Why Should Startups Outsource Software Development Projects?

Why Should Startups Outsource Software Development Projects?

outsource software development

Nowadays, outsource software development is Normal. When your in-house development team has lots of work and the pressure of doing it in time, outsourcing is the best option to unload some tension from your development team.

In-home software development is always expensive and time taking. So, when the business is about to begin, and you focus on these things that are time taking, it won’t be good for your business. A startup has many things to do, and it cannot do everything independently. You have to take help from outside. It will help you focus on other important work necessary for your business. That is why one should adopt magnificent software development methodologies like outsourcing tasks. 

Around 40% of the tasks in the present time are being outsourced from top-notch IT companies. Moreover, outsourcing an actual MVP model costs around $40,000. It includes everything from development to deployment. Thus, one can easily estimate the freedom it provides from other tasks and let developers focus on the core development opportunities. However, tech companies have many questions regarding outsourcing. Let’s answer some questions regarding outsourcing software development projects

Why There is a Need to Outsource Software Development Projects?

Outsourcing a software development project is always better than putting the burden on the head. Firstly, software development needs complete concentration, and putting a burden won’t allow the engineer to think creatively and smartly. It is the first reason why we should outsource software development. Other important reasons are indicated ahead:

1. Cost efficient

There is no need to tell you that it is the main reason to outsource software development projects by Startups. Outsource software development is cost-effective and helps in operating the business more efficiently. Most startups cannot afford in-home software development. 

If you hire a full-time developer, the developer becomes an employee of your organization, and you have to pay the developer like other employees. It includes basic pay, but you also have to pay dearness allowance, other allowances, reimbursements, annual bonus, perquisites, and many more benefits with a basic salary. 

It will cost too much to hire a developer in comparison to outsourcing. In other words, in outsourcing, the Startups have to pay only service charges to developers. There will be no dearness allowance, bonus, commission, reimbursements, etc.

Startups save much money by outsourcing software development. The saved money can be used in other areas of business where it is required. As a result, It will produce less expensive finished products and attract many customers towards them. It also shows that you are good with money management. 

You use the investors’ money very effectively. The investors will be impressed by you after seeing how you produce products with less money using highly experienced overseas developers. Simultaneously, you can also do custom software development by outsourcing which is again a time & money-saving activity.

2. Save Time

Startups have to wear many hats in the beginning. They have multiple tasks on their plates where the focus is required. Doing everything independently will decrease the efficiency towards work and finishing product. Simultaneously, it will expand the software development life cycle.

Hiring professionals will also make them trapped in unnecessary activities. They have to go through many stages to employ the expert like firstly, they have to advertise the vacancies and requirements, select resumes, call for interviews, and discuss CTC with them. After selection, train them, introduce them to teams and discuss their role and what you expect from them. This whole process will take lots of time. As a result, it will delay matching up with your deadlines. You will produce products inefficiently.

On the other hand, if you hire from outside, you don’t have to waste your precious time on these things. They have experience in their work. Only you have to select the right one, give them the project, and discuss your requirements and development cost. This process will save lots of time, unlike hiring in-home developers. Moreover, it will streamline the entire software development services.

They don’t need to meet with your teammates, set coordinates, or adapt your work culture, environment, and technology. They are professionals and know how to do their work. They will give your project on time. As a result, you will be relaxed and divert your precious time to other vital areas of your organization. It will increase the efficiency of your organization and never miss your deadlines.

3. Software Developed by Skilled Developers

For startups, it isn’t easy to employ experienced and skilled ones to do their development work. There are many reasons behind it. Some of them are given below:-

  • Startups can’t afford to employ them.
  • Give special facilities
  • Adjust to your company’s environment
  • Limited resources

So, the better option is to choose to outsource software development. It allows you to work with experienced and skilled developers. You can develop your products with a skilled hand. It not only gives you an efficient product but also impresses your investors & renders the most acceptable software development solution. The trust of investors will increase towards you. It will help your startups to be famous and popular amongst the users. The users will trust your organization and your process.

Not only startups, many other big tech companies like Google, WhatsApp, Skype, and Slack, take advantage of outsourcing. Yes, you heard it right. Many companies outsource a significant portion of their software. A company like Google outsources to India.

If big companies are outsourcing their software development, why not the tiny tech startups do so?

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4. Faster Availability in the Market

In the competitive tech world, everything is about timing. Which organization deploys its product first in the market. The one who did in time wins this battle and will survive in the long run. It will give you special recognition in the market.

With in-house development, sometimes it will be impossible. As a startup, you will have to do many things, from product announcements to its release in the market. Between these two stages, many processes will follow to make it possible. You have to look after everything. There are some problems startups have to face during the custom software development process

  • Coordination between teams
  • Favorable environment
  • Limited resources
  • Lack of experience
  • Time optimization
  • Meet deadlines
  • Money issue

If any step goes wrong, it will delay your product’s release in the market. It will decrease your reputation in the market. The investors will also try to pull out their investments from your company.

So it’s better to choose to outsource for relaxing from these above issues. You will get your products on time and finish your work before the deadline. Get more time for testing before releasing.

5. Scalability

Scalability is one of the main reasons behind outsourcing software development projects. You can scale up or down according to your project’s requirements. This level of flexibility is not easy to find with in-house development. You cannot quickly fire any developer from the development team. It will create many issues-

  • The project will stop.
  • Recruit new developer in a short period
  • New developers require time to adjust
  • Start projects from the beginning
  • Recruit the wrong person
  • Hurt company reputation

Outsourcing will help with the above issues and decrease the burden on CTO and project manager. Outsourcing not only has the advantage of the low cost but also decreases the pressure on in-house developers. You can hire any outside developer according to your needs. You can hire them on an hourly basis. As a result, it will save you many resources.

6. Reduce the Risk of Recruiting the Wrong Developer

It is not always possible that you recruit the right developer. A recruiting process goes through several steps. These are a time taking process. With these several steps, the risk of recruitment is high. If anything goes wrong, the whole process goes in vain. It will also cost the company and misuses resources.

It’s better to choose the option of outsourcing. You can hire expert and experienced developers in no time and at a low cost. It will also save many resources for your organization compared to in-house development.

7. No Need for Micromanagement

If you go for the outsourcing option for your software development project, the project manager will look after your project. In case of any issues with the software, the project manager is the first point of contact.

You can sign a contract with the outsourcing software development company. After that, they are binding by all the conditions of the contract. They can’t copy or re-sale your projects elsewhere. They also provide you services after sale if there is any issue regarding developed software.

8. Help in Focusing On Core Competencies

It is necessary to focus on the core competencies of startups. Startups should not divide their focus into different areas. They should focus on their strength and outsource all other things.

You can’t deny that outsourcing is a good option for startups. With outsourcing, a startup only gives strength to its core area but also optimizes its process.

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9. Easy Availability

In the past, it was not easy to outsource software development projects. Outsourcing was not readily available. But now, the scenario has changed. Everyone is outsourcing. Outsourcing is available in no time. Just open the internet and search as per requirement.

The best part is that you can hire developers hourly and avoid long-term commitments. Giving them a fixed salary and other benefits will not be wise.

You can hire developers by outsourcing the project hourly from a reputed software development company.


In the article, we discussed the reasons behind outsourcing software development projects by Startups. It will ensure the Startups that the product will be as per market standards and developed before the deadline. But it is also not an easy task to outsource. The Startups have to look for the right outsourcing partner. With the right outsourcing partner, the Startups can achieve favorable results in minimum time. We also mentioned the problems faced by the Startups through in-house development. We hope the article will help you understand the benefits of outsourcing software development projects. 

Sanjeev Agrawal

Sanjeev Agrawal

My name is Sanjeev Agrawal. I am a Director and Co-founder of Dreamsoft4u, IT Consulting Company. I am having a keen interest in the latest trends and technologies that are emerging in different domains. Being an entrepreneur in the field of the IT sector, it becomes my responsibility to aid my audience with the knowledge of the latest trends in the market.

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