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Hidden Truths About Software Outsourcing

Software outsourcing has become a big tool for companies due to development costs and the ability to connect with a number of external IT talents. This allows a business to continually change and update their technology while not hindering any other aspects of their company.

The problem here lies with the fact that this outsourcing is often not reliable. From cultural differences found in different parts of the world to companies saying they can do something when they actually cannot.

Whether a good or bad one, everybody has their own experience with software outsourcing. Whether you are familiar with the process or just now testing the waters, there are a few things you need to know.

Truth #1: Communication is not Difficult

One way of thinking that a lot of companies have about outsourcing is that communicating with outsourced workers is made more difficult because they aren’t close by.

This is simply not true. Communication is challenging regardless of location or differences in culture so long as there is no language barrier. And if anything, there is more communication happening with outsourced workers.

The truth is, communication only becomes more difficult with more people rather than relative proximity. In these situations, you must utilize management techniques that facilitate communication. You can also use tools like Asana and Monday to provide more effective and efficient communication amongst large groups. These tools help you align expectations and organize work with your outsourced workers.

Brooks’ Law - Line of Communication. Source [1]

Establishing a set mode of communication to help avoid any confusion or missed updates. And, some might say that an awesome product is often built by a small group of people. Thus, start working with a “small-enough” team of outsourced engineers to reduce the degree of complexity in communication.

Truth #2: Outsourcing Helps You Avoid Hidden Costs

Outsourcing is actually the less expensive way of maintaining, updating, and developing software. When you choose to outsource your software talent, you actually avoid common hidden costs you would otherwise see.

Seeking local talent for software development comes with a high premium due to the lack of competition. However, for outsourcing, competition actually lowers prices instead of raises them. With a wide choice of vendors, companies are competing with each other so they must offer the lowest prices for their services without sacrificing quality to remain competitive.

By outsourcing, you not only lessen the price of services rendered, but you also remove hidden overhead expenses. When you outsource to remote workers, you don’t have to pay rent for an office building, furnishing the office, general maintenance, or workstations.

All of these factors lower the overall cost of outsourcing compared to hiring new talent or hiring local consultants. This also allows you to get customized software for your business at a lower price so you do not have to settle for a generic solution that could cause problems in the future.

Moreover, if flexibility and time-to-market play a critical role, outsourcing is the optimal solution for a quick and temporary force of experts without incurring the long-term costs of establishing in-house workforce. Especially during the crisis time, the cost of opportunity can be tremendous and, in the worst case, leading to losing competitive advantages [2].

Benefits of Outsourcing. Source [3]

Truth #3: Outsourcing does not mean Low-Quality

While there is some research to be done when it comes to outsourcing software development, with proper planning and expectations it makes for a great option.

Yes, there are some companies that will take on a project they aren’t able to do just for the money. However, these same issues can happen with any company, whether they’re local or not. So, if you take responsibility and do some research beforehand, you can protect yourself from these companies.

One way to learn more about a company is to simply ask them. You have the right to ask to see previous projects they have completed. Even if they aren’t allowed to share specific work for other clients, reputable companies will more than likely have a demo they can show you.

Nonetheless, a study by Harvard Business Review [4] shows that remote workers actually are more efficient than traditional employees. Giving them more responsibility and letting them work in the most comfortable atmosphere increases productivity. In the similar context of working with an offshore engineering team, with the right mindset, processes and tools, the quality of software product is deterministic. In this regard, the models of a dedicated engineering team and staff augmentation shines most in ensuring a software product meets its expected quality while preserving the goodness of outsourcing [5].

Staff augmentation and Dedicated Team. Adapted from Source [5].


Outsourcing software development isn’t always a bad thing. In fact, it usually helps businesses succeed when optimally employed.

When choosing to outsource, you always want to do a little digging to make sure you are working with a reputable company that has proven track records and compatible management styles. In doing so, you will be protecting yourself and your entire business from wasted time and money.

Once you have found a good company, establishing a specific channel of communication and using this to discuss the software as well as what you want or need from it is one the best ways to make sure you are getting a quality product.


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