Why You Need Outsourced Software Product Development?

Calendar icon January 23, 2024

In-house Software Development is an ideal approach since it allows a firm to create and manufacture the exact solution that it requires. But you will have to carry lots of baggage, time, and resources to build an efficient Software Development team on your own. Fortunately, a service known as Software Development or outsourced software product development can save business costs and make the desired solution a reality within a short time frame.

What is Outsourced software product development?

Before delving into the specifics of the process, let Wiicamp first define Software Outsourcing.

Outsourcing is a business strategy in which a task, process, function, or any part of the business is delegated to an outside vendor. Depending on the task scope, the vendor in this context can be an individual or a company. Outsourced software product development is now most commonly used in the IT industry. By the end of this year, the total value of IT outsourcing services could exceed $413.72 billion. The reason for such an increase in the practices is they save business costs and efficiency.

What is Software Outsourcing?
Figure 1. Software Outsource is about hiring third pirates to do your company’s task

Suppose you’re wondering what outsourcing in Software engineering is. In that case, the answer is simple: it’s hiring an external company or an individual to complete a set of tasks on behalf of the client. The difference here is that some businesses can outsource the entire app development process (for example, if a non-tech company needs a new app to track check-ins or working hours), whereas others would outsource only a portion of the process.

Over the last few years, one of the most prominent trends in Software Development has been outsourcing. Non-tech companies seek expert knowledge in IT Outsourcing companies, whereas 60% or more of Software Development firms outsource at least part of their development processes. Most of the time, the QA/testing stage is delegated to experts in the field. In Development Outsourcing, project management, and planning are also standard. Cybersecurity outsourcing is expected to be popular in 2021. This means that even experienced software engineers will consider enlisting the assistance of outside developers to protect their projects from data breaches and reduce the likelihood of hacker attacks.

The specifics of the distinctions between product and software application development are a matter that merits special consideration, but in this section, we’ll try to summarize the key ones. They are separated into:

Technology-related ones

An app is created on demand for a specific company or group of users, but it is a universal product that is made to meet the needs of a variety of clients. Every customer ought to be able to apply the product correctly. As a result, it must be flexible, adaptable, trustworthy, well-designed, and have a strong framework that enables the development of new functions. Implementing system requirements suffice when referring to an application. The making of products is not covered by this. A software product may have numerous coexisting versions due to its many versions and languages. Poor initial engineering can make it difficult for you to maintain your products.

Human-related ones

The proficiency and skill set needed to create a well-designed product are greater than those needed to create the app. Customers for application development typically examine its screens to determine how well it functions. Customers who are involved in product development then review the codebase to ensure that it adheres to specifications like adjustability, reliability, modifiability, and architectural consistency. As a result, professionals working in product development need to have more training and expertise than those working in application development.

Process related ones

In the case of an application, proper documentation, excellent configuration control, and careful adherence to design, architecture, and coding standards are all crucial. These requirements are crucial when creating software products. As you can see, outsourcing product development differs significantly from outsourcing application development, which is why it calls for a unique strategy.

Why should your business outsource Software Development?

In all industries, the concept of delegating some work to a third party exists. Thus, automotive corporations outsource part manufacturing to third-party vendors, educational institutions outsource content creation to third-party writers, and well-known brands outsource sewing to overseas factories. In 2019-2020, approximately 67 percent of services worldwide were outsourced. According to popular belief, Software Development outsourcing is done when a company needs to cut costs regardless of service quality. The truth is that outsourcing saves money, but there are many other factors to consider aside from financial profitability.

So, here are all the reasons your company should choose IT to outsource teams:

Deep Knowledge, Skill, and Experience Access

When you have a new product idea, you begin creating a business plan that should contain solutions for each stage of the project development. At this point, you become aware of the lack of resources, experience, and knowledge in many or most areas related to developing and launching a product. The lack of software developers and competition from well-established companies offering sizable compensation packages should also be considered. You can quickly and affordably access all competencies through outsourced product development.

You can gain from consulting, analytics, marketing, UI/UX design, the creation of a workable MVP, and custom software development services, to name just a few. Outsourced product development is an excellent option for your company if you want to build and launch your startup quickly. The good news is that you can now get turn-key solutions from software outsourcing companies that cover most of your project needs, requirements, and spending limits.

Maintain command of development

It took Ascendix five different IT outsourcing locations before we discovered the best outsourcing model for a product company like ours. IT outsourcing wasn’t always a success story for Ascendix. When we outsourced product development in 2005, we wanted to be able to use the vendor’s development team as an extension of our software team. Eventually, we found an Eastern European software outsourcing company that put together a team for us and then allowed us to complete its buy-out.

Today, a dedicated team or staff augmentation are terms used to describe this model. In this case, you would choose from among the carefully screened workers of the outsourcing vendor; they might only work on your project, speak directly to you, and adhere to your management style and procedures. If you are looking for a long-term engagement, the outsourcing company may frequently hire developers to match your unique requirements (typically, one year or more).

Maintain command of development
Figure 2: Maintain command of development

Vendors can offer temporary, on-demand professionals, such as designers, business analysts, quality assurance, DevOps, and more. Some vendors require full-time employment for all team members. A product development outsourcing company may also offer your startup flexible and demand-specific engagement models. For instance, Ascendix has successfully provided software development services for over ten years, which enables us to offer a variety of contract options today. You can choose a fixed price, time & material, or a dedicated team depending on the needs of your project. Additionally, you can hire a technical team or a number of developers to work on your project from conception to launch and ongoing support.

In the end, it’s up to you whether you want to personally manage the team or stay out of the way and concentrate on other aspects of the product. A seasoned outsourcing company with years of experience will fully coordinate the work through a project manager if you decide to delegate fully.  Your point of contact will be this expert, who will address any issues that may arise, keep you informed about the project’s development, and respond to your inquiries.

During the initial discovery phase, a project manager will talk with you about the details of your project, including its requirements, schedule, and budget. He or she will be in charge of micromanagement, which includes sprint planning, backlog creation, deadline setting and meeting, and product demo preparation.

Reduce cost when compared with maintaining an in-house Software Development team.

Onboarding a new team member is a complicated and time-consuming process. The new employee must learn about the organization’s internal rules, project specifics, network contacts, current tasks, and workflow,… Typically, it takes about a month or two to bring a new team member up to speed. During this period of knowledge transfer, a company pays the salaries of two employees (the newcomer and the leaving specialist). All of this onboarding can be reduced to essential knowledge by hiring a specific firm or individual for a specific task. Furthermore, because outsourcing entails bringing a professional into the team, they typically require less time to understand all of the specifics.

Why should your business outsource Software Development?
Figure 3. Increasing efficiency and reducing cost is the benefit when choosing software outsourcing

You can have the best solution with a bit of cost

When budgets are tight and you require a project manager with experience in your field, choosing a software outsourcing team like Wiicamp can be a great solution. You may not have the budget to hire one full-time, but even temporary assistance from an industry superstar will streamline the process and lay the groundwork for future work. Add to that the superstar’s influence and audience’s contact list, and you have yet another reason to choose this option.

Have a better insight

Software outsourcing services are invaluable due to their outside perspective on the process and industry experience. It outsources teams like Wiicamp to identify missing components of a manufacturing line and bring new ideas to the table based on their previous experiences. We can provide far more benefits than simply completing a single task.

Software outsourcing can be a way of talent recruitment

A trial period for an employee is common, but it cannot be extended indefinitely. Outsourcing allows you to work with a brilliant mind in the field to test your expertise in real time for an indefinite period. It assists businesses in avoiding the complexities of long-term employment contracts and high taxes in many countries. Individual tasks with a fixed term and price, on the other hand, are an excellent way to vet the industry and create a pool of potential candidates for full-time recruitment. Of course, the goal of outsourcing development is to avoid full-time hiring. Still, having a backup list of excellent workers and a contact list of industry experts would be beneficial.

Help your company focus on what matters

Small tasks must be completed, but they may consume all of your time, leaving none for what is important. Companies, like families, must outsource some services to focus on their primary goals and targets. A company can get clean floors while making money on production by paying such a housekeeper. Allow yourself more time to focus on what you do best while the outsourced team handles the minor details.

The Best Outsourcing Models for Product Development

A crucial component of developing a company’s outsourcing strategy is selecting the appropriate outsourcing model. You can outsource your product development using a variety of approaches, but they all rest on three principles: staff development, committed teams, and project-based outsourcing. The rock-paper-scissors game applies to these models; we cannot declare one to be superior to the other. One is better than the other depending on your needs, and they all are required to establish balance when dealing with outsourcing issues. Let’s ponder this for a while.

Model for staff growth

This type of outsourcing is possibly the easiest. It involves assembling a development team and setting up the service provider’s workspace. All other crucial elements, such as evaluating and monitoring the process and managing ongoing projects, are the client’s responsibility. The same holds for managing staff. The provider must see that employees show up for work, distribute vacation time, allocate payments, etc. The customer is responsible for hiring staff, team building activities, and task distribution.

Dedicated team model

In this scenario, in addition to team building, the provider is in charge of handling personnel matters, menial tasks, and building quality. Instead of a team of specialists working on low-level tasks, you get a team that is involved in several projects or providing a particular complex service. The mission of the provider is to hire new employees. The provider creates a successful strategy for the group and then implements it. Micromanagement and controlling responsibilities are also moved to the provider’s end.

However, decisions regarding project management are typically made by the client. Different people prefer to control a project independently from top to bottom, while others prefer to delegate internal project development to an outside team. In some instances, the product is entirely switched over to the service of the provider.

Project-based model

This choice is more prominent. It suggests that the provider has a predetermined objective that they must meet within a given time frame. The objective is typically a list of conditions that the developed product must meet. The definitions of various outsourcing models determine their advantages and disadvantages. Remember that you will pay more for the same task to be completed in the same amount of time the more control you give the provider over the project or the outcome of the work, from staff management to complete control of the process.

Use Cases for Outsourced Product Development

Cloud Migration

Regardless of how big your product is, cutting costs and enhancing digital security are the cornerstones of a strategy that will benefit both your customers and profit growth. Cloud migration, which enables you to transmit the necessary data to a cloud computing environment, is one of the SaaS-based product development aspects that you can outsource. First, by only paying for what you use, cloud migration services allow your startup to cut down on hardware maintenance costs and avoid expensive data center support costs. Second, you receive the automatic backup feature and primary metrics logging that are necessary for disaster recovery. In order to prevent similar experiences in the future, the logs will assist your startup in identifying crucial issues and their root causes. Third, moving to the cloud enables greater flexibility and improved teamwork between product teams. No specific location is required to deploy, update, or resolve problems.

MVP Development

Your startup’s product development process must include a minimum viable product stage. A Lean Startup methodology approach called an MVP enables you to create a product with just enough features to deliver the key value while spending the least amount of time and money possible. So let’s talk about the advantages of outsourcing MVP product development.

A minimum viable product is a great way to gather feedback and test your product idea, to start with. Only the essential features need to be developed, early adopters must see your constrained product version, and feedback on the value proposition must be gathered.

Second, time and money savings are important when developing a product MVP. It enables you to test the value proposition prior to creating intricate functionality that necessitates substantial investments.

  1. Do clients appreciate the value you provide?
  2. Would they pick your product over those of your rivals on the market?

To decide whether to build a fully functional product or alter your business concept, you should receive clear answers to these questions.

Even among the top product companies, outsourcing MVP development is a common practice. For instance, Google chose to outsource SaaS product development for the AdWords phone and email support MVP despite having 90,000 in-house developers in order to reduce costs.

Concierge Service & Support

No matter how fantastic or flawless your product is, after the launch, it will undoubtedly have bugs and problems. Now that tech support and concierge services are available, you can outsource them to outside vendors so you can concentrate on the constant delivery and improvement of your product.

CRM Development and Consulting

It’s crucial to respond to requests quickly, easily, and effectively once your product is launched and beginning to draw customers. The best way to manage your product leads and customers is through customer relationship management systems.

Therefore, you can outsource CRM consulting or development to get a customized system that perfectly suits your business operations and processes.

What advantages do outsourcing CRM product development have for your startup?

  1. Contact information organization
  2. More effective customer segmentation
  3. Fast and straightforward creation of sales reports
  4. Analytics dashboards with a wealth of features and ease of use
  5. Being able to predict sales.

These ideas are essential for your startup because they help you expand your customer base, boost customer retention, and increase sales. So why not outsource the creation of CRM?

How is outsourced software product development different?

Digital product development firms have a much broader range of activities than software outsourcing firms. It contains:

How is outsourced software product development different
Figure 4. How is outsourced software product development different

Strategy Phase

The key to the venture’s success is careful planning of the product concept. Considerations such as business value, UX design, development strategy, and product release should all be made. Why does the world need your product? is a key question that product strategy must address to keep employees motivated and on the same page. Even though it may sound cliché, projects that are in line with an organization’s strategy have a 20% higher success rate than those that are not, according to PMI studies.

What happens to the application after it is released, including customer support and product updates, is also crucial. A well-planned strategy allows the client to estimate the amount of labor the product will need once it is released on the market.

Discovery Phase

The harsh reality of product development is unspoken. Our world is complicated and filled with a lot of uncertainty. However, there is hope at the end of the road. You can use the experience of a reputable digital product development company to assist you in handling it. We will discuss a few of the numerous tasks involved in the product discovery phase.

The work on the product strategy is inextricably linked to user and market research. User research that identifies potential customers’ expectations is also crucial. Finding out who the product will be targeted at is the goal of user research, which aids in the development of so-called personas. These are the characteristics of the application’s anticipated users, including their demographics, interests, lifestyles, and professed values. With this, you can ascertain who will receive the product.

Using market research, you can learn what customers expect. Competition testing, however, is also crucial. You should research the types of solutions that competing businesses are utilizing and evaluate their software. You can then specify any product attributes that might give it a competitive edge.

It is possible to predict what your product will be based on research and strategy. The fundamental features of the application are shaped by requirements analysis, user-defined personas, and archetypes.

User flow research, or the path a user takes from their first interaction with an application through the entire process of using it, is another aspect of the discovery phase.

The user flow survey makes it possible to create an application that will be simple to use without extraneous obstacles and distractions.


Digital product development companies prepare for development by creating an application mock-up. In this way, the hierarchy and relationships between the program’s elements as well as the structure of the program can be established. Although there are prototyping tools that will enable you to create a design similar to the future shape of the application, the mock-up is typically a simplified scheme. This will enable the digital product development company to demonstrate the functionality and design of upcoming software to you.

To design the application interface and visualize previously made project assumptions and their functionalities, a mock-up is made. Before beginning development, the contractor has an opportunity to consult with you to understand your requirements better. The mock-up also lets you test out potential solutions.

Delivery Phase

Waterfall and Agile are the two main methods used in software development. This phase may look very different depending on the framework you and your partner decide on. Waterfall refers to fixed scope, budget, and time. It takes a lot of work upfront, and changing your assumptions can be expensive. Even though fewer and fewer businesses are choosing this route today, it is still utilized in some projects.

The Agile movement, on the other hand, is very popular and includes frameworks like Scrum, Kanban, Lean software development, and others. Here, iterative development, change adaptation, and early hypothesis validation is given the most importance.

No matter which one you select, the activities are the same. This indicates that technical analysis, code implementation, peer code reviews, application testing, user acceptance testing, and deployment are to be expected in both scenarios. Your technology partner should explain these factors to you and go over which ones you should adapt in order to determine which activities are essential.

Process of Outsourced Product Development: Explanation

In comparison to managing an internal team, outsourcing to offshore software developers may be less challenging. You are not required to direct the team of developers’ work or coordinate it. You will nevertheless need to oversee the offshore development team, keep an eye on things, and give timely feedback.

Here’s how to begin hiring your first developer who works remotely.

Process of Outsourced Product Development
Figure 5: Process of Outsourced Product Development: Explanation

Step 1 – Define Your Goals

Before you start looking for potential offshore developers to work with, be clear about your requirements. Others may want to add new features to already existing software, while some founders are looking for expertise to build an app from the ground up. Make a list of the requirements for your project so you can find a vendor with the right experience or skill set.

Step 2 – Choose A Partner

There is no shortage of companies that specialize in software development using the outsourcing model. Due diligence must be done to locate one who exhibits reliability and has a strong track record. Verify customer testimonials to make sure they support the information the candidates have provided you.

Step 3 – Choose A Model Of Collaboration

To help startups stay competitive in dynamic environments, outsourced development companies typically offer a variety of models. Choose whether a fixed-cost, time-and-materials or hiring a specialized team is the best option for you. When selecting an outsourcing model, take the project’s volatility, timeline, and financial implications into account.

Step 4 – Agree On Communication Rules

It is crucial to have constant, clear communication to make sure that your project is developing according to the predetermined timeline. Only when both parties accept a specific communication framework is this possible. For instance, deciding on a communication channel like Slack and creating a schedule for progress updates.

Step 5 – Formalize The Partnership

When you’re happy with a specific vendor, it’s time to sign an agreement and clearly state the terms. Before beginning the collaboration officially, make sure that both parties are aware of the contract.

What does a company that outsources software do?

Companies that outsource software concentrate on writing code for games, web/mobile applications, and websites. Simple pages for websites can be successfully created with a free CMS like WordPress. More complicated projects (in terms of the number of subpages and how they look) typically require a custom CMS because they require a more unique approach and proprietary functionalities.

A web app can be accessed from a variety of devices and is opened in a browser, similar to a traditional website. But for programmers, there is a clear distinction between a website and a web application. The latter includes intricate functionalities like login pages, user profiles, etc., and requires much more careful planning because their range is typically quite broad. To meet the needs of the project, developers must be knowledgeable of a variety of frontend and backend technologies. Most modern web applications are built using JavaScript, which enables them to maintain speed and lightweight performance despite having a feature-rich user interface.

Another area of expertise for software outsourcing companies is mobile applications. Mobile applications are a necessity for many users due to the widespread use of smartphones and the accessibility of the fast Internet. In this situation, businesses specialize in developing applications for particular operating systems or utilizing various methodologies. Native, semi-native, hybrid, PWA, and RWD applications fall under this category.

Software outsourcing companies also engage in the creation of business intelligence tools. Only when the data is properly stored and analyzed can large organizations fully realize the potential of the data that has been collected.

Software outsourcing firms frequently employ a team augmentation model. In actuality, it means that you should get in touch with these businesses if you already have a team but you need more workers. This strategy is sometimes referred to as “body leasing,” and that is how you should handle it. Likely, there isn’t enough time to comprehend a domain because this relationship is typically time-bound fully. To ensure that developed portions of a product will meet users’ needs, a well-prepared specification or task list is required.


Choosing an IT outsource team to deal with your company’s Software Development requirement is always recommended, especially if you are a startup or just building a company when saving business costs is always a priority.

Sources: Internet