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Why Outsourcing is Important For Startup Software Development?

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    June 30, 2021
Why Outsourcing is Important For Startup Software Development?

Amid the ongoing pandemic, most enterprises –especially startup organizations have made the shift from the development of new software products in-house. However, will it turn into a disaster given the face of uncertain times? Let us find out!

While startups are interesting to take up, they are equally difficult to operate. There are just a bunch of startup organizations that become successful in the long run. In the COVID-19 lockdown situation, most businesses are left with no option but to shut their ventures either temporarily or permanently. During such difficult times, outsourcing has become the new normal for modern enterprises. If the growth of your company is dependent on software, and your internal team has too much on their plate, then you can think about outsourcing the task of startup software development.

Importance of Outsourcing Software Development for Startups

What do software developers do - outsourcing software development can help in minimizing the entire operational costs in the development process for your startup business. In addition to profit maximization, as you engage in software development outsourcing, your agency obtains professional expertise, efficiency in the execution of necessary jobs, and timely delivery of projects. The process of outsourcing software or web development services for your startup organization boosts customer services as well as experience. It is difficult to understand what what does a software developer do when you outsource your work. They work hard to give the best reult. At the same time, it also helps in maintaining the quality of products –even when you might have a limited budget.

Whether you invest in in-house software development resources for creating your product or you outsource software development to some third-party agency –the ultimate decision can either make or break your startup business. Both approaches can have their own pros & cons. The answer would ultimately depend on the given business, the type of product you wish to design, and cultural factors that might exist.

To Outsource or Not? Understanding the Decision Tree

The complex question of whether or not to outsource the task of software development for startups can be broken down into simpler steps.

#What is the Core Value Proposition of Your Product? Is It Technology?

For most startup businesses out there, two possible outcomes are possible:

  • Technology serves to be the core proposition
  • Technology services to be the means to solving a specific problem

Generally, if your business features technology as the core proposition, then you should opt for in-house software development. On the other hand, if software development is only for solving some business issue or challenge, then you can indeed outsource the task of software development.

#Who are Your Buying Customers? What is the Target Audience for Your Business?

The answer to this question can be summarized in the following ways:

  • Your product is meant for technology developers or specialists
  • Your product is aimed for business customers

The decision, in this case, can be quite tricky as both in-house and outsourcing services deliver equal benefits.

#What Makes Your Product Unique?

Through this, it is implied that either technology is proprietary to your startup business, or the manner in which it is implemented is unique. For instance, your platform could be targeting technology developers or specialists. However, neither its underlying technology nor the manner in which it is implemented tends to be proprietary or unique.

Also, read - What are the benefits of Hiring a Software Development Company in the USA

Should Your Startup Outsource or Not?

Software outsourcing can be referred to as an arrangement made by some business to hire some third-party software development company or service provider to carry out software-related tasks that might have been done in-house. However, the development of a complete software application in-house requires both time as well as money. In context with startup businesses, not all organizations will feature an extended team of IT experts. In the given situations, startup businesses can consider outsourcing software development tasks.

Software development process is not easy at all. The process of software development outsourcing helps startup businesses to achieve improved economies of scale –depicting some proportionate savings in the entire costs with the help of increased production levels. It also allows startup organizations to focus on the respective core competencies without spending ample time or money. The process of software development outsourcing can offer startup businesses a competitive advantage by reducing the total costs, improving customer service, and retaining product quality on a limited budget.

Top Benefits of Software Development Outsourcing for Startups

As per the recent stats, it is reported that the IT outsourcing market is estimated to reach the mark of $103.9 billion by the end of 2021. It is a growing trend that will be observed globally soon enough.

In startup culture, due to reduced budget requirements, business outsourcing overseas helps them to be competitive while consolidating their market positions. To top it all, the effective transition to software development outsourcing can help startup businesses to unlock the true value of the given software development project.

As a startup organization, if you wish to outsource the project of software development, here are some benefits:

#Access to a Greater Talent Pool and the Latest Technological Trends

One of the major reasons why startups prefer outsourcing the task of software development is to get exposure to global talent. To top it all, expertise in every technology and skill cannot be demanded while executing the project in-house.

With the help of software development outsourcing, businesses can get access to a highly-skilled workforce from all corners of the world. This helps in expanding their horizons and technical capabilities.

It also implies that you can sit back and relax. Everything right from the process of software development to deployment is handled by the outsourcing team without any need for additional guidance or training. Ensure that you consider these aspects before you choose the right offshore software development team to make sure that your software product delivers the desired outcomes.

With software development outsourcing, you do not have to spend significant time or resources in designing or managing the entire project. At the same time, these projects depict shorter development time and quicker time to market. This increased exposure to a global pool of talent due to software development outsourcing results in delivering improved competitive advantage to your company.

#Improved Focus on Core Business

In modern times, startup businesses are expected to innovate as well as expand for surviving the existing competition. Software development outsourcing can help in improving focus on strengthening the core processes of your business. At the same time, it also does not put pressure on your in-house teams. It further allows them to focus on highly strategic goals that align to the respective business goals.

In turn, this helps in streamlining your business processes while freeing them up. Also, as a startup business, you can allocate more resources to other crucial processes for helping them to be competitive.

#Improved Cost Savings

Companies can look forward to saving 30 percent on the total operational costs by outsourcing the software development process. When you run a successful startup business, the process of spending money never ends. As you would outsource the task of software development, there is a major difference in the costs of the project in both developed & developing countries.

When you outsource, you can save a significant amount of money in terms of the benefits and employee salaries. Therefore, as you outsource software development projects to developing countries, it results in improved economies of scale. Additionally, it also makes it cheaper for the startup organization to outsource the task of software development rather than carrying it in-house.

 #Improved Risk Management

Just like making an investment, it is important to manage the risks in case of software development projects. Software development outsourcing tends to be volatile. Therefore, effective risk management can help in reaping its absolute benefits to ensure the long-term viability of the software development project.

Splitting operations and components amongst different vendors can help in mitigating risks. It is recommended to ensure that you are diligent enough. You can also talk to the existing clients of the vendors while rating their previous experience. Ultimately, you can make the final decision. It is important to remember that the key to establishing a successful software development outsourcing relationship is to ensure outsourcing transparency.

#Accommodating Peak Loads

Every business comes across a moment in which the demand tends to be at its peak. This implies re-distribution of resources that are available in-house to processes and operations that they might be specialized in. Alternatively, it could imply hiring new employees.

Both the processes result in increased costs along with a decrease in overall efficiency. With the help of software development outsourcing, you can consider hiring a reliable & scalable team for the peak period without any commitment. The given offshore software development teams can help in balancing the entire workload while saving money significantly. It also helps in increasing the efficiency to a greater extent.

#Improved Security

Does your in-house team not specialize in IT? Assuming the same, there are great chances that the security of your software product might not be in reliable hands. Security flaws in the existing system can put sensitive information about the company at major risk.

The process of outsourcing the project of software development can put your company at improved coverage against IT-related security breaches. The software team will deliver the assurance that the processes and codes that are used for developing applications tend to be as secure as possible.

#Spending Less Time on Support

A software product will require regular maintenance as well as support. Therefore, as a startup organization, you will require assistance from a dedicated team to take care of the ongoing modifications and errors if they occur. When you outsource the project of software development, it implies that you are already paying the hired team for support & maintenance.

Moreover, if you are fortunate enough, there happens to be a major time-zone difference between your team and the outsourced team. This turns out to be beneficial as it allows your business to leverage the advantage of round-the-clock business activities.

#Reduced Time to Market

Businesses all around the globe have realized the importance of speed and how the same factor can be used for attaining a competitive advantage in the industry. With reliable software development outsourcing services, there is no requirement of depending on your existing in-house resources for launching your product. You can only state the timelines as per your product launching schedule. Then, you will have a dedicated team of software application developer working at your service as per the schedule.

#Access to Relevant Industry-specific Expertise

One of the major challenges that startup organizations tend to face in the software development process is the lack of resources and expertise. In the given case, when you have access to a reliable offshore software development company, it turns out to be the best choice. Initially, the company will be responsible for handling all your resources for the process of software development. Secondly, it will be fostering digital entrepreneurs to focus on other core aspects of the startup business, including:

  • Networking
  • Finding resources
  • Legal formalities
  • Allies hunting
  • Creation of a strategy

Secondly, when you outsource custom software development services, it will allow you as an entrepreneur to have a myriad of options –including staff augmentation, marketing, design, software consulting, and so more upon request from the offshore company. At the same time, startup businesses are also able to gain benefits from the given types of businesses by delivering project planning, MVPs, testing, creating UI/UX design, and so more.

#Access to Improved Infrastructure

There is no denying the fact that starting software development from scratch is not a fast process. The creation of the software program can even take several years. As such, both money and time can be wasted along the process.

Additionally, outsourcing software development can help in alleviating the budget of the project while saving you valuable time. When you receive a properly developed software product, it allows you to reach the next stage of software development & deployment.

#Effective Communication

With respect to communication, offshore software developers tend to have a major advantage. The experience and adaptation of these developers have been acquired over several years as they have worked on projects and with people from all corners of the world. Moreover, another demerit of not outsourcing your software development task is the cost of ensuring a collaboration platform for the developers to work upon the given project.

Outsourcing the software development service will help your startup business to save money as the experienced developers will already be having access to the platforms to work on and make the entire process faster.

Tips to Hire the Best Offshore Software Development Team

If you wish to receive the benefits of outsourcing your software development project, you should aim at following the right process. Here are some important points to keep in mind:

#Know the Latest Trends

You should spend some time knowing about the latest trends related to software development to ensure that you receive access to cutting-edge technology. Currently, some of the popular trends you should look out for are:

  • Cloud software development and cloud computing
  • Progressive web applications
  • Software development based on Artificial Intelligence
  • Internet of Things
  • Mobile-first development
  • Augmented reality and virtual reality

In addition to these trends, it will be a great idea to know about the trending software development platforms and languages. It will allow you to choose the right mobile app development company with the right expertise. At the same time, it will also allow you to get access to a product that is highly competitive.

#Identify Your Needs

The next step is to know about the exact type of software product that you wish to develop. Once you know this, you can invest in the best web development company for the desired results. Moreover, as you identify your specific requirements, it will allow you to make the best-ever selection of the outsourcing companies that are available out there.

#Start With Proper Research

You can start searching for a reliable open source development company delivering access to top-notch software development services. Firstly, you can finalize the country to which you would like to outsource your software development project. You can take help from the search engine results. You can also go through detailed reviews and online ratings to know about the services offered by the particular company.

Go through the credentials, past references, expertise, and portfolios to know about the company’s reputation. You can also consider reaching out to previous clients of the company to learn about their experiences.


As a startup, when you outsource software development services to a reliable React Native app development company, it turns out to be a cost-effective and time-saving process. It also serves to be a fast way to convert your ideas into an executable project. When you do not have to worry about specific technological aspects, hiring processes, renting offices, and working on a tight budget, you can develop business ideas that can benefit you as a startup organization.

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