How Software Outsourcing Works Around the Globe?

by Anna Kane , 4 years ago

With how the economy is becoming globalized, many companies and businesses work towards the goal of gaining a competitive advantage by reducing costs, maximizing efficiency, and enhancing customer service. However, how can you achieve these goals if your budget is limited or if your hands are already full? If you’re looking for an answer to these problems or if you want your company to compete internationally, then software outsourcing is what you need. 

Today’s business organizational, technological, and environmental factors require businesses to operate effectively and efficiently in order to survive competitive business environments. For this goal, people use different methods and strategies to improve automation, business process re-engineering, standardization, globalization, and productivity. They modify organizations to become fat and lean so that they can develop flexibility in addressing changes in the customers’ needs and the environment.

What is Software Outsourcing?

You might have heard the definition of the word outsourcing before. Outsourcing is described as services or goods obtained from a foreign or outside supplier as a replacement to an internal source. But software outsourcing is more than this. Software outsourcing is indeed the act of hiring a third-party provider to solve and offer services related to programming and software development, but software outsourcing is also considered as a business model. 

By relying on a freelance individual or a third-party organization to handle certain business processes, your organization can manage even the hardest software related task and problems. More or less 65% of the entire outsourcing market is made up of software and IT workers. This is one of the reasons why a company must hire developers. The others are described below.

  • Nearly all businesses today need software services.
  • Business owners can reduce costs by relying on software outsourcing.
  • The projects related to software development constantly increases day-by-day. 

Why Is Software Outsourcing A Feasible Business Model?

Reducing costs is the main reason why businesses and companies outsource their software development tasks. The total costs incurred when hiring an IT specialist is higher than seeking the services of third-party individuals. The business environment always requires high-efficiency to prosper and survive in a competitive environment. 

To stay or reach the forefront, business owners use different strategies to increase productivity and minimize cost. They use many methods like standardization, automation, and outsourcing. Additionally, they modify the structure of the entire organization to enable quick response to changes and customer needs. Software outsourcing is one of the methods that managers utilize to achieve the said goals. 

The Advantages of Software Outsourcing

Some advantages that comes with software outsourcing were mentioned above, but there are more. Offshore development is an effective strategy for your business or company, for it helps your business delegate tasks better. It also helps them focus on jobs related to their field, not to things that they are not accustomed to. 

Many are knowledgeable about programming and an employee of yours may possess knowledge in solving IT related problems; however, you must also ask yourself if his skills are best suited for the job you’re giving them. 

If your answer is no, then it is recommended that you hire a developer to ease the workload on your shoulders and to allow your employees to focus on their crafts and fields. This enables them to become more productive. Other benefits include:

1) Cost reduction

Software outsourcing is reliable for minimizing cost while reducing workload for the company, and outsourcing also cost 90% less than hiring two to three individuals. In-house labor in North America, and Western Europe for low-level tasks does not require to make any large investment, for they outsource their software development tasks to other countries such as Vietnam, China, and the Philippines

2) Saves time

Finishing software development tasks takes less time when the developer is working on your programs all day and all night. When you impose time limit, you can get your product immediately or before or on the date of your given deadline. 

3) Lack of in-house experience.

If the internal resources of a business are insufficient for globalization, then outsourcing can solve this problem cost-effectively. 

4) Flexibility

When you outsource your software related task and projects, you don’t need to spend time hiring, recruiting, housing, and training your employees for new projects. This saves time and allows you to focus on other business related issues.

5) Skilled IT specialists

You can employ the brightest and the best IT professionals by passing the gaps in the applicant pool and by going overseas.

6) Focused strategy

Software outsourcing streamline business processes making the system more effective and efficient by employing third party individuals. It can provide strategies to gain advantages in the technological race and in the market structure of your business. 

7) Improved compliance

It can develop and structure an automated compliance system that can reduce human interventions in some business processes. 

8) Enhanced accuracy

Outsourcing your software development related tasks improves some of your employees’ work accuracy, and the software made by IT experts are more accurate and specific for your business than those that are bought online. 

9) Advances in technology

Technology constantly evolves, and it is the same in all the countries in our world. This is because information regarding software advancements is not restricted to any countries. The standard of living and education and the economy of the country are irrelevant to finding the best software developers and IT specialists. If your company is starting to bloom or if it is already prospering, then do not limit your view to local programmers because the most exceptional developers can be found on locations where you least expect geniuses to bud. 

10) Risk mitigation

Reduce vulnerabilities and risk by seeking the services of an outsourcing company that had been proven reliable and effective in developing software and applications. 

How to Implement Software Outsourcing for Globalization?

Software outsourcing is the process of computer testing, documenting, bug fixing, and programming involved in conceptualizing, building, and maintaining frameworks and programs that result in a software product. If you have decided to outsource some or all of your IT related task, then you might be wondering how you can effectively implement software outsourcing to your current business model. Here is a guide on how you can integrate software outsourcing to your company effectively and safely. 

1. Make a list of your candidates

Look for at least five of the best IT experts that you can find before examining each of them. Ask your candidates about their knowledge in software development and about how they can help your company grow. You must also look for individuals who are experienced in the field so that you can make sure that the project entrusted to them can become profitable for your business. 

It is alright to choose startup companies, but there are pros and cons to it. One of the pros is that small businesses offer cheaper services, but they often do not possess ample experience. Depending on the project’s complexity and nature, you must choose 5-10 companies and another 5 individuals who catch your eye. 

Make sure that they are well-experienced, reputable, cost-effective, and reliable. Choose the best, but the most low cost in their category. They must be suitable for the software related tasks and projects that you will outsource. It is recommended to create a list of the following columns:

Names of the IT specialists

Names of the companies

The price of hiring them

Details of their experience, skills, and proposals

Your evaluation of each third-party provider based on the data that you have gathered.

When you lay out all information, it is easier and faster to come up with a decision than analyzing all the data inside your head. 

2. Check for your candidates' reputation

Know as much as you can about the provider that you have chosen. Search the name of the company in one of the major search engines like google or yahoo. See what people say about the agency. Check if they have good reviews or bad ones. Now, some of these feedbacks are paid. This means that some cannot be considered as genuine reviews. 

Although some websites filter out and remove paid reviews, there are still that can pass through the system. Such reviews aim to promote companies, but some of them are for masking the negative reputation of unreliable providers. It is advisable to study the company and the profiles of the people giving them 5-star or 4-star reviews. In this way, you will not waste your time and money on a provider that provides honey-coated words. 

3. Check if the provider is financially stable

The last thing that you need is a third-party provider that has many financial troubles. It is true that most businesses constantly face internal issues. But, if a company cannot sustain itself, then it might be a sign of a lack of clients or mismanagement. It is important to have a partner that is proficient and financially stable. A stable business indicates competency in their field, for a business cannot prosper if it is not trusted by clients.

4. Learn their culture

Know the cliches that circle around the IT industry. The cost of services increases when you seek the assistance of developers coming from specific countries. The opposite of this is also true. This means that the same service can be expensive or low-cost depending on the location of your third-party provider. One of the factors that affect the prices of IT services is the educational level of the individuals in that specific country. Because of this, you should outsource complex programming-related tasks to people who hail from reputable colleges or to those who possess plenty of experience. 

Another thing to consider is social background. It can greatly affect how you communicate and interact with your provider. You must regard the details of your project and know if your chosen agency can meet international standards. Work ethics is different from country to country. This can greatly affect your desired schedule if you plan to seek the services of a third-party provider from abroad. 

The most important thing to consider is the relevant holidays in that company. Some people cannot ignore or disregard customs and religious activities. That is why you need to be mindful of dates. It is true that you pay for them to do their job; however, there are things that you must permit to create a long harmonious relationship with a well-refuted and reliable firm. Regarding regular schedules, third-party providers often adjust to the preferred time requested by their clients. 

6. Check their finished projects

Companies often exaggerate their statistics and accomplishments. That is why you must ask for links to their projects. Do not believe words, but believe in what their outputs show. Visit the websites that they have provided as a reference to examine their work first-hand. Their completed projects reflect their creativeness, quality, and skills. Check the speed, user experience, robustness, functionality, and media integration of the program being considered. 

Furthermore, do not settle on just one inspection. Take time to evaluate more of their completed projects to have a feel for their skills and competency. Examine at least five websites or five programs that they have built. For websites, check if the pages are easy to navigate, loads quickly, user-friendly, and compatible with mobile devices. 

7. Meet representatives in person

Although the internet allows face-to-face conversations, online communication is still different compared to meeting and talking personally. Body language, gesture, tone, and overall behavior can be perceived when you meet an individual in person. Such signs can give you a general idea of how a person or a company behaves regarding business-related matters. You can infer about their skills, capability, and work ethics just by interacting with them. Now, not all people are capable of doing this, but if you own a business, it is necessary to study human behaviors and the signs that can enable you to read a person. 

In addition, if your project requires a large number of resources and is complex, then it is advisable to meet-up with an agency representative so that you can discuss all the crucial details of the program or business process assigned to them. If miscommunication occurs then time, effort, and money are wasted and can lead to losses for both your business and your third-party provider. 


There are many functions in a business or company that can be outsourced. From payroll software to management training, software outsourcing can handle them all. Business Process Outsourcing has become a massive industry as time passes by. Web design and web development are often outsourced by most companies for timely upgrades and better maintenance. 

Outsourcing software development has now become a primary factor in a business’ success because it reduces cost, improves work efficiency of employees, enhances the accuracy of business operations, and helps in the globalization of a company. If you want your business to operate on the international scale, then you must outsource some of your business processes especially software development.

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