Two software developers high-fiving over a successful project in a vibrant, illustrated office environment.

Historically, large companies had a significant advantage over smaller ones because they could afford to spend large budgets on digital transformation early on or employ large software development teams for their projects. With time, things have changed, and due to software development outsourcing, medium and small businesses can stay competitive due to its advantages. Let's dive into the advantages and disadvantages of outsourcing software development without further ado.

But first, what is outsourcing software development?

Outsourcing software development might sound sophisticated or mysterious, but it's a common and widely accepted practice in businesses of all sizes and industries. It simply means employing another company to develop a part or an entire software development project on your behalf.

Advantages 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.

A group of software developers discussing over monitors in a light-filled office, with a focus on teamwork and satisfaction.

Better Flexibility

It should be fine if your project needs downscaling or upscaling with outsourcing, as you can always give up or request more resources. With an internal team, things get complicated, as laying off staff is complex, and hiring a new one is often resource-intensive.

Disadvantages of Outsourcing Software Development

Communication challenges

Depending on your outsourcing partner, some potential communication challenges can arise. The most common one is language, which could be easily overcome as more and more countries have skilled English speakers. For example, all of our team members at Ontegra are highly proficient in English. Another potential challenge might be cultural differences. Still, Eastern European countries share a similar culture to the US and Western Europe, so countries like Romania are ideal for cultural similarity.

Security and confidentiality

Firstly, we encourage you to sign NDAs with any partner. This way, you will ensure they adhere to your confidentiality standards. In terms of security, we're talking about data security—we encourage you to ask from the beginning what their data security protocols are and how they manage to ensure that data is strictly processed and stored.

Hidden Costs

Sadly, we have seen cases where outsourcing companies are not very transparent and haven't communicated the whole picture regarding costs. This often happens when the offer appears too good to be true, so stay away from those. The best way to avoid this is to discuss and ensure your partner is transparent; if you don't understand, ask and don't sign an agreement until everything is clear. At Ontegra, one of our core values is transparency - you know exactly how much the project will be worth and what our progress will be in real time.

Quality Control

If delivering the highest possible quality is crucial for you, we encourage you to find software development outsourcing partners that share similar standards and practices or adhere to standards you recognize. Do your research and ask them about their quality assurance policies in the interview. We also recommend having a member of your team oversee the collaboration so that he can intervene if needed.

Risk of failure

The risk of failure is always possible, and you need to consider it from the beginning. Of course, choosing the right partner for you will significantly minimize this, but you must ensure that you and your partner perfectly understand what needs to be delivered. We also encourage you to read all contracts beforehand and ensure safety measures are in place for any worst-case scenario.

Lack of focus

Some outsourcing software development companies manage multiple projects with the same team, so they might not have the proper focus for your project. Ensure they have a single team to manage your project, or if they do, discuss the priority of your project before making any agreement.


Outsourcing software development has pros and cons, but it's hard to tell which are more important because every company is different. Is cost efficiency the most important thing to you, or is it the quality of the delivered products? That's for you to decide. Our objective was to equip you with the correct information so you can correctly assess whether your software development project should be developed in-house or outsourced.

At Ontegra, we have complete experience developing complex software development projects from scratch in many industries, including pharma, manufacturing, construction, retail, automotive, and more. Our teams are all highly proficient in English, comprising 80% senior developers and 20% junior developers. This way, we can ensure a high quality of our deliverables and include new, exciting talent in the team. If you have any questions or want to discuss your new software development project, message us.

Article written by Iulia Filimon, NLP Engineer

Iulia designs and develops algorithms and models that enable computers to understand, interpret, and generate human language. She participates in building the first innovative AI company's solutions and exposing them to clients.