">C++.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">TypeScript.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">PHP.\u00a0<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Full versus piecemeal development outsourcing<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It\u2019s important to note that third party development firms don\u2019t 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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This can be viewed as \u2018full vs piecemeal\u2019 outsourcing.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A business may decide that their internal team is capable of completing parts of a project &#8211; with more complex or onerous parts of the project outsourced to a third party.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Or, <\/span><\/i><span style=\"font-weight: 400;\">a business may decide that they lack the requisite experience entirely and decide to outsource the complete dev project.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are also instances where third party developers are chosen to step in and take over a development project which is still in progress &#8211; this is known as \u2018<\/span><a href=\"https:\/\/www.goodcore.co.uk\/services\/software-project-rescue\/\"><span style=\"font-weight: 400;\">project take over and rescue<\/span><\/a><span style=\"font-weight: 400;\">\u2019.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Want to find out more about the software development process? Then read GoodCore\u2019s <\/span><\/i><a href=\"https:\/\/www.goodcore.co.uk\/blog\/software-development-a-complete-guide\/\"><i><span style=\"font-weight: 400;\">complete guide to software development<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> now.\u00a0<\/span><\/i><\/p>\n<h2><span style=\"font-weight: 400;\">What exactly is outsourcing?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you\u2019ve even a passing familiarity with the world of business, then you\u2019ll have undoubtedly encountered the word \u2018outsourcing\u2019.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But, what exactly does it mean? What does it involve? And, what are its roots?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019ll explore the answers to these questions in this next section.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outsourcing has been defined as \u2018a business practice in which companies use external providers to carry out business processes that would otherwise be handled internally\u2019<sup>1<\/sup><\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outsourcing &#8211; as a business practice &#8211; 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 <\/span><i><span style=\"font-weight: 400;\">outside resourcing.\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">But, why did it emerge in the first place? And, what came before it?\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">A brief history of outsourcing<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The dawn of the twentieth century saw the emergence of the first conglomerates (perhaps best exemplified by the Ford Motor Company).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These conglomerates placed a particular emphasis upon control, rationalisation and the elimination of uncertainty. Thus, they pursued vertical and horizontal integration &#8211; bringing as much as possible in-house. <\/span><span style=\"font-weight: 400;\">Hence,<\/span><span style=\"font-weight: 400;\"> the etymology of the term \u2018conglomerate\u2019 which is derived from the Latin \u2018con\u2019 (together) and \u2018glomus\u2019 (ball) &#8211; quite literally \u2018ball together\u2019.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As McCarthy summarised Ford\u2019s development as a conglomerate:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u2018The 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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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\u2019<sup>2<\/sup><\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This strategy became widely adopted, with conglomerates arising across all industries throughout the middle period of the twentieth century.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, by the early 1990s an alternative strategy emerged &#8211; that of \u2018outsourcing\u2019.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Again, to reference McCarthy, although conglomeration had allowed companies to convert an idea or need into a marketable product, \u2018The 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\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In effect, trying to do everything in-house had led to businesses becoming burdened with unnecessary costs and uncompetitive prices.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Businesses were looking for a new way of doing things.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meyerson\u2019s 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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One of the most notable examples of outsourcing at scale was Eastman Kodak\u2019s decision to outsource its IT systems in 1989.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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\u2019s behalf. Hundreds of Kodak employees were also transferred to IBM.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It was a big move &#8211; 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 <\/span><span style=\"font-weight: 400;\">et al.<\/span><span style=\"font-weight: 400;\"> have stated, \u2018Kodak appears to have legitimised outsourcing, leading to what some have called \u2018the Kodak effect\u2019\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It wasn\u2019t long before other companies followed suit &#8211; \u2018Senior executives at well known companies in the U.S. have followed Kodak\u2019s example and signed long term contracts worth hundreds of millions of dollars with outsourcing \u2018partners\u2019. A number of high profile multi-billion dollar \u2018mega-deals\u2019 have been signed which has raised awareness even more\u2019<sup>3<\/sup><\/span><span style=\"font-weight: 400;\">.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By the 1990s outsourcing had become truly mainstream &#8211; with management consultant Peter Drucker coining the phrase \u2018Do what you do best and outsource the rest\u2019.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Today, outsourcing is a mainstream business model &#8211; 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 billion<sup>4<\/sup><\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What are the benefits of outsourcing your software development?<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5671 size-full\" src=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Benefits-of-Outsourcing.jpg\" alt=\"benefits of outsourcing\" width=\"1500\" height=\"1209\" srcset=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Benefits-of-Outsourcing.jpg 1500w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Benefits-of-Outsourcing-300x242.jpg 300w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Benefits-of-Outsourcing-1024x825.jpg 1024w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Benefits-of-Outsourcing-150x121.jpg 150w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Benefits-of-Outsourcing-768x619.jpg 768w\" sizes=\"(max-width: 1500px) 100vw, 1500px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">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\u2019ve set out the main benefits that you could potentially expect from outsourcing your software development.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Cost reduction<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This is arguably the biggest and most tangible benefit associated with outsourcing your software development.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consider the scenario that you decide to develop your application\/software in-house. Firstly, you\u2019ll need to hire dedicated staff (including developers and the associated supporting roles). The cost of doing this can quickly add up. You\u2019ll need to:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Pay salaries.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Pay National Insurance contributions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cover onboarding and training expenses.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Provide holiday pay.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cover workplace pension contributions.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">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).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By outsourcing your software development to a third party like GoodCore, you completely eliminate a considerable amount of costs.\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5672 size-full\" src=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/IN-HOUSE-VS-OUTSOURCING.jpg\" alt=\"inhouse vs outsourcing cost comparison\" width=\"1500\" height=\"938\" srcset=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/IN-HOUSE-VS-OUTSOURCING.jpg 1500w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/IN-HOUSE-VS-OUTSOURCING-300x188.jpg 300w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/IN-HOUSE-VS-OUTSOURCING-1024x640.jpg 1024w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/IN-HOUSE-VS-OUTSOURCING-150x94.jpg 150w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/IN-HOUSE-VS-OUTSOURCING-768x480.jpg 768w\" sizes=\"(max-width: 1500px) 100vw, 1500px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">There are a slew of other costs that can also be avoided by outsourcing.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These include a number of capital costs such as computers, software licences, office costs, and other related overheads.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In short, the savings to be had from outsourcing can be stunning &#8211; and are arguably the key (but not only) reason that companies choose to outsource their development projects.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Improved efficiency and speed<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Outsourcing your dev project can also result in a quicker and more efficient execution of the project.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Why?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Because of Peter Drucker\u2019s famous phrase:<\/span> <span style=\"font-weight: 400;\">\u2018Do what you do best and outsource the rest\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">They specialise <\/span><\/i><span style=\"font-weight: 400;\">in development and nothing else &#8211; thus they are able to complete projects without the distractions that can be inherent to in-house development.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outsourcing companies also have an incentive to complete dev projects as quickly and efficiently as possible &#8211; 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 &#8211; as, under the principle of <\/span><i><span style=\"font-weight: 400;\">public choice theory<sup>5<\/sup><\/span><\/i> <span style=\"font-weight: 400;\">&#8211; they do not have the same motivations to complete projects within deadlines and budgets.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ultimately, the pace and efficiency of outsourced dev teams means that <\/span><b>you <\/b><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Flexibility and scalability<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">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\u2019ll need to be able to build and develop it before the competition.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outsourcing allows you to do exactly that &#8211; being able to access considerable development resources at a moment\u2019s notice.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Compare this to doing it yourself.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you spot an opportunity, but want to develop it in-house, you\u2019ll need to either maintain your current team and develop at a slower pace, or you\u2019ll 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.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What happens when the opportunity has passed? You\u2019ll potentially be left with a larger team than you need. If you want to then shrink it, you\u2019ll need to enter into consultation about redundancies (along with the financial and morale costs that are associated with this).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Risk mitigation<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Outsourcing your development project to a third party can help mitigate risk.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">How? Because, as development specialists, third party agencies have robust (and well tested) processes in place to manage risk.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Finally, outsourcing your software project helps to reduce the risk of a \u2018single point of failure\u2019. 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!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But, what happens if that person leaves your company? Or worse, has a medical emergency and is unable to return to work?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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 &#8211; 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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Access to in-depth, up-to-date expertise<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Outsource development companies operate in a highly-competitive marketplace. They have to compete against many other agencies to win business.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a result, it\u2019s in their best interest to ensure that they not only employ the very best developers (and other <\/span><span style=\"font-weight: 400;\">subject-matter experts<\/span><span style=\"font-weight: 400;\">), but that those developers keep up-to-date with the latest trends, technologies, concepts, theories, and programming languages.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In short, they must maintain a comprehensive and up-to-date overview of their knowledge domain. If they don\u2019t, another developer at another agency will win a client\u2019s business instead.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In-house developers don\u2019t 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\u2019t have to compete with other developers to secure work, they do not necessarily have the pressure to accrue new knowledge.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There\u2019s 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 \u2018catallaxy\u2019 &#8211; or a network effect &#8211; whereby multiple individuals are able to share ideas and knowledge and learn from each other.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Focus on core business functions<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">One of the most touted &#8211; and provable &#8211; benefits of outsourcing the development of your software is that it allows you to focus on your core business functions.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can think about this using a practical example.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you run a business that has field sales representatives you are likely to provide them with a car. But, you wouldn\u2019t attempt to design and build that car yourself &#8211; you\u2019d buy one from a specialist automotive manufacturer.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The same principle applies to software.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019ve little to no experience in developing software, it doesn\u2019t make sense to attempt to build it yourself. You\u2019d pay a specialist software developer to build it for you.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Doing this allows you to focus on your core business activities &#8211; those at which you are particularly adroit and expert at.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By outsourcing the development of your software you can ensure that your time, attention and capital is directed to the most productive sources &#8211; thus increasing your turnover and profitability.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">No need for micromanagement<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If you are developing software in-house you\u2019ll be faced with the challenge of managing the team and the project overall.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This can be a not inconsiderable task &#8211; one that soaks up hours of time &#8211; time that could be spent elsewhere on more productive activities.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Read also: <\/span><a href=\"https:\/\/www.goodcore.co.uk\/blog\/startup-outsourcing-vs-in-house-development\/\"><span style=\"font-weight: 400;\">In-House Product Development VS Outsourcing Software Development For Startups<\/span><\/a><\/p>\n<h3><span style=\"font-weight: 400;\">Specialised development areas<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">They also have an incentive to <\/span><i><span style=\"font-weight: 400;\">specialise <\/span><\/i><span style=\"font-weight: 400;\">(if there is sufficient market demand) in niche development areas.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Customisation<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The chances are, if you are going to develop a piece of software in-house, you\u2019ll need to use (at least in part) some off-the-shelf applications or integrations to complete it.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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 <\/span><a href=\"https:\/\/www.goodcore.co.uk\/services\/bespoke-software-development\/\"><span style=\"font-weight: 400;\">custom software<\/span><\/a><span style=\"font-weight: 400;\"> in a way that an in-house team cannot.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This comes down to the point we made earlier about the \u2018network effect\u2019 of working in large teams, as well as the market-effect that provides an incentive for outsourcing companies to be highly knowledgeable and specialised.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Latest software<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Outsourcing your development project can also mean that you benefit from the very latest software &#8211; speeding up and improving the overall execution of your project.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Third party developers will not only usually be fluent in a broad range of high-level programming languages, but they\u2019ll have access to the latest development environments and tools that will ensure a quality piece of software is the end result.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Again, it makes sense for third party developers to purchase these tools in a way that it doesn\u2019t 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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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 <\/span><b>your <\/b><span style=\"font-weight: 400;\">business.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Access to knowledge, expertise and experience<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">By partnering with a development outsourcing company you can potentially gain more than just a fantastic piece of software.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is &#8211; with the very best outsource agencies at least &#8211; a degree of knowledge transfer, where the outsourced team is able to provide advice and guidance to in-house teams &#8211; bolstering their own development and knowledge.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is a \u2018win, win\u2019 in the majority of cases as the progression of the project is able to benefit from increased understanding from all parties involved.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Access to a global talent pool<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The chances are, if you have an in-house team of developers, they\u2019re all located in the same country and time zone.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This means if you choose to develop software in-house, it\u2019ll only progress in seven to eight hour \u2018bursts\u2019 (at most).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But, what would happen if you were to outsource the development of your software to a company like GoodCore?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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 &#8211; resulting in software dev projects being completed rapidly.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Ricardo and comparative advantage<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Why does outsourcing work so well? Why does it yield many tangible benefits? Because of an economic concept known as <\/span><b>comparative advantage.\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">First formulated by British economist <\/span><a href=\"https:\/\/en.wikipedia.org\/wiki\/David_Ricardo\"><span style=\"font-weight: 400;\">David Ricardo<\/span><\/a><span style=\"font-weight: 400;\"> in the nineteenth century, the concept of comparative advantage posits that \u2018nations should concentrate resources only in industries where they have the greatest efficiency of production relative to their own alternative uses of resources\u2019<sup>6<\/sup><\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although Ricardo was talking about nations in his example, the same principle applies to individual companies.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s <\/span><span style=\"font-weight: 400;\">have a look<\/span><span style=\"font-weight: 400;\"> at a hypothetical example.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, imagine that you are thinking of outsourcing your software development to a smaller, leaner company (let\u2019s, for the sake of this example, call it Good Software UK).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Good Software UK is able to develop four front-end features or five back-end features per sprint.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the face of it, your business appears more productive overall. So, is it really worth outsourcing it? The answer is \u2018yes\u2019 if you take into account a concept known as opportunity cost.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s how it works:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">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 \u2797 eight back-end features\/sprint = 1.25 front-end features\/back-end feature).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">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 \u2797 five back-end features\/sprint = 0.8 front-end features\/back-end feature).\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I appreciate I\u2019m 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.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">The potential risks of outsourcing development work<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Which means it\u2019s incredibly important to thoroughly assess and understand the capabilities of an outsourced developer before committing to them. Below, I\u2019ve set out the key risks you should be aware of when outsourcing your dev project.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Choosing an experienced vendor<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If you are able to select a highly-experienced development vendor, then you\u2019ll find that all other risks are greatly reduced (if not eliminated altogether).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In order to choose a vendor, it\u2019s best to look for one that is able to demonstrate actual experience and expertise <\/span><span style=\"font-weight: 400;\">through detailed <\/span><a href=\"https:\/\/www.goodcore.co.uk\/cases\/\"><span style=\"font-weight: 400;\">case studies<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The best vendors also offer <\/span><span style=\"font-weight: 400;\">transparency about their <\/span><a href=\"https:\/\/www.goodcore.co.uk\/company\/pricing\/\"><span style=\"font-weight: 400;\">pricing structures<\/span><\/a><span style=\"font-weight: 400;\">,<\/span><span style=\"font-weight: 400;\"> and the way in which they project manage and communicate throughout the life of dev projects.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And, the absolute very best vendors will be happy to talk to you and provide you with an initial <\/span><a href=\"https:\/\/www.goodcore.co.uk\/contact\/\"><span style=\"font-weight: 400;\">free 30-minute session<\/span><\/a> <span style=\"font-weight: 400;\">with their consulting team to discuss your needs and get a detailed project estimate.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also check out our blog: <\/span><a href=\"https:\/\/www.goodcore.co.uk\/blog\/questions-to-ask-a-software-development-company\/\"><span style=\"font-weight: 400;\">Top Questions To Ask a Software Development Company<\/span><\/a><\/p>\n<h3><span style=\"font-weight: 400;\">Project control<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It\u2019s natural that if you\u2019re going to outsource your dev project that you\u2019ll be worried about losing control over it.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That\u2019s why it&#8217;s essential to review what project control protocols your chosen vendor uses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In addition, each project is assigned a specialist account manager who oversees the delivery of your project in line with clearly defined KPIs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If your prospective vendor doesn\u2019t offer this level of insight into project control, then walk away!<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Sensitive data safety<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The development of software can involve the handling of commercially-sensitive and\/or private data.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Which is why it\u2019s important when selecting a vendor that you choose one that has robust security protocols.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Firstly, they should be willing to sign a non-disclosure agreement (NDA) so that any data they handle remains strictly confidential.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, it\u2019s also important that your chosen outsourced developer actually creates your software in-line with privacy and security best practices &#8211; after all, you don\u2019t want to fall foul of your customers\u2019 data being leaked etc.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here at GoodCore, our development process encompasses software security best practices<\/span> <span style=\"font-weight: 400;\">including data encryption, access controls, vulnerability assessment, audit trails, patch management, and the security of third-party components (if applicable).\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Hidden costs<\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5673 size-full\" src=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Types-of-Software-Development-Costs.jpg\" alt=\"Types of Software Development Costs\" width=\"800\" height=\"535\" srcset=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Types-of-Software-Development-Costs.jpg 800w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Types-of-Software-Development-Costs-300x201.jpg 300w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Types-of-Software-Development-Costs-150x100.jpg 150w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Types-of-Software-Development-Costs-768x514.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Another potential pitfall to look out for in relation to the outsourcing of software development is hidden costs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Hidden costs can arise due to a number of factors. These include:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your chosen vendor underestimates the complexity of a project.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unforeseen technical challenges.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Scope creep.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Communication and collaboration issues.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insufficient or incorrect quality assurance testing.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unexpected infrastructure costs.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Legal or regulatory issues.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If you want to avoid the hidden costs that can arise from the issues outlined above, it\u2019s imperative you select a third party agency that has clearly defined engagement options that <\/span><span style=\"font-weight: 400;\">have<\/span><span style=\"font-weight: 400;\"> clear deliverables.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your chosen vendor should also demonstrate a clear understanding of how and why those issues above can arise &#8211; and have mitigation strategies in place to prevent them arising in the first place.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What are the different types of software development outsourcing models?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here at GoodCore, we offer the three main types of software development outsourcing models; fixed price, staff augmentation, and dedicated team.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Fixed price software outsourcing<\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5674 size-full\" src=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price.jpg\" alt=\"fixed price software outsourcing\" width=\"1500\" height=\"1500\" srcset=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price.jpg 1500w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price-300x300.jpg 300w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price-1024x1024.jpg 1024w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price-150x150.jpg 150w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price-768x768.jpg 768w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price-105x105.jpg 105w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/Fixed-Price-350x350.jpg 350w\" sizes=\"(max-width: 1500px) 100vw, 1500px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">As the name suggests, a fixed price software outsourcing model sees the project being delivered to a pre-agreed budget.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here at GoodCore, our fixed price software outsourcing model has four core pillars:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Resource plan<\/b><span style=\"font-weight: 400;\"> &#8211; we begin by assembling a team with the required <\/span><span style=\"font-weight: 400;\">skill sets<\/span><span style=\"font-weight: 400;\"> to complete your project. Each team has a dedicated project manager to ensure your project stays on time and within budget.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Length of engagement<\/b><span style=\"font-weight: 400;\"> &#8211; we agree on a fixed-term engagement, with a well-defined start and end date based on the project milestones.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Your role and involvement <\/b><span style=\"font-weight: 400;\">&#8211; we take full ownership of the project, although you will have constant contact with your project manager.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Payment schedule <\/b><span style=\"font-weight: 400;\">&#8211; 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.\u00a0<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Staff augmentation software outsourcing<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">As we mentioned earlier in this article, you don\u2019t always need to <\/span><i><span style=\"font-weight: 400;\">completely <\/span><\/i><span style=\"font-weight: 400;\">outsource the entirety of your software development project.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead, you may just need to add a few extra members to your in-house team in order to fill skills or knowledge gaps.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That\u2019s where the <\/span><a href=\"https:\/\/www.goodcore.co.uk\/services\/it-staff-augmentation\/\"><span style=\"font-weight: 400;\">staff augmentation software<\/span><\/a><span style=\"font-weight: 400;\"> outsourcing model comes in.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this scenario, GoodCore assembles a team that directly addresses skill gaps &#8211; or adds needed capacity &#8211; 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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Dedicated team software outsourcing<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If you don\u2019t possess an in-house team &#8211; or you prefer to outsource the entirety of your software development project &#8211; <\/span><span style=\"font-weight: 400;\">then the <\/span><a href=\"https:\/\/www.goodcore.co.uk\/services\/dedicated-development-team\/\"><span style=\"font-weight: 400;\">dedicated team model<\/span><\/a><span style=\"font-weight: 400;\"> is the perfect option.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5675 size-full\" src=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/STAFF-AUGMENTATION-Professionals-in-your-team.jpg\" alt=\"staff augmentation vs dedicated team\" width=\"1500\" height=\"906\" srcset=\"https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/STAFF-AUGMENTATION-Professionals-in-your-team.jpg 1500w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/STAFF-AUGMENTATION-Professionals-in-your-team-300x181.jpg 300w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/STAFF-AUGMENTATION-Professionals-in-your-team-1024x618.jpg 1024w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/STAFF-AUGMENTATION-Professionals-in-your-team-150x91.jpg 150w, https:\/\/www.goodcore.co.uk\/blog\/wp-content\/uploads\/2025\/02\/STAFF-AUGMENTATION-Professionals-in-your-team-768x464.jpg 768w\" sizes=\"(max-width: 1500px) 100vw, 1500px\" \/><\/p>\n<h2><span style=\"font-weight: 400;\">How to develop a software outsourcing strategy\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Does outsourcing sound like an appealing strategy for your business? Then it\u2019s time to formulate an outsourcing strategy.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Set and define goals<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The foundational part of your outsourcing strategy should be a set of well-defined goals that you want your outsourcing project to achieve.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Perhaps most importantly, think about what your software needs to do.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This means you won\u2019t be basing your search for vendors solely on price (which is an all-too common pitfall).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With a strong set of goals for your software, you\u2019ll have a clearer understanding of what tech stack, budget and timeline your vendor should be recommending.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Define tasks to be outsourced<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">What tasks do you want to outsource? If you\u2019re going to be undertaking some of the work in-house, this is particularly important so that you don\u2019t \u2018double up\u2019 and duplicate work.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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\u2019ll be responsible for.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Think of SRS as being the \u2018roadmap\u2019 that will guide the development process.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Define your tech profile<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is especially important if much of the project is going to be taking place remotely.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Define your tech stack<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Given the cost implications of things like cloud hosting, it\u2019s recommended that you give some thought as to what tech stack your new software is going to use.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You should also give some thought as to how \u2018bespoke\u2019 you want to go, or whether you are happy to use \u2018off-the-shelf\u2019 products etc.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Choose your outsourcing destination<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The cost differential. Labour costs in Latin America are considerably cheaper than the U.S.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proximity. Most Latin American countries are only a short flight from the Lower 48 of the U.S.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Time zone. There is generally minimal time zone difference between Latin American countries and geographically aligned states in the US.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Bear in mind, however, that you may want to mitigate differences in timezones\/communication etc.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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 &#8211; excellent, clear communication, cost savings and rapid delivery.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Choose your engagement model<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">As we mentioned earlier, there are a number of different outsourcing engagement models open to you.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Research potential vendors\/partners<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Once you\u2019ve determined your outsourcing strategy it\u2019s time to start shopping around and speaking to potential partner vendors.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As you\u2019re likely to find, however, there are numerous outsourcing development agencies to choose from. What\u2019s the best way to sort and filter through them?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are our top tips:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Check they have a proper registered address, registered company number, and VAT number.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Put a face to a name. Can you tell <\/span><a href=\"https:\/\/www.goodcore.co.uk\/company\/\"><span style=\"font-weight: 400;\">who runs the company<\/span><\/a><span style=\"font-weight: 400;\">? And, what their background is?\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Does the company have easily verifiable <\/span><a href=\"https:\/\/www.goodcore.co.uk\/cases\/\"><span style=\"font-weight: 400;\">case studies<\/span><\/a><span style=\"font-weight: 400;\">?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Does the company have <\/span><a href=\"https:\/\/clutch.co\/profile\/goodcore-software?utm_source=widget&amp;utm_medium=2&amp;utm_campaign=widget&amp;utm_content=logo&amp;utm_term=www.goodcore.co.uk#highlights\"><span style=\"font-weight: 400;\">online reviews<\/span><\/a><span style=\"font-weight: 400;\">?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Does the company provide details about the <\/span><a href=\"https:\/\/www.goodcore.co.uk\/services\/\"><span style=\"font-weight: 400;\">tech stack and programming languages<\/span><\/a><span style=\"font-weight: 400;\"> it uses?\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Is the company transparent about its <\/span><a href=\"https:\/\/www.goodcore.co.uk\/company\/pricing\/\"><span style=\"font-weight: 400;\">pricing models<\/span><\/a><span style=\"font-weight: 400;\">?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Does the company offer an <\/span><a href=\"https:\/\/www.goodcore.co.uk\/contact\/\"><span style=\"font-weight: 400;\">initial consultation<\/span><\/a><span style=\"font-weight: 400;\"> so you can discuss your software needs? <\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If a vendor ticks all these boxes, then there\u2019s a strong likelihood they will offer an excellent and dependable outsourcing experience.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Busting outsourcing myths<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Perhaps you\u2019re on the verge of outsourcing your software development project &#8211; but then someone in your team pops up and intercedes with an \u2018outsourcing myth\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Are these myths about outsourcing really justified?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s take a look at the most common outsourcing myths.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">\u201cOutsourcing is just about reducing costs\u201d<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Whilst one of the main motivating factors of outsourcing is to reduce costs &#8211; <\/span><i><span style=\"font-weight: 400;\">that\u2019s not the only reason to do so.\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">As we\u2019ve 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 <\/span><span style=\"font-weight: 400;\">full-time<\/span><span style=\"font-weight: 400;\"> employees.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outsourcing also allows you to access very niche <\/span><span style=\"font-weight: 400;\">skill sets<\/span><span style=\"font-weight: 400;\"> or knowledge domains that you wouldn\u2019t otherwise have the resources to hire.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Outsourcing also allows you to scale up and down your development capabilities without having to engage in costly hiring and retention activity.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s about more than just reducing costs!<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">\u201cOutsourcing increases costs\u201d<\/span><\/h3>\n<p><b>Wrong.<\/b><span style=\"font-weight: 400;\"> Whilst this is a counterintuitive suggestion, it\u2019s completely wrong to suggest that outsourcing reduces costs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In fact, as we\u2019ve (hopefully) made clear throughout this article, outsourcing allows you to avoid a whole plethora of costs &#8211; from fixed costs like equipment and building overheads &#8211; to flexible costs like software licences and employee fees.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">\u201cOutsourcing is the same as using freelancers\u201d<\/span><\/h3>\n<p><b>Wrong.<\/b><span style=\"font-weight: 400;\"> When you outsource your software development project to a company like GoodCore, you\u2019re getting more than just a developer. You\u2019re getting the support of a whole team of specialists &#8211; from QA testers to UI\/UX designers, and project managers to DevOps.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That\u2019s definitely far more than the type of support you get from a freelancer (or group of freelancers).\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Outsource your software development to GoodCore today<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you\u2019re looking for an expert team that can execute your software project on your behalf, then you\u2019ll not find anyone better than GoodCore.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Speak to our team now for a free consultation about your requirements, or alternatively, learn <\/span><span style=\"font-weight: 400;\">more about our <\/span><a href=\"https:\/\/www.goodcore.co.uk\/services\/outsourced-software-development\/\"><span style=\"font-weight: 400;\">outsourced software development resources<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">REFERENCES<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> McCarthy I, Anagnostou A. <\/span><i><span style=\"font-weight: 400;\">The impact of outsourcing on the transaction costs and boundaries of manufacturing <\/span><\/i><span style=\"font-weight: 400;\">[online]. Available at: <\/span><a href=\"https:\/\/www.sciencedirect.com\/science\/article\/abs\/pii\/S092552730300183X?via%3Dihub\"><span style=\"font-weight: 400;\">https:\/\/www.sciencedirect.com\/science\/article\/abs\/pii\/S092552730300183X?via%3Dihub<\/span><\/a><span style=\"font-weight: 400;\"> (Accessed on 23rd January 2025).\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> McCarthy I, Anagnostou A. <\/span><i><span style=\"font-weight: 400;\">The impact of outsourcing on the transaction costs and boundaries of manufacturing <\/span><\/i><span style=\"font-weight: 400;\">[online]. Available at: <\/span><a href=\"https:\/\/www.sciencedirect.com\/science\/article\/abs\/pii\/S092552730300183X?via%3Dihub\"><span style=\"font-weight: 400;\">https:\/\/www.sciencedirect.com\/science\/article\/abs\/pii\/S092552730300183X?via%3Dihub<\/span><\/a><span style=\"font-weight: 400;\"> (Accessed on 27th January 2025).\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Hirschheim R, Dibbern J. <\/span><i><span style=\"font-weight: 400;\">Information Systems Outsourcing in the New Economy &#8211; An Introduction <\/span><\/i><span style=\"font-weight: 400;\">[online]. Available at: <\/span><a href=\"https:\/\/link.springer.com\/chapter\/10.1007\/978-3-662-04754-5_1\"><span style=\"font-weight: 400;\">https:\/\/link.springer.com\/chapter\/10.1007\/978-3-662-04754-5_1<\/span><\/a><span style=\"font-weight: 400;\"> (Accessed on 29th January 2025).<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Mordor Intelligence. <\/span><i><span style=\"font-weight: 400;\">IT Outsourcing (ITO) Market Size, Share, Trends Analysis &amp; Statistics (2025-2030) <\/span><\/i><span style=\"font-weight: 400;\">[online]. Available at: <\/span><a href=\"https:\/\/www.mordorintelligence.com\/industry-reports\/it-outsourcing-market\"><span style=\"font-weight: 400;\">https:\/\/www.mordorintelligence.com\/industry-reports\/it-outsourcing-market<\/span><\/a><span style=\"font-weight: 400;\"> (Accessed on 29th January 2025).\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Butler E. <\/span><i><span style=\"font-weight: 400;\">Public Choice &#8211; A Primer <\/span><\/i><span style=\"font-weight: 400;\">[online]. Available at: <\/span><a href=\"https:\/\/iea.org.uk\/publications\/research\/public-choice-a-primer\"><span style=\"font-weight: 400;\">https:\/\/iea.org.uk\/publications\/research\/public-choice-a-primer<\/span><\/a><span style=\"font-weight: 400;\"> (Accessed on 29th January 2025).<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Ricardo D (1817). <\/span><i><span style=\"font-weight: 400;\">On the Principles of Political Economy and Taxation. <\/span><\/i><span style=\"font-weight: 400;\">Piero Sraffa (Ed.) Works and Correspondence of David Ricardo, Volume I, Cambridge University Press, 1951, p. 135.\u00a0<\/span><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re considering developing a new piece of software, the chances are you\u2019re 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 [&hellip;]<\/p>\n","protected":false},"author":23,"featured_media":5680,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[105],"tags":[],"class_list":{"0":"post-5657","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-software-outsourcing"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Definitive Guide to Software Development Outsourcing | GoodCore<\/title>\n<meta name=\"description\" content=\"Are you considering outsourcing the development of your software? Then it\u2019s essential that you read this detailed guide from the GoodCore team first.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.goodcore.co.uk\/blog\/software-development-outsourcing-guide\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Definitive Guide to Software Development Outsourcing | GoodCore\" \/>\n<meta property=\"og:description\" content=\"Are you considering outsourcing the development of your software? 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