Examination of the Pros and Cons in Software Development Outsourcing

In 2024, a business that lacks digital tools is inherently prone to failure in the market. Modern competition leaves no room for those who refuse to undergo digital transformation and provide top-notch UX to their audience. Such bias seems odd considering the opportunities and advantages of software outsourcing.

The outsourcing market is vast and encompasses a significant variety of work directions. For instance, you can find experienced developers to order mobile app development or outsourcing projects that need to be completed on time. Offshore software development, in particular, is the type of service utilized by businesses regardless of their scale or profile.

According to analysts at Global Market Insights, the custom software development market is projected to reach a value of $196.6 billion by 2032, indicating the increasing scale of working with an outsourcing partner.

Experts from Lampa Software will share with you the advantages and disadvantages of outsourcing, the peculiarities of this type of collaboration, and more.

What Is Outsourcing?

If you're unfamiliar with outsourcing and who outsourced software developers are, it's time to get acquainted with these concepts. Outsourcing development involves delegating IT projects to external providers. This model is popular not only among small business companies but also among giants like Google, Facebook, and Microsoft.

Outsourcing is also an excellent solution for many business owners who cannot afford to maintain an in-house development team or do not want to excessively burden their budget.

Outsource software development is your chance to get expert assistance without going through the recruitment process and managing team members in-house. You can hire talented developers from Eastern Europe and pay only for their working hours.

The key is to find specialists in a development company, your outsourcing partner, who can meet the needs of your development project.

Hiring Remote IT Specialists: Market Situation 

Let's talk about the drawbacks of outsourcing, specifically the situation in the job market. Korn Ferry analysts forecast that there will be over 85 million unfilled positions worldwide due to a lack of qualified talents by 2030.

As of 2023, based on ManpowerGroup data, the shortage of workforce in various industries has reached 77%. The list of professions lacking in the job market includes:

• Software engineering specialists.

• Artificial intelligence architects.

• Software product developers.

This shortage refers specifically to in-house software developers and development teams whose experts are simply absent in the job market. However, we understand where to find the masters of these scarce professions. For example, at outsourcing firms like Lampa Software, which serves as a service provider for business owners by conducting application development for them.

Next, let's delve deeper into assessing the situation and understanding the advantages and disadvantages of outsourcing for ecommerce and other business sectors.

Advantages of Outsourcing Software Development

Let's start with the positive aspects: the advantages of outsourcing software development. It should be noted that outsourcing can save you time and possibly finances and provide your business with high-quality software solutions.

But it's essential not to consider this model as a definite cure-all. Even if you're outsourcing, it doesn't mean the guaranteed success of your software projects in the target market. Outsourcing development is the execution of the client's project, but no more. The idea, concept, positioning, and even promotion fall within the product owner's responsibility.

As for the technical side of the issue, outsourcing provides the maximum capabilities of a team of developers. So, let's focus on the key advantages of the model.

Cost Factors

Answering the question "Which of the following is not an advantage of outsourcing?" confidently, it can be said that cost savings are not. Everything is quite simple: outsourcing allows saving globally but also comes with hidden costs.

However, this point is probably the most crucial among the benefits of outsourcing software development. Here's why:

• You don't spend on hiring and maintaining an in-house team.

• You pay only for working hours and results.

• You don't need to buy equipment or technologies.

• You can avoid self-supporting the product.

• You mitigate risks associated with schedule delays.

Moreover, you enter the market on time, can simultaneously develop multiple products, and address more business needs than possible with in-house implementation. Therefore, an outsourcing partner allows for reducing your costs and potential risks, enabling faster monetization of IT solutions. It's a 2-in-1 saving and profit.

Finding the Right Skill Set

If the question is about which of these is not an advantage of outsourcing, this point clearly doesn't fit. This is because only offshore outsourcing allows you to form a team that covers the project's needs.

There are several confirmations of this, such as:

• Most genuinely talented developers work with an outsourced team and a specific service provider.

• Experts not limited to an in-house technical stack have broader qualifications and more experience.

• An external software development team understands and focuses on core business needs.

• An external contractor can independently implement a mobile or web development project without issues.

• Every provider cares about its reputation and provides clients with only quality services.

You can always verify these advantages in practice by delegating your project to the Lampa Software team. And we move on.

Saving Time

In the offshoring pros and cons list, saving time for the company through remote development is an advantage. When you manually implement a product, you may face problems, schedule shifts, etc. Outsourcing allows flexible management of the development team, scaling it, and speeding up processes.

This allows you to deliver a digital solution to the target market on time and save time and money.

Additionally, outsourcing ensures high-quality IT solutions. You won't have to spend time and finances fixing issues at release, postponing product publication, and so on.

This covers the advantages. Next, let's talk about what is one drawback of outsourcing? More precisely, about the disadvantages of outsourcing in general and a few points that are somewhat conditionally referred to as drawbacks.

Potential Disadvantages of Outsourcing

We've left the positive part of the review of the advantage and disadvantages of outsourcing behind. Now, let's delve into potential problems that clients of offshore software development companies may encounter.

Some of these issues are related to differences in a time zone, team cultures, values, and approaches. However, readers may have some questions, such as which of these is not a disadvantage of outsourcing or whether this nuance is indeed a model drawback.

Regardless, let's continue examining the question of what are the disadvantages of outsourcing, starting with an evident drawback – communication.

Communication

If you're wondering which of the following is a disadvantage of outsourcing, communication is arguably one of the most critical issues in this collaboration model. Not only does the effectiveness of development depend on it, but both parties must also make efforts and smooth out rough edges.

There's also the concept of time zones and the geographical location of the executing team. In other words, with certain partners, you might be unable to simply reach out during the day and discuss the project's status. Sometimes, both collaboration parties need to find compromises regarding communication.

There's also reporting, risk management programs, remote team oversight, and the development process.

Company Morale

The corporate culture of the executing team can also become a disadvantage of outsourcing. Service providers may not be overly concerned with fostering employee interaction in a unified workspace.

This can translate into problems related to communication and the quality of services the outsourcing companies provide. For instance, if a company lacks a corporate culture, you might not be able to collaborate simply because such a subcontractor negatively impacts your team.

Moreover, if a provider solely focuses on its own enrichment, it might be less interested in whether the product aligns with your business goals or meets your needs. What you'll end up with is something you definitely won't appreciate.

Quality

Among the cons and pros of outsourcing, quality is one of the most painful for service clients. Indeed, it is often the primary factor that deters business representatives from delegating their projects to external companies.

If we were to choose "Which of the following is an important disadvantage of outsourcing?" without hesitation, we would point to quality. As of 2024, there are quite a few teams that have entered the development market but lack an understanding of commercial cooperation. We are referring to companies formed by enthusiasts from platforms like GitHub.

At this point, the list of software outsourcing pros and cons concludes, and we move on to practical recommendations for outsourcing your project.

Learn How to Use Software Outsourcing Services to Grow and Thrive

Outsourcing software development pros and cons should not be an obstacle for you with the right approach to finding partners. You need to hire a team whose reputation leaves no room for doubt. This way, will you receive services that help your business thrive.

Outsourcing development with teams like Lampa Software ensures timely completed projects with a level of quality that rivals products from IT corporations.

Find Your Partner Anywhere in the World

Pros and cons of outsourcing software development may raise doubts, especially if you have seen information about unsuccessful collaboration cases. However, no one forces you to seek overly cheap services in countries where the concepts of "corporate culture" and "quality of IT products" do not exist. There is always the option to collaborate with responsible teams in Eastern Europe, particularly in Ukraine, and reap maximum benefits.

If you need a reliable partner for developing a digital solution, delegate this task to the experts at Lampa Software.