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In these recent days, outsourcing businesses have been at their peak. As a result, outsourcing Software Development projects are now trending.
a team doing outsourcing software development
  • 19 Jan 2023
  • 0

A Basic Guidance For Outsourcing Software Development Projects

In these recent days, outsourcing businesses have been at their peak. As a result, outsourcing Software Development projects are now trending.

Are you planning to outsource your projects to an offshore software development company? Of course, but are you concerned about the cost?

Do you know that companies who outsource most of their website or mobile application projects save up to 60% without compromising the quality?

To clarify, let us understand that a senior skilled developer in the USA charges $75 to $125 hourly. In contrast, the same skilled developer will charge $30 to $40 per hour if they belong from Ukraine.

There is an old saying “you get what you pay for”. Outsourcing software development is the same thing. As per ISO, outsourcing is the best way to develop software as it reduces the cost by 15% and enhances the quality. Moreover, it offers many advantages like quick results with greater control and flexibility followed by the best of talents working on your projects.

In this article, you will learn all about outsourcing software development projects. The cost will be discussed region-wise. Deciding which region you want to outsource your projects to will be easy. Also, the pros and cons will be mentioned so that you can clearly understand outsourcing.

What is the outsourcing of Software development?

Outsourcing Software Development means transferring the responsibility of development from scratch to release on someone else’s shoulder. You will be one who will be concerned only about the outcome, or more precisely, and you will give your time only to check the results and approve. All the glitches, pressures, and hard work will be the concern of the outsourced company. They will be the ones who will make sure that you are getting your platter on time.

Thus outsourcing has become the best scope for availing the best of talents with utmost flexibility and high quality.

one person seat and doing offshore software development

What are the different methods of outsourcing software development projects?

Now that we know what outsourcing software development looks like, let us discuss the different outsourcing methods. Be careful when choosing your outsourcing partner because only the right approach will determine whether your deal will succeed. So, there are only a few ways you can outsource your projects:

Software Development Companies:

Most organizations required to develop software outsource the project to a website design agency or a software development company. Most organizations prefer a Software Development Company because apart from having the best talent, they also have a reputation from several other clients. Moreover, being a company, they have an ongoing reputation to maintain; hence there is a high chance of meeting the deadlines.

Organizations that generally outsource software development projects will also outsource the maintenance to the same company. Therefore, if you plan to outsource your software, you can be assured that you can save time thinking about the development and maintenance of the software throughout its life cycle. Instead, you can free-mindedly concentrate on other important aspects of the organization.

Software Development Freelancers:

Hiring freelancers is mainly preferred by start-ups or SMBs. You can hire single or multiple software developers hourly or weekly. You need not hire a full-time employee; hence you will save a lot of money you generally spend on your employees. Both parties will only be concerned with the work and the payment. He will deliver the project, while you will be responsible for his timely payment. No other commitment is needed.

Generally, outsourcing to freelancers costs much less than a Software development company. However, they both have some pros and cons.

How heavy will outsourcing be on your pockets?

Asia: Asia is currently leading the race of IT service providers as the world’s largest IT Talent pool. Asia has the best web development company that will deliver the best work at an affordable price. The rate chart for developing software starts from as low as $10. However, rates are quite high for custom development software.

When we talk about the cost, remember that the cheaper you look for, the more low-quality product you will get. But, contrary to this, don’t assume that a high price will give you high-quality products. So, always research and analyze before you outsource.

Within Asia, India and China are the hub for IT industries. Indian developers generally charge between $16 to $52 hourly. In comparison, Chinese developers charge between $19 to $40. Apart from these two countries, other nations like Bangladesh, Indonesia, Malaysia, Philippines, Pakistan, and Vietnam deal with outsourcing projects.

Some Pros and Cons of working with Asian Countries:

Pros:

  • Low Rates
  • A large number of IT specialists

Cons:

  • Language and culture barrier
  • Differences in Time Zone
  • Differences in Trends and taste

Europe: The hourly rates for outsourcing software development in Europe range between $20 to $170. The best thing to outsource in Europe is their fluent English. Thus they can easily communicate with each other and can manage the software development process smoothly.

A few countries whose citizens are effectively working as freelancers are Ukraine, Romania, Poland, Bulgaria, Hungary, the Czech Republic, Belarus, and Croatia.

Some of the pros and cons are:

Pros:

  • Advanced skills at favorable prices
  • Convenient time zone
  • Large talent pool
  • Location and culture
  • Laws and regulations
  • Easy communication and a decent level of English
  • Fast and cheap broadband Internet

Cons:

  • Obscure taxation
  • The increased amount of communication time

America: The hourly rates in America are quite high. The rates range between $50 to $200 hourly. Due to high rates, most organizations do not prefer to outsource to America. No wonder there are fewer outsourcing companies compared to other regions.

However, there are still companies in Latin America with some affordable rates. Brazil, Argentina, Mexico, Columbia, Peru, and Chile are some of them. In addition, some of the USA population prefer outsourcing software development projects to Latin America due to their close location and less difference in time zones.

If you hire any offshore junior software developer from Latin American countries like Mexico or Brazil, the charges range between $7 to $15 hourly. However, you may need more quality work. The best is to choose something other than extra cheap or budget-friendly freelancers or outsourcing companies. The average quality of work available is around $30 hourly for junior developers and $50 hourly for senior developers.

Some of the pros and cons are:

Pros:

  • The time zones are with less difference.
  • A suitable environment for business
  • The outsourcing market is growing very fast
  • Proficient in English
  • Compatible cultures

Cons:

  • High rates as compared to other nation
  • Hidden cost in the bill
  • The rules and regulations are not familiar
  • Risk of information leak

Africa: Africa has been doing well in outsourcing services in recent years. The hourly rates in Africa range between $20 to $50 hourly. Due to the low cost of labor rate, Africa is becoming the new destination for organizations to outsource software development projects.

Only a few African countries are in the IT industry, like South Africa, Kenya, Nigeria, Egypt, and Morocco. They are also popular for responsive web design services. They have a few freelancers and companies who can provide you with the most creative and responsive websites and other services like software development at the best prices.

Some of the Pros and Cons are:

Pros:

  • Software outsourcing rates are low
  • Speed of development is very high

Cons:

  • The number of IT specialists is low
  • Backdated Technological Stack
  • Privacy and security laws are not up to the mark
  • Communication times are lengthy

Other factors affecting the cost of outsourcing software development.

Size of the Software:

The cost of developing software depends on the size of the software.

Small Size: If you want to build a basic software with very limited features, it is called a Small size software. These are generally very affordable in cost.

Mid Size: The mid-size software are the same basic software with some added features. These software are also affordable but slightly higher than small size software.

Large Size: Any software development projects which require complicated coding, add-on features, and custom app development are known as large-size software. This software is really expensive.

Type of the Software:

Apart from size, this is important in determining the price. There are two types of software:

New Software: This is the development of software from scratch. It requires more time; hence the cost is also higher.

Software Modification: If you already have an existing software and want to update or modify it, you fall into type two. In this category, total costs are comparatively lower.

Hopefully by now all your queries related to the cost of outsourcing software development projects are answered. We, SwadeshSoftwares, have been working on many software development projects and doing business website design all around the globe. Therefore, if you plan to outsource your project, we can greatly help. We have taken numerous outsourced projects, and to date, we have successfully delivered all of them within the deadlines.

FAQs:

  • Is outsourcing software development projects right for my company?

Ans: Outsourcing can give you a good ROI. It is a proven way of virtually increasing any company’s profitability and performance.

  • What is the average ROI % for outsourcing software projects?

Ans: Most decision-makers estimate an ROI of 30% during outsourcing. But as per research, The ROI reaches 50% at times. Therefore, by outsourcing, companies can save huge amounts on labor costs for training, development, and implementation.

  • Do I need to visit my outsourcing partner?

Ans: If the outsourced project is small, visiting your outsourcing partner may be an unnecessary expenditure on your balance sheet. But if the outsourced projects are large, a few visits can be fruitful and may be necessary.

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