Advantages and Disadvantages of Outsourcing Software Development

More focus on your core business

Let's say your business is in manufacturing or the pharma industry - your core business focus is to produce components/products or develop the best drugs. Chances are your business doesn't have a highly experienced software development team that can handle complex projects, and that's ok because this shouldn't be your focus to begin with. Outsourcing software development can help you relieve the burden of non-core tasks and use experienced external teams to deliver the software products and solutions, allowing you to focus on what you do best.

Better overall costs

Let's say your company is based in the US or the UK. Building your software development team/department will be costly and time-consuming, as they will need time to function as a well-oiled team. Outsourcing opens a world of opportunities, as you're not constrained to your geographic space. Based on your budget, you can outsource to countries such as China or India for the best prices or Eastern Europe for a good balance between costs and quality.

Another thing to consider when talking about costs is that when you're managing your internal team, it's not all about their fees/salaries but also the costs of the required infrastructure, computers, networks, office space, benefits, insurance, and much, much more. When outsourcing, your company of choice is responsible for all of that. This is particularly important if your company doesn't need constant software development work, so creating an internal team has little justification.

Access to a large pool of talents

With so many programming languages and technological innovations happening at a dizzying speed, finding the right talent for your precise set of requirements can become challenging - based on industry, project requirements, and more. In many cases, finding a specific position in your area or country is difficult due to lower popularity or context.

Outsourcing software development removes this constraint because the entire globe becomes your talent pool—you can employ anyone regardless of their geographical location, thus finding the best talent for your needs.

Speed to market

An internal development team would most likely manage multiple projects at once, thus potentially creating delivery delays. With outsourcing, you can find companies that will dedicate an entire team to your project, speeding up the development time and, ultimately, the time to market. Another thing to consider is the time zone differences of your outsourced software development company or companies—in specific scenarios based on your location and theirs; it could lead to almost round-the-clock, 24/7 development.

Risk management

It's one thing to bear all the risks and the implied costs and another to share that risk and responsibility with another company, especially if they have extensive experience in software development. This way, you and your company can have a better risk management strategy and put safeguards together with your partner of choice.

Better team chemistry

This might be often ignored, but the truth is that a team that has good working relationships and experience working together will deliver better and faster than one without. If you consider creating your internal team, you need to think that they will be at their best as a team in the long run - so if your project is critical or urgent, it might not be the best idea. On the other hand, many software development outsourcing companies have people working together for years so that you can tap into that "team chemistry" for your project's success.