How Does Outsourcing Help Reduce Software Development Costs?

Anna Khrupa by Anna Khrupa on September 3, 2019

How Does Outsourcing Help Reduce Software Development Costs?

Thousands of companies worldwide outsource their custom software development services. The main reason for this is that it’s the simplest and most effective way to reduce the overall software development expenses. Handing over your development routine to outsourced professionals can enable you to reduce up to 60% of your operational costs. So how exactly does software development outsourcing help to minimize expenses?

How IT Outsourcing Helps Reduce Costs

If you’re considering this option seriously, then you should definitely know how it helps reduce your software development costs:

Reduced Workload

With software outsourcing, you’re not just able to reduce overall workload, but also to significantly save cost on the absence of an in-house team of developers. Imagine how pricey professionals can be when you take into considerations the cost of recruitment, onboarding, healthcare, taxes (not to mention providing office space and hardware). Outsourcing eliminates these overhead expenses.

Faster Recruitment

By hiring offshore developers, you skip the tedious recruitment process and will be able to get to work with a professional team of developers right away. Software outsourcing cost is much lower, but at the same time, the high quality is maintained. Offshore companies have already gathered the best experts in the field, so you don’t have to waste time and money on training new employees. Outsourcing will allow you to achieve tangible results much faster. And as a consequence, you will get all development processes done faster so you can harvest from a successfully running business.

Niche Experts

The talent shortage is a real problem even for developed countries. Skilled workers are available but for the high price. Outsourcing gives you access to professionals who are also proficient in English so that you won’t have problems communicating and solving software development problems. It also helps to avoid workforce fluctuation issues, when professionals are not available to work on some task, especially during the holiday season. All outsource experts are ready to tackle any IT-related task right away.

Fully-formed dedicated teams

Offshore companies offer you teams of expert developers who have extensive experience and knowledge in the field, meaning all tasks will be done faster and more effectively. Increased productivity for the lower price is guaranteed as part of the organizational burden will be shared with your outsource partner. Therefore, all ideas will be implemented in real life faster, and the product will be delivered ahead of time.

Time zones? Not a problem

Offshore companies are located far from your country, which means time zone difference will be inevitable while collaborating. For example, companies in the US outsourcing their tasks to developers in India will have 12 hours difference. Yes, some time-related challenges will occur from time to time. Nevertheless, you can definitely benefit from it as it enables constant work around the clock. Even if your in-house team is on vacation or the office is simply closed, the software development team will be still working on getting all tasks done.

The organization is taken care of

No extra investments in developing infrastructure are needed. If you outsource your software development to an outsourcing company, it means that your partner will be in charge of all infrastructure changes if it’s required.

Built-in Risk Management

The outsource team will be in charge of risk management. Even if some operational or technical crisis occurs, or you will encounter marketing fluctuation, your outsourcing team will still keep working on the assignment. And when it comes to the quality of your software? A good SLA (Service Level Agreement) will make sure your remote team’s output meets your requirements.

The Best Countries to Outsource Software Development

Here is real proof that an offshore team of developers is a perfect cost-saving solution. Hiring an in-house team requires a lot of time and expenses. Besides, full-time developers salary will be extremely high. For example, the highest average annual salary is in Australia (which is $105K) and in the USA the number amount to $95K per year. In Europe, the average salary varies from $45K up to $70K. In comparison, offshore software development costs are much lower. Some companies opt for offshore outsourcing in India, Malaysia, Brazil or the Philippines, where the price for developers ranges between $8-15K dollars per year. However, the quality will be lower than you can expect.

There are other options though, and the best countries for software outsourcing are located in Eastern Europe (such as Ukraine, Poland, and the Czech Republic) with extremely qualified and experienced teams of developers. Right now, more and more companies and businesses outsource their software development to Ukraine. In this country, you can hire remote accomplished developers with years of expertise with the average annual salary of $25K. It’s 3 or even 4 times less than hiring an in-house developer in the US, and the quality of work delivered will impress you. Besides, all teams have a great command of English, both verbal and written. Time zone difference is less, so you will be able to establish effective communication.


Considering one of the software outsourcing options will be beneficial as saving costs is important for startups and for successfully running businesses as well. Besides, software development outsourcing can help your team not just to reduce expenses, but also to increase efficiency and be in control of more important business activities, reduce risks. Therefore, the potential of offshore IT outsourcing is immense, and it already started conquering the market. You should give it a try to take your business to the next level and achieve outstanding results faster.

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