How to Know if You Need Software Outsourcing?

February 28, 2022

How to Know if You Need Software Outsourcing

We get it. You’re a startup, and you want to do everything in-house. But as your company grows, you’re going to need to start delegating some tasks to other people or businesses.

This is a time you should consider software outsourcing.

What does software development outsourcing mean?

Before we can fully define what software development outsourcing means, you have to know what software development entails. In short, it’s the process of designing, creating, deploying, and maintaining software applications.

Outsourcing, at its core, is the practice of delegating tasks to a third-party provider. When it comes to software development, this third party can either be an individual contractor or an offshore development team.

When you outsource software development, you are essentially hiring somebody else to handle developing the graphical user interface, coding, testing, and bug fixing, etc. Essentially, the process of transforming data into an operational program and making sure it runs smoothly.

Upon learning what’s done in outsourcing the software development process, you might be wondering when is the right time to get this type of work for your startup. Don’t fret; we’ve got you covered!

Startechup SaaS service

The 11 Signs that You Need to Outsource Software Development

As a startup owner, you want to avoid growing pains as much as possible. It was found in the feasibility study conducted by Startup Genome that 90% of startups fail.

On the bright side, 10% of startups become successful each year. The key is to recognize the gaps in your business processes so you can take the necessary steps to avoid pitfalls that might jeopardize the success of your startup.

Now, outsourcing software development may seem like a risky move. But if you’re experiencing any of the following signs, it’s definitely time to start looking for a software development partner:

1. An Overworked In-House IT Team

If your IT in-house team is already working long hours to keep up with the current demand, then it might be time to get a set of extra hands to help them out.

As much as possible, you don’t want to stretch your employees thin by piling up their responsibilities. This will only lead to them feeling burnt out, which could result in a decrease in productivity and overall work quality.

project manager

When your IT staff is overworked, they won’t be able to focus on developing innovative solutions that can help your business grow. Worse is they will feel burnt out. They’ll only be focused on meeting deadlines and putting out fires, which is only sustainable in the short run.

Once you see a decline in their output quality, take it as a sign to outsource software development tasks to an offshore team or individual contractor. They can help ease the workload of your in-house IT team so they can focus on your core business activities, which leads us to the next sign.

2. Lack of Focus on Business-Critical Activities

The first few years of a startup are crucial as it’s the time when you need to establish your foothold in the market.

software outsourcing quote

You need to focus on business development activities that will help you acquire new customers and partners. Unfortunately, if your in-house IT team is bogged down with the day-to-day maintenance of your existing software applications, they won’t be able to focus on these business-critical tasks.

Fortunately, the answer to your software development needs is right within your reach. Software development outsourcing companies can free up your in-house team’s time so they can focus on growing your business.

As for you, the startup founder, you can use this opportunity to focus on your vision and mission. You can also use this time to network and build relationships with other industry players.

3. You Need More Skilled Developers

Even if your in-house IT team has a couple of developers, they still need to be equipped to handle all the software project development tasks that come their way.

There will be times when you’ll need specific skill sets that your team doesn’t have. For instance, if you’re planning to develop a mobile app, you’ll need developers who are skilled in iOS and Android app development.

software developer working

The same goes for web development. If you’re planning to build a new website or buff up your existing one, you’ll need developers who are experienced in using the latest web development technologies.

In today’s competitive market, if you’re not using cutting-edge technology, you’re falling behind. This is where the outsourcing market becomes helpful.

There are hundreds of thousands of IT outsourcing firms all over the world. With the vast pool of talent to choose from, you’re sure to find the right team or individual that can help you with your specific development needs.

4. Your Budget is Limited

If your current development team is costing you more money than they’re worth, then it’s time to outsource.

One of the great benefits of working with a remote tech team is that you only pay for the services that you need. You’re not on the hook for employee benefits, overhead costs, or other ancillary expenses.

As mentioned, there is a global market for software developers. It takes place in different ways, and you can choose a team based on location.

globe on desk

Here are the types of cost-effective outsourcing you can choose from:


Onshore software development outsourcing means working with a team or individual within your country or in the same region. This type of outsourcing makes outsourcing more effective as there are no language barriers, time zone differences, or culture gaps.

However, onshore outsourcing can be more expensive than other types of outsourcing as you’ll have to pay for the same wages as your in-house employees.


Nearshore outsourcing services are provided by developers in neighboring countries. The most popular nearshore destinations are in Central and South America, as well as Eastern Europe.

The main advantage of nearshore outsourcing is that it’s more affordable than onshore outsourcing. Wages in these regions are lower than in Western countries, so you’ll be able to save on costs.

However, there may be some communication barriers as there will be a time zone difference. There may also be cultural differences that you’ll need to overcome.

software outsourcing services quote


Offshore software development outsourcing means working with a team or individual from another country. This type of outsourcing is usually done to take advantage of the cheaper labor rates in other countries.

Asia and Eastern Europe are the most popular offshore outsourcing destinations. It’s where you can find affordable software outsourcing services with the same quality as you can get from onshore and nearshore teams!

The challenges when working with an offshore team, however, are the time zone difference and language barrier. You’ll need to have patience when communicating with your team, as there may be a delay in responses.


Sometimes known as multisourcing, this type of outsourcing is defined as using various location-based outsourcing engagements from multiple providers simultaneously.

Large corporations and enterprises use multisource outsourcing as it allows them to tap into the best talent from around the world. It also ensures that they get the best among the best.

Since you’ll be working with more than one outsourcing partner, expect the cost to be higher. You’ll also need to have a clear idea of what you want and how you want it done, as there will be more cooks in the kitchen, so to speak.

Simply put, the farther the software development outsourcing company, the more money you save!

man looking at time

5. You’re Missing Deadlines

If your in-house development staff is constantly missing deadlines, then it might be time to outsource.

The time it takes to develop software is highly dependent on the skills and experience of your team. If you’re working with a team of novice developers, expect that it will take them longer to complete.

Oftentimes, the main reason why in-house teams miss deadlines is because of poor project management. One way to solve this is by working with a remote team, as they usually have better project management skills.

Working with an outsourced team can help you meet deadlines since you’ll have a staff working on the clock. You can also take advantage of the different time zones to have a team working on your project 24/7!

According to a survey conducted by GoodFirms, a company that is attuned to deliver custom software development services takes about an average time of 4.5 months to finish. They take this time to deliver high-quality and bug-free software.

It’s another plus that these software outsourcing companies hold themselves accountable to meet the deadlines they commit to. They do this because it’s part of their business model, and they want to keep you as a satisfied customer!

outsourcing company

6. Lack of Innovative Resources

While there is an abundance of new technologies to create a better software product, not all startups have the money to access such, and you might have the same dilemma.

It can be challenging to find the right resources for your own team. Your developers need access to the latest user tools and technologies to be able to create an innovative product.

Software outsourcing solves this problem. Why?

When you work with an outsourced development team, they already have the latest tools and technologies. They also have the necessary experience to use these tools efficiently to create a high-quality product.

This is because most software outsourcing companies are always up-to-date with the latest trends in the industry. They can give you the competitive edge you need to succeed in the market.

business presentation

7. You’re Losing Out on Business Opportunities

Losing on business opportunities is both an experience for established companies and startups.

For startups, it cannot be easy to find the right resources when you need to expand your operations quickly. If you’re not able to meet the demands of your clients, they’ll go to your competitors.

Established companies outsource for the same reason. They need to maintain their competitive edge and keep up with the ever-changing market demands.

In both cases, working with a third-party software development company can help you meet your business goals. It allows you to scale up or down according to your needs easily!

8. Customers Aren’t Satisfied with Your Current Software

Your customers are the lifeblood of your business. If they’re not happy, your business won’t survive.

Many factors can affect customer satisfaction, but the most important is the quality of the products and the services you’re providing them. What are their usual complaints?

website code

If your software product is buggy or performs poorly, your customers will quickly become frustrated. Outdated software can also be a turn-off for customers, and the worst case is they take their business to your competitors.

If you notice that your customer satisfaction rates are dropping, think about outsourcing developers to create a better software product. The right team can help you increase customer satisfaction and, as a result, improve your bottom line!

9. You’ve Got More Work Than You Can Handle

As a startup owner, trying to do everything yourself is not only impossible, but it’s also a recipe for burnout. You’re the one responsible for generating new leads, converting them into customers, and making sure they’re happy with your product.

It can be challenging to find the time to work or monitor your team on developing your software projects when you’ve got a lot of other things on your plate. This is where working with a software outsourcing company can be beneficial.

They will take the load off your shoulders by developing the software product for you, and you can be as involved in the process as you want. Here’s a brief step-by-step guide on how the software development process goes:

Planning and analysis

The first stage is when you define the project scope, timeline, and budget with your outsourcing partner.

Designing the product architecture

This is the stage where the team creates a blueprint of how the software will be built. It includes building wireframes, mockups, and prototypes.

Developing and coding

The actual developers write the code and put it through a series of tests to check that it meets industry-accepted quality standards.



The software is put through a series of tests to check that it meets the functional and non-functional requirements.


The last stage is when the software is made available to the client and end-users.

Most clients get involved during the first stage of planning and analysis. But it’s your decision on how much or little you want to be involved in the process.

We recommend getting in touch with the project manager at least once a week to stay updated on the project’s progress and to give feedback.

10. You’re on a Time Crunch

Speed is your weapon in today’s fast-paced business environment. So, you have to do things quickly without compromising quality.

But when you don’t have enough in-house resources, it can be challenging to get things done on time. This is where working with software outsourcing helps!


The size of teams at software development companies is usually adjustable to meet shorter deadlines. However, this would cause the hourly rate to go up. It might interest you to find firms in developing countries instead.

They often have a lot of extra workers because they’re cheap to hire, so these companies can be more flexible with how many people work on a software development project.

When you outsource software development, your company will be able to get products and services to market faster and achieve success.

11. You Don’t See Results

Think about it this way: if you were a doctor, would you keep using the same treatment on a patient if it wasn’t working? Of course not! You would try a different approach.

The same logic applies to your software development projects. If you are still waiting to see results from your current process, it might be time to switch things up and outsource.

A new team of software developers will bring in different ideas, methods, and processes that could help you achieve your desired results. They will also bring in a fresh perspective, which is essential when you’re trying to solve complex problems.

This is why it’s important to choose a software development company that has a proven track record of helping clients. With access to their wealth of knowledge and expertise, it ensures project success!

outsourcing business

5 Tips to Follow When Outsourcing Software Development

So, when it comes to software outsourcing, where do you start? Here are our 5 tips:

1. Know Your Goals

Before you even begin talking to a potential outsourcing team, you need to have a clear understanding of your goals. You want to avoid complications about the project’s objectives later on.

To do this, answer the following questions:

  • What are your project goals?
  • What are your project requirements?
  • What is your project timeline?
  • What is your project budget?

2. Learn About the Company

There are thousands of companies offering software outsourcing services out there. It can be tough to know which one is the right fit for your company.

To make the decision easier, take some time to research the company. Help from your network of contacts may be useful here.

3. Choose the Right Outsourcing Model

Not all software outsourcing models are created equal. The type of model you choose will have a direct impact on the success of your project.


There are four main types of models:

Fixed-price model

You and the software development company will agree on a set price for the entire project. This model is best for short-term projects with well-defined scope and requirements.

Time and materials model

With this type of model, the development costs depend on the number of hours worked and the materials used. This model is best for long-term projects that are ongoing or may have scope creep.

Dedicated team model

In this model, you will have a dedicated team of software developers working on your project. This model is best for long-term projects that require a lot of manpower.

Project-based outsourcing

This model is similar to the fixed-price model, but it’s based on milestones instead of a set price. This model is best for medium to large projects.

4. Don’t Be Afraid to Go Technical

Software engineering outsourcing is a technical process. As such, don’t be afraid to get technical when interviewing potential candidates.

Go over intellectual property rights, software development methodologies, coding standards, and more. By doing this, you can be sure that the company is capable of meeting your project’s specific requirements.

5. Request a Trial Run 

It’s always a good idea to request a trial run. This will give you an opportunity to see how the software developer works and whether or not they’re able to meet your expectations.

If everything goes well during the trial period, then chances are good that things will continue to go well once you formalize the arrangement. 

shaking hands

Let’s Team Up for Your Software Project!

Outsourcing your software development is a big decision—but it’s one that can reap big rewards for your business.

If any of the above signs resonate with you, then it might be time to make the switch. And we’re here to help!

StarTechUP is a company that can outsource software development projects. We have a team of expert developers who are ready to take on your project.

Get in touch with us today to learn more about what we can do for you!

About the author: Andrea Jacinto - Content Writer

A content writer with a strong SEO background, Andrea has been working with digital marketers from different fields to create optimized articles which are informative, digestible, and fun to read. Now, she's writing for StarTechUP to deliver the latest developments in tech to readers around the world. View on Linkedin