Is Cost the only Reason to Outsource Software Development?

Reason to Outsource Software Development

By the end of 2021, the IT outsourcing market will surpass $413.72 billion. The growing demand for software solutions is leading to dramatic growth in outsourcing. Today, many companies outsource projects to a custom software development company to reap the benefits of high-quality products at a lower cost.

But is cost the only reason to outsource software development company? While it may be a significant factor, there are a lot of other things that play a major role in enabling companies to decide whether outsourcing for custom software development is a good idea or not. Since there is a high demand for digital software solutions and products, the outsourcing market is not just based on cost anymore.

From building products from scratch to re-engineering and maintenance of existing products, a software engineering company provides a wide variety of services. Companies that don’t have budget constraints also often outsource to a company that builds software products — and because of different reasons.

Let us explore these reasons in detail.

What are the reasons to outsource software development?

Companies that outsource know that it leads to more than 70% reduction in costs. However, that should not be the only reason to outsource. Many outsourcing companies charge similar to in-house teams, and yet companies prefer to hire them.

So why do they hire these companies if cost isn’t the only factor?Here are 7 reasons(apart from cost) to outsource custom software development-

1. Faster time-to-market

  • There are two ways to get faster products — you can either outsource the entire product to an outsourced team that delivers before the deadline or extend your team through outsourcing by hiring developers who complement your in-house teams.
  • When there are extra pairs of hands, it takes less time to build the product, and companies have more time-to-market it. If the idea is unique, it gives a first-mover advantage that companies can leverage to stay ahead of the competition.

2. Focus on core competence

  • The entire efforts of the startup or the enterprise can’t be focused on software development. There needs to be a focus on business development, strategy development, project management, and much more. If the entire business is involved in product development, other activities get hampered.
  • Outsourcing software development solutions let you focus on your core competence while the outsourcing partner takes care of your software product. You get more time to focus on activities that are important and get a team for support and maintenance when you launch the product — leading to better management.

3. Access to domain expertise

  • What if the product you want requires special domain expertise like FinTech or HealthTech? When you don’t have resources for that, what do you do? It’s a hassle to hire an engineer with specific domain expertise. To understand the new set of customer expectations, it is important to have an expert on board.
  • An outsourcing company has a host of domain expertise because they are already working with different partners on different projects. Their domain experts have the understanding, experience, and knowledge about products that you might want to build.

4. Pool of talent

  • Generally, a custom software development service provider will have a pool of talent that you can access and work with. More and more companies are outsourcing their talent requirements rather than hiring in-house developers. It saves them the trouble of finding resources that are not easily available.
  • For example, a Machine Learning company provides a pool of Machine Learning experts that you might not otherwise find. They have entire teams dedicated to particular technologies and industries. It simplifies the product development process and ensures you get the best resources on time.

5. Proven experience

  • One of the most significant reasons to outsource software development issues is because the company has the experience to solve them. Since they have been working for years and have a client base, you can be sure that they know the ins and outs of the products they build and the processes they follow.
  • If you don’t want to take the chance of hiring an inexperienced developer, then an outsourcing company is your best bet. It has experienced developers who may have been working with them for years and have built really amazing software solutions that you can look at and decide on their expertise.

6. Better flexibility & scaling

  • The outsource software development model gives the advantage of higher flexibility. There’s no need to hire developers on a full-time basis. You can just hire an outsourcing company that will deploy developers on your project. Once the project is complete, you can let them go without any hassle. They are on the payroll of the outsourcing company, so you don’t have to worry about paying them after the project.
  • What if you need to scale your existing application? If the outsourced developers are working on your project, you can ask the company to deploy more people. It can be done quickly and in a hassle-free manner.

7. High-quality product development

  • And finally, outsourcing software development now comes with the promise of high-quality products. The outsourcing companies have a reputation to maintain, so they can’t create average quality products. And since they want the clients to stay for a longer time, they will focus on building better digital solutions.
  • And as they provide web application development services, mobile app services, and other things — they have customers in various industries. So building a low-quality product or compromising on the quality might lead to destroying their reputation everywhere.


As we saw above, outsourcing to a software engineering company is not just about cost — businesses that are serious about rapid app development, quality, and access to a pool of talent will hire an outsourcing partner for their product needs. With the growing requirements of talented individuals and domain experts, outsourcing companies are coming to the forefront of software development. From support & maintenance to building new products, they offer everything that a company might need for the success of their software solutions.

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