Insights | Advantages and Disadvantages of Outsourcing Software Development

Advantages and Disadvantages of Outsourcing Software Development

By Rich Wanden | July 15, 2020

Outsourcing is already a popular practice among the biggest names in software, with many offshoring a substantial portion of their operations. Now, smaller developers are doing the same – and other companies around the world are catching on.

The IT outsourcing market in the US is predicted to be worth $132.9 billion in 2020, and growing. What motivates companies to consider outsourcing as part of their business model? Additional capacity, executing on larger business goals, saving money, and accessing skills not available in-house.

However, there are plenty of challenges and potential pitfalls if outsourcing partnerships are not effectively integrated, leading to low employee morale, poorly written code, missed deliverables, and, ultimately, a low return on your investment.

Let’s take a look at the advantages and disadvantages of outsourcing software development, and discuss why Accelerance’s services are the best in the business when it comes to effectively leveraging an outsourced partnership. 

 

Advantages of Outsourcing Software Development

 

Cost factors

Although cost is no longer the leading driver for most organizations to consider outsourcing software development, cost savings are certainly an expected outcome. The average rate for an engineer is far lower in Latin America, Eastern Europe or Asia than in the United States, the UK or Australia. 

The Accelerance advantage: We work with developers worldwide.Our certified partners must meet more than 200 criteria to become part of the Accelerance global network, so you can be assured of quality work.

Finding the right skill set

Due to domestic talent shortages in the US, Western Europe, and Australia, outsourcing allows companies to fill gaps in their teams without having to sacrifice quality by settling for developers with less experience or expertise. It also allows organizations to leverage fractional skill sets they may not have the ability or need to hire full time. 

The Accelerance advantage: Identifying the right talent can be frustrating, with some companies struggling to attract applicants, let alone hire them. We work with more than 30,000 software engineers in 40 countries across the world, so you’ll always be able to find qualified developers for any project, large or small.

Saving time

Finding and interviewing candidates, negotiating compensation and onboarding a new employee takes time – only for some to leave a year or two later for a new opportunity. Working with an outsourcing partner allows you to delegate a lot of the recruitment process, enabling tech leaders to allocate their time and energy to more high-value initiatives for the company. 

The Accelerance advantage: We do all the legwork to vet developers, so you can focus on your business. Outsourcing shouldn’t create more work for you – it should make custom software development easier.

Potential Disadvantages of Outsourcing

Communication

Outsourcing can run into problems if there is a cultural misalignment with the partner company and/or the development team has poor English skills. Time-zone differences where there is limited workday overlap can also lead to a breakdown in communication when expectations are not appropriately set. In-house project managers who are responsible for an outsourced team can help with that, and well-aligned partners are used to managing the challenges of working across time zones.

The Accelerance advantage: Communication issues can kill a project. Accelerance ensures all certified partners speak fluent English and are culturally aligned to work with Western companies.

Company morale

The vast majority of the time, outsourcing is not designed to replace in-house employees but is used in parallel with ramping up headcount internally. However, some staff may view outsourcing as a threat to their role within the organization, which can lead to a decrease in productivity and reluctance to integrate an outsourced partner into the team. Clear communication from leadership and management is essential in outlining the role outsourcing will play and how it will impact individual team members.

The Accelerance advantage: We view outsourcing as a means to accelerate development, not replace existing hard-working employees. Thanks to competitive rates – often lower than boutique domestic outsourcing firms – you can add more capacity without significant increases in overhead. We also coach leadership on how to communicate the benefits of outsourcing and create buy-in from internal teams. 

Quality

Concerns over code quality are valid. A lot of dev shops around the world hire low-level talent ill-equipped to work with clients, or pitch an “A team” then transfer the project a few months later to less experienced developers (a strategy known as “bait and switch”).

The Accelerance advantage: All the certified partners in our global network have a proven track record and scalable practices in place to maintain the high quality of their work and resources.


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