Outsourced Software Development

Outsourced software development is something many companies are now approaching as a viable alternative to doing all their software development work internally. This can be done for a variety of reasons.

Development costs can be reduced by approaching a software outsourcing company that specialises in the particular niche field that your project lies within. Alternatively, a company's need for bespoke software development may be rare and maintaining an internal software development department could be prohibitively expensive. Other reasons include cheaper personnel costs in other countries, the current difficulties with recruiting and temporarily expanding current development capacity for a limited duration. Whatever the reason, it is both large and small companies that are now making the move to software development outsourcing.

Whilst there has been a move to cheaper outsourcing solutions offered in other countries (India and some former Soviet states being notable examples) which can produce commendable results, there is still a need for local knowledge for certain types of application. A general purpose website for searching a database of information, where the database is maintained by local content editors, is a perfect example of a system where the value of the local knowledge of the developers is diminished. However, a complicated application containing decision flows based on an individual country's legislation may be difficult and prohibitively costly to completely specify for developers with no local knowledge.

Where sensitive information is involved, either data or intellectual property, or a company is dealing with areas that require security clearance, outsourcing the development of a system may be impossible. In this instance, if the internal development department's resources are too limited, it may be more desirable to employ temporary staff on a contract or consultancy basis. As individuals, these temporary staff can be subject to the same security clearance criteria, non-disclosure agreements, etc., as the permanent members of the development department.

The cost benefits of outsourcing also need careful management. On the face of it, a cheap outsourcing quote from abroad may seem like a no-brainer, but consideration must always be given to the internal costs that are still likely to be incurred supporting the external operation. For a big project, project management is likely to take considerable internal resource. Although an external software outsourcing company may offer project management, this is likely to only cover their own development role. The larger holistic incorporation into wider systems can still take considerable resources from a full time project manager. Testing is also an area that requires much forward planning. Again, external entities may offer their own testing resource, but this is usually limited in scope to the specification they were provided with. If the solution is to integrate into wider systems, then testing of this integration must be built into any project plan and will require internal staff to perform this role. Finally if the outsourced project requires the knowledge of any existing internal development personnel, then it is important not to underestimate how much of their time is likely to be taken up with answering queries and providing assistance to the outsourcing company's own personnel. From experience, a good rule of thumb is to estimate this time then multiply it by ten!

In summary, software development outsourcing is a booming business, both at home and abroad. However, serious consideration needs to be given to each solution on a case by case basis to ascertain what outsourcing solution, if any, is correct for each application.

Mike Duffy (Identity Production Systems Ltd)

For more information on software development outsourcing, please refer to where we discuss this further.


  1. Hey, nice site you have here! Keep up the excellent work!

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  2. Software development has to cross through various phases and any particular employed by the company to work on it leaves, then new recruit costs much more. So outsourcing the job avoids such issues and also gets the work done in appropriate sum.
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  3. There are some interesting points in time in this article about bespoke software development but I don’t know if I see all of them center to heart. There is some validity but I will take hold opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as well

  4. Emulation is providing Outsource software development. First of all I will tell u the exact meaning of outsourcing. It means that any job, project, task, problem, operation or process that could be performed by employees within an organization, but is instead contracted to a third party for a significant period of time. The functions that are performed by the third party can be performed on-site or off-site. Means outside of Indian company or Big hearted companies hiring the other companies to complete their side project for broad our business. Because big hearted companies are concentrate on their core activities.

  5. Outsourcing Software Development Company : Great insight, great article, and thanks for sharing it. Good! All would be well written

  6. Recent styles in the company growth have seen the need to look at the changing styles in the company environment. As the organizations set the goals high enough to maintain the aggressive industry but they are gap of experienced work to achieve the set goals.

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