How To Outsource Software Development: Full Guide

This guide will equip you with the knowledge you need to make informed decisions when outsourcing software development.

how to outsource software development effectively

Businesses can save time and money by using expertise from around the world instead of developing solutions in-house. Outsourcing software development has become increasingly popular. This approach offers high-quality results at a lower cost and quicker turnaround time. In this guide, we will explore the advantages, challenges, and key considerations involved in outsourcing app development.

Knowing how software outsourcing services can be a valuable asset for both startups and established companies aiming for innovative solutions.The projected revenue in the IT Outsourcing market is to reach US$460.10bn in 2023.


According to Statista By 2028, we anticipate the market volume to reach US$777.70bn with an annual growth rate of 11.07% (CAGR 2023-2028). Additionally, the projected average Spend per Employee in the market is US$132.10 in 2023.

Types of Software Development Outsourcing Services:

Software development outsourcing offers various options based on the location of the development company. These types include

Local Software Outsourcing

This type involves hiring a software development company located in your own city or vicinity. While it offers the advantage of convenient visits and face-to-face meetings, it can be expensive compared to other options.

Onshore Software Outsourcing

Onshore outsourcing refers to hiring a dedicated development team within your own country. This option provides benefits such as shared time zones and cultural compatibility. However, it may still come with a higher price tag than other alternatives.

Nearshore Software Outsourcing

Nearshore outsourcing involves hiring developers from a country near your own. This enables you to take advantage of similar time zones, making communication and collaboration more convenient. Compared to local and onshore options, nearshore outsourcing can be a relatively more cost-effective choice.

Offshore Software Outsourcing

Offshore outsourcing entails selecting a software development company located in a different country, often on a different continent and in a different time zone. The main advantage of this approach is the significant cost reduction it offers. Offshore outsourcing can be notably more affordable compared to local, onshore, or nearshore options.

How to Find the Right IT Outsourcing Partner?

After you outsource your software development project, you need to find the right talent to outsource. Below is a checklist to help you find the ideal IT outsourcing partner.

find right it partner

Be Clear With Your Requirements

Before choosing the outsourcing partner, you need to be clear about what your needs are. This includes the project scope, development method, client requirements, budget, and project timeline. Understanding the requirements will guide your search for the dedicated software developers. Without a clear understanding of these factors, you may struggle to find the best match for your project.

Expertise And Experience Matter

The industry expertise and years of experience when choosing your ideal outsourcing partner is the crucial thing. If they don’t have prior industry expertise in app development, it’s hard to learn and understand the needs and the audience.

Dig Some Checks With Their Market Reputations

Before choosing the right team for outsourcing software development, you need to check their history in the industry. Was their work completed on schedule?

How impressive were the projects they completed before? Have they maintained positive relationships with clients? You should thoroughly check these before hiring them.

Are They Timezone Friendly?

Even how good the development team is, Are they matching your work time zone? That will affect connection and communication. It’s important to ensure that your outsourced team is available during compatible time zones.

Team Communication

Encourage regular and transparent communication channels among team members and with the clients. Use various tools like project management software, email, and instant messaging to boost effective communication.

Clear Budget Discussion

Start clear and detailed discussions about the project budget. Ensure everyone understands the financial importance of the project, including resource allocation, expenses, and planning. Regularly monitor the budget throughout the project lifecycle.

Privacy And Data Security

Prioritize privacy and data security to protect sensitive information. Implement robust security measures such as encryption, and access controls. Stick to industry standards and keep rules to ensure Protecting sensitive information.

Agile Software Development Methodology 

Consider adopting Agile methodology for software development. This approach emphasises smooth development, continuous feedback, and adaptation. It promotes frequent communication, collaboration, and flexibility, enabling quicker and more efficient delivery.

Choose An IT Partner 

When selecting an IT partner, prioritize flexibility and good planning ability. Look for a partner experienced in your industry that understands your requirements and can adapt to changing circumstances. Consider their track record, portfolio, and customer reviews to ensure they fit your project well.

Mitigating Risks In Outsourcing Software Development:

It’s important to know how to mitigate the risk. This will help you get the desired results. There are some things you need to consider while ready to face the risk and secure yourself. Here’s how.

Conduct Thorough Due Diligence 

Before outsourcing any task or process, it is essential to thoroughly research and screen potential outsourcing partners. This includes reviewing their reputation, experience, security measures, and track record with past clients. It ensures that you choose a reliable and trustworthy partner who will mitigate risks effectively.

Establish Clear Expectations 

Clearly defining your requirements and expectations are crucial for successful outsourcing. This includes outlining project scope, timelines, quality standards, and KPIs. By setting clear expectations from the outset, you can mitigate risks associated with misconceptions.

Implement Robust Contracts 

Outsourcing involves risks that can be managed with contracts. To create a contract, it’s best to work with legal professionals. The contract must clearly outline the rights, responsibilities, and obligations of both parties. It should also include provisions for SLAs, NDA, IP rights, dispute resolution, and termination clauses.

Maintain Effective Communication 

Regular and open communication is essential for successful outsourcing. Establish a communication plan that includes regular status updates, progress reports, and scheduled meetings or conference calls. It helps identify and address any issues or concerns promptly, reducing the chances of risks.

Monitor Performance And Manage Risks Proactively 

Implement strong monitoring and risk management to identify and address potential risks in outsourcing. Regularly assess and evaluate the performance of your outsourcing partner against agreed-upon KPIs and SLAs. Monitor key risk indicators and take proactive measures to mitigate risks before they become significant problems.

When to Outsource Software Development?

There are some signs, you may come across when you outsourced. Outsourcing is one of the better, risk-free options to overcome multiple situations usually happening in IT companies.

when to outsource it project

Saving cost: when your budget gets tighter!

This is the most apparent reason for us to outsource software development. Choosing the more cost-effective option is a no-brainer. Hiring in-house staff can come with a large price tag. If you needed resources for a short time, this will not be a help.

When starting a new project, we usually have to spend more on app development. Outsourcing can solve these issues. Outsourcing an app development team usually costs significantly less, you can spend less and focus on other works with ease.

To Keep Up With The Demand

When the demand increases, in-house employees can’t keep up with all app development needs. You need to develop and deliver efficiently without flaws. In those times, we definitely need to outsource software development projects to keep up with the demand while maintaining your goodwill. Outsourcing your project will help you a lot. 

When You Can’t Find The Right Talent!

This is one of the main reasons. To make sure your project is successful, it’s vital to find the right technology and experts. This will help you achieve your goals and complete the job effectively. This will greatly improve the end result.

It is easy to hire software developers when we are unable to find the right talent. With the same industrial knowledge as Outsourcing service providers like Soft Suave.

Minimal In-House Employees Doing Multiple Roles

In SMBs, you can find employees doing multiple roles and end up not giving the fullest in the work. This will affect both the work environment and the risk of using the talents.

Those small businesses can’t afford to employ staff. In that case, Outsourcing will help you. Because it is cost-effective and you can hire them for only needed projects will give more effective results than expected.

Structuring Successful IT Outsourcing:

The structuring of how you hire the developers, based on the project and its nature is important. Here are the steps to make effective structuring.

structuring successful outsourcing

Step 1: Reaching out

  • Request Submission: Submit a request on our website.
  • Assign Personal Manager: Our Business Development Department assigns a personal manager within 24 hours.
  • NDA: We are ready to sign a non-disclosure agreement upon request.

Step 2: Design Solution Stage

  • App Discussion: Connect with you to discuss the essential aspects of your project.
  • Team Meeting: Arrange a meeting with our solution team comprising solution architects, business analysts, and designers.
  • Scope of Work: Define the general scope of work, business goals, primary concerns, and necessary attributes.
  • Clarification: we may propose Additional calls to clarify details.
  • Estimate and Timelines: Provide a rough estimate and approximate timelines.
  • Duration: We need to discuss the time duration they needed for developing the app.

Step 3: Finding the Stage

  • Concept to Plan: Transform your concepts into a structured plan.
  • Identify Key Aspects: Identify functional and visual aspects of your project.
  • Essential Data Gathering: Gather essential data for the project team, including estimates, sprint specifications, and wireframes.

Step 4: Software Development And QA

  • Development Phase: Focus on building the app architecture and creating a solution that meets your requirements.
  • Collaboration: Collaborate with specialists in various areas such as iOS/Android or web developers.
  • Agile Development: Implement development process in sprints.
  • Project Manager Oversight: Project Manager oversees every step, noting changes and improvements.
  • QA Testing: QA engineers thoroughly test the product’s functionality and perform stress testing.
  • Issue Resolve: Fix identified issues and verify the solution’s proper functioning.

Step 5: Release

  • Product Launch: Launch the product on marketplaces with help from outsourced software development service providers.
  • Final Testing: Conduct final testing for product stability and address any issues promptly.
  • Project material: Provide necessary project materials, including design files, specifications, source code, and credentials.

Step 6: Support And Maintenance

  • Ongoing Support: Provide ongoing support and maintenance for your developed app.
  • Continuous Improvement: Enhance the UX and keep the product up to date through continuous improvement.

Managing Outsourced Teams

The management is one of the hidden agenda for successful output. If the management is messed-up, the whole project is a mess up. Here are the things you should consider while managing the teams.

Effective Communication 

Show effective communication channels with your team to provide smooth collaboration. Use project management tools, video conferencing, and regular meetings to keep everyone on the same page. Clearly communicate project goals, expectations, and timelines.

Build Strong Working Relationship

Promote a positive working relationship with your outsourced team by treating them as an extension of your in-house team. Provide regular feedback, recognize their contributions, and show a sense of trust and fellowship.

Assign Project Manager

Assign a dedicated project manager who will act as the bridge between your in-house team and the outsourced team. This person should oversee the entire project, tasks, resolving conflicts, and ensuring effective communication.

Cost Considerations and ROI:

Cost determines the value of the project and its ROI determines the success of the project. It is important when to discuss this before hiring.

Determine The Budget 

Define a clear budget for your outsourced software development project. Consider factors such as development costs, maintenance costs, licensing fees, and any additional expenses.

Compare Outsourcing Options 

Compare outsourcing options based on their costs, like hourly rates, fixed-price contracts, or dedicated team models. Research to find the best one for you. Consider the pros and cons of each option and choose the one that aligns with your budget and project requirements.

Assess Long-Term Cost Benefits 

While outsourcing may initially seem cost-effective, it’s essential to consider the long-term cost benefits and ROI. To determine cost savings, consider reduced overheads, lower labor costs, access to expertise, and faster time-to-market.

Perform Due Diligence 

When outsourcing work, it’s crucial to find a reliable partner. Research and ensure that they are transparent about their pricing, contract terms, and any additional fees or hidden costs. Be thorough in your investigation before making a final decision. Get legal advice to review and arrange contracts to protect your financial interests.

Track And Measure ROI

Always track and measure the ROI of your outsourced software development project. Assess the impact on your business objectives, cost savings advances in efficiency, customer satisfaction, and others. Use this data for decision-making in future outsourcing endeavors.

Handling Intellectual Property:

This is one of the sensitive matters to deal with. When it comes to IP, we need to be careful with the agreements and other legal papers. here’s how you can do it.

handling intellectual property

IP Protection Measures: 

Clearly define IP ownership and protection measures in your contractual agreement with the outsourcing partner. Include clauses that secure your rights over the software, code, designs, and any other intellectual property developed during the project.

Non-Disclosure Agreements: 

Require your outsourcing partner and team members to sign NDAs to protect your confidential data and trade secrets. Ensure these agreements clearly outline the project, duties, and fines for breaching NDA.

Establish Data Security And NDA Protocols: 

To keep sensitive information safe during software development, it’s important to use strong data security measures. This involves secure data storage, encrypted communication channels, restricted system access, and following data protection regulations.

Conduct Regular IP audits: 

To protect your intellectual property during software development, it’s important to regularly check and monitor it. Review the codebase, documentation, and other project materials to make sure they comply with IP protection measures.

Consult Legal Experts: 

Get legal advice from intellectual property lawyers experienced in software development services. They can help review and negotiate contracts, provide guidance on IP protection, and enforce legal remedies in case of IP infringement.

Smooth Transition And Onboarding:

When on-boarding after all those procedures, we have to be sure of everything’s ready and going with the plan. here’s how you can do it.

Prepare Transition Plan

Create a detailed transition plan that outlines the steps and timeline for transferring the project to the outsourced team. Clearly define roles, responsibilities, and expectations during the transition process.

Document Knowledge Transfer 

To make sure the team you’ve outsourced understands the project, it’s important to document all project information. This includes project documents, codebase, design specifications, and any other necessary resources.

Conduct Effective Onboarding 

Develop an onboarding process to help the outsourced team integrate seamlessly into the project. Assign a mentor or a buddy to assist them during the initial stages. Provide access to necessary tools, software environments, and systems for them to work efficiently.

Encourage Collaboration

Foster collaboration between the in-house and outsourced teams. Facilitate regular meetings, video conferences, or scrum sessions to encourage open communication, information sharing, and knowledge exchange. Use collaboration tools to facilitate real-time collaboration and document sharing.

Monitor Progress Closely 

During the transition period, it’s important to keep an eye on the outsourced team’s progress. To make sure they’re meeting the project goals and timelines. Offer necessary support and guidance, address any challenges promptly, and provide feedback to foster a collaborative and productive work environment.

Conduct Regular Reviews 

To ensure a successful transition, it’s important to regularly review the outsourced team’s performance and give them feedback. During these sessions, focus on providing constructive guidance for improvement and addressing any issues or concerns that may arise.s well as address any issues or concerns that may arise.

Ensuring Quality and Timely Delivery

The quality of the product and on-time delivery earn the trust and boost brand value. Here are the things to consider for delivering a quality product on time.

Clear Quality Standards 

Clearly define the quality expectations for the software development project. Include specific standards for usability, performance, security, and any other relevant metrics. Provide your outsourcing partner with examples, guidelines, and QA processes to follow.

Set Practical Timelines 

Collaborate with your external team to create reasonable project timelines. That takes into account the project’s complexity, the resources, and any possible risks or difficulties. Regularly track and monitor progress against these timelines to ensure timely delivery.

Conduct Regular Testing And Quality Assurance

Implement a thorough QA testing process entire the Software development life cycle. This should include unit testing, integration testing, system testing, and user acceptance testing. Identify and address any issues or bugs as early as possible to prevent delays in delivery.

Continuous Communication And Feedback 

Regularly communicate with your outsourced team to provide feedback on the progress and quality of their work. Encourage open communication channels for reporting and managing any concerns or issues promptly.

Implement Agile Methodologies 

Consider adopting agile project management methodologies, such as Scrum in SDLC or Kanban, frequent inspection, and adaptation. Agile methodologies promote collaboration, flexibility, and faster delivery of incremental features.


Outsourcing software development can be a significant change for businesses striving for cost-effective and innovative solutions. Hope this guide provides you with the tools to navigate outsourcing.

Whether you’re a startup or an SMB, knowing how to outsource software development effectively can open up new opportunities for growth. If you ever want to develop an app through outsourcing or need resources, find the best IT outsourcing company like Soft Suave. A one-stop solution for all your IT needs. Outsourcing can be risky, but this will help you achieve more when you need a resource

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Frequently Asked Questions (FAQ)

Outsourcing software development can be a valuable investment for businesses. It can provide a cost-effective solution, access to expertise, increased efficiency, and improved quality.

When you outsource software development, you can save money, and access a worldwide talent pool. Benefit from expert technical knowledge, speed up time-to-market, and increase, and concentrate on your main strengths.

Yes, Soft Suave offers outsourcing services for both web and mobile app development. Our team of skilled developers can help you build custom web and mobile applications that meet your specific business requirements.

Outsourcing allows businesses to access expertise and talent from around the world, reducing the need for expensive in-house teams. It also enables businesses to reduce costs and save time, allowing them to focus on their core competencies.