Find out how to successfully outsource an IT development team. Discover why this approach benefits your business and which aspects you should consider.

Outsource Software Development

More startups, small and medium enterprises, and corporations are outsourcing software development. This practice means hiring third parties to create software solutions. Why is outsourcing beneficial for the client? Such an approach is cheaper and more efficient than selecting developers yourself. And it has become common practice. Statista forecasts the global IT outsourcing market will grow by 10.99% between 2024 and 2028 and reach a market volume of US$777.70 billion by 2028.

Our experts at EXB Soft prepared a brief for you. Here, we delve into the intricacies of custom software development outsourcing, reveal crucial considerations for successful collaboration with external development teams, and more. Discover the various benefits of this practice. You will understand how outsourcing software development can push your business forward.

Process of how to successfully outsource software development

Outsourcing differs from outstaffing, which focuses on individual developer placement. The first one involves delegating complete project responsibility to a specialized IT company. This partner acts as an extension of your team. The firm you selected handles everything. They cover aspects from talent acquisition to project management and administrative burdens. You only receive completed deliverables. Outsourcing helps you to free up your resources to focus on other business processes.

For digital enterprises, outsourcing software development unlocks many benefits:

  • Rapid launchpad: This approach enables startups to meet tight deadlines and reach the market quickly, which can be crucial for seizing fleeting market opportunities.
  • Cost-effective development: Outsourcing helps to reduce software creation expenses. The client can free up valuable resources for startups. Entrepreneurs can invest their budget in other fields, such as marketing. Creating an in-house IT team will cost you much more.
  • Global talent pool: The world becomes your hiring ground. Startupers can tap into a huge pool of expert development teams. You can access rare skill sets that might be difficult to find within your region.
  • Scalable expertise: One of the pros of outsourcing lies in its flexibility. Startups can use team extension services as project needs evolve. The client will receive the expertise required at the specific stage.

Software development outsourcing has many merits, including enhanced efficiency, heightened product quality, and reduced costs. However, successful IT development outsourcing necessitates thorough preparation. You should build a robust outsourcing strategy, the initial step in picking a partner to fulfill your requirements. The issue remains: How do you build such a strategy?

Define your objectives

You are ready to start your search for a software development partner. But before you do, find time to determine your project goals. What are you expecting to achieve? Who are your target users? Defining your objectives is the foundation for a successful outsourcing experience.

Prepare comprehensive scope of work documentation

Outsourcing companies rely on clear communication to understand your project. Having a well-prepared scope of work document acts as a bridge. It is an effective way to convey your vision and unique requirements.

Define your technology stack

Your chosen vendor should have a technological profile aligned with your product's needs. We recommend creating a comprehensive list outlining the specific resources your project demands. It will help you ease your search. Seek expert advice on technology consulting services. It is preferable to get opinions from different vendors. Their views will provide valuable insights and guidance for making informed decisions.

At EXB Soft, we will help you determine the tech stack that aligns with project requirements. Our professionals will also provide you with a cost estimate and timeframe. Connect our project manager, share your idea, and we will analyze the market for your produ

Enlist an experienced engineering leader

Establishing an engineering team begins with a proficient leader. They should have the tech expertise and be able to select the required technology talent. A strong leader manages remote teams and ensures effective team coordination. A top specialist guides clients and safeguards against quality assurance issues.

EXB Soft serves as a genuine software partner that maintains dedicated development tracks. We ensure a talent pool for the engineering leader position. Our engineering leaders excel not only in technology and team management but also in working towards the long-term success of our clients across all levels. Turning to EXB Soft, you can hire a part-time senior developer. It enables you to test collaboration for a small number of tasks.

What to consider before you outsource software development

Below, we have mentioned the key aspects to consider when making outsourcing decisions.

Industry expertise evaluation

Evaluating an outsourcing firm's industry expertise is crucial. Consider thoroughly assessing their track record, portfolio, and client reviews. Make sure your aims are well-aligned with the vendor's processes. Analyze their past projects, client feedback, and achievements. It will help you gain perspective into their capabilities and credibility. For example, you must develop a healthcare or secure insurance web project. Then, check if the partner has relevant cases in their portfolio.

Cost vs quality

Price is a significant factor in outsourcing decisions but should not be the only determining aspect. Focus on something other than the lowest cost. Preserve a balance between quality and cost. Consider the unique selling propositions of potential providers. You can choose trusted firms like EXB Soft that offer outsourcing consulting support. There, pricing goes hand in hand with quality standards and strategic support. This approach empowers your project to thrive.

Quality talent

Select an outsourcing partner with a skilled and proficient workforce for product success. The team should include more than just a pool of talented professionals. They need to be able to run a dedicated development team. Streamlined project supervision and effective collaboration enhance the quality of the outsourcing engagement.

Infrastructure and IT support

Outsourcing work efficiency relies on the provider's technology and infrastructure. Confirm that the outsourcing firm utilizes the latest and proven technologies. They must also be able to develop a well-equipped infrastructure.

Risk management at software development outsourcing

Outsourcing involves certain risks, ranging from operational challenges to data security concerns. It is crucial to pick an outsourcing provider with a robust risk management plan. This plan should include regular assessments and proactive strategies for mitigating unforeseen circumstances. The team should be committed to maintaining project stability and continuity.

Service-level agreement (SLA)

Before finalizing any outsourcing arrangement, review and ensure the clarity of the SLA. The service-level agreement should have clear and specific terms, leaving no room for ambiguity in roles, responsibilities, and expectations. When necessary, seek legal guidance to guarantee that the SLA is right. This agreement should protect both parties' interests.

Risks of outsourcing and how to prevent them

Outsourcing software development offers many advantages but has potential risks. Here, we'll explore some common pitfalls and strategies to navigate them:

Communication barriers

Geographical distance and cultural differences may require clarification in communication. Therefore, you should establish clear communication protocols. Project management, video conferencing tools, and regular meeting schedules may comprise these protocols. Since the launch of EXB Soft, we've collaborated with various clients globally. Their geographics include Europe, the USA, Australia, and Canada. This experience has equipped us with a greater understanding of international business cultures. We know how to navigate cultural obstacles effectively.

Loss of control

Handing over development to an external team can feel like relinquishing control. Apply a transparent workflow with regular progress updates and maintain open communication channels. It will help address any unexpected concerns.

Quality issues

Inconsistent quality standards can result in different problems. These include bugs, compatibility challenges, or features that do not meet expectations. Define clear quality assurance (QA) procedures upfront. It is better to turn to a company like EXB Soft that utilizes an agile development approach. Agile goes with frequent testing phases. This flexible software creation method helps to identify and address issues early on.

Intellectual property theft

You should consider saving sensitive data or proprietary information. A non-disclosure agreement (NDA) will help you protect your intellectual property rights.

Scope changing

Project requirements can change over time, leading to delays and cost overruns. Determine the project scope in the initial agreement and establish a flexible management process to address any modifications.

Keep in mind potential risks and apply these mitigation strategies to prevent them.

How to select the best outsourcing provider

Here's a blueprint to guide you in selecting the provider that aligns with your needs. Follow these steps to identify the best outsourcing partner.

Parameters to look for in a tech partner

After creating a shortlist of potential partners, delve into their portfolios. They provide invaluable insights into the team's qualification in the following aspects:

  • Technical expertise: Assess their experience with technologies relevant to your project.
  • Industry experience: Look for a company with a proven reputation. They should have expertise in your specific area.
  • Design and development style: Check the provider's past works. It will help to ensure their designs and functionality meet your expectations.

Vendor interview questions

Prepare a list of questions tailored to your project requirements. Here are some key areas to explore before you hire an outsourcing partner:

  • Management approach: Understand their approach to managing projects. Ensure its alignment with your preferred workflow (for example, agile or waterfall).
  • Communication strategy: Discuss their communication protocols and preferred communication methods, which include video conferencing tools and project management software.
  • Team composition: Inquire about the team's experience and qualifications. The specialists should have the necessary skills for your project.

Types of pricing contracts when outsourcing IT development

Outsourcing providers offer various contract structures and pricing models. The most common choice is between time and materials vs fixed price options. Here's their breakdown:

Fixed price contracts


  • Budget certainty: This model establishes a set fee for the entire project upfront. The fixed price model provides peace of mind and lets you confidently plan your budget.
  • Predictability: The team set fixed timelines alongside the fixed price. It fosters clear expectations for project completion.


  • Limited flexibility: Fixed-price contracts can be rigid. Sometimes, the project requirements change during development. It can be difficult and costly to accommodate these modifications.
  • Upfront planning: For this model, defining a precise and detailed scope of work is vital.

Time and materials (T&M)


  • Adaptability: This model offers the highest flexibility. You spend money on the resources used and the team's work time. This approach allows you to adjust the project scope and features as needed.
  • Ideal for evolving needs: This approach is well-suited for projects with shifting requirements. It is also suitable for those that may change throughout the development lifecycle.


  • Potential cost overruns: There's a risk of exceeding the initial price. It can happen if project complexity increases or the team extends timelines.
  • Project management: You must track progress and resource allocation. Otherwise, you may face cost surprises.

There is also a hybrid pricing model that bridges the gap between fixed price and T&M contracts. The optimal pricing model depends on your project's specific characteristics.

The best workflow when working with the outsourced development team

What is the cornerstone of how to successfully outsource IT development? A well-defined workflow. Below there are key strategies to foster efficient project creation and seamless communication.

Define clear communication protocols

Outsourcing custom software development offers exciting benefits. However, the physical distance between you and your team requires a communication strategy. Open and consistent dialogue is paramount. Collaborate with your outsourced team to establish preferred communication channels. These can include email, instant messaging platforms, or project management solutions. While these methods are valuable, consider incorporating regular video calls. They foster a stronger connection, promote clearer understanding, and facilitate more productive discussions.

Keep your outsourced team briefed about project goals, expectations, and strategies. Everyone should know what to do and work towards the same objectives. Communication shouldn't be one-sided. You need an environment where both the team and you feel comfortable.

Leverage project management tools

Choose robust project management tools. They should help to track progress, manage tasks, assign deadlines, and more. Here's a look at some popular options:

  • Trello: This intuitive platform lets you create thematic boards. You can organize tasks into lists and track progress by moving cards across stages. Trello facilitates seamless team collaboration with specific features. They include assigning team members, setting deadlines, and adding comments on tasks.
  • Asana offers a straightforward approach to managing outsourced projects. It helps break down big projects into manageable tasks and subtasks. Assign them to team members and track their completion. Attach relevant files, add comments, and ensure everyone stays up to date.
  • Jira: For a robust solution catering to agile methodologies, consider Jira. This powerful tool allows for detailed issue tracking, sprint planning, and backlog management. Jira offers features like comment sections, task assignments, and progress reporting. Its functionality is ideal for complex projects with evolving requirements.

There are a few examples of tools for effective outsourcing of software development.

Embrace agile development

Consider adopting an agile practice for project development. At EXB Soft, we also prefer this approach over the traditional one. Agile helps us break down outsourced software development projects into smaller sprints. This approach enables continuous feedback, iteration, and faster adaptation to changing needs.

Agile must also place the client at the center of the creation process. By participating in each sprint review, the orderer provides valuable feedback. That can shape the project's direction. Thanks to the agile approach, the outsourcing team fosters a collaborative environment. There, everyone works together to achieve a successful outcome. Regular testing phases in the agile development process help find issues early on, avoiding costly rework later.

Assign a dedicated point of contact

Your team's contact person will be the outsourcing partner's liaison. It will simplify streamlined communication and help avoid confusion. You should have a good understanding of the project development phases and changes.

Maintain a culture of feedback

Encourage a culture of constructive and open feedback. Provide regular feedback to your outsourcing partner on their work and be receptive to their feedback as well. Acknowledge and celebrate project milestones together. It helps maintain team morale and creates a sense of shared accomplishmen

Apply these practices and establish a robust workflow. It will help foster seamless communication, efficient collaboration, and a successful outsourcing experience.


Embracing the opportunity to outsource your software development needs to EXB Soft can be a game-changer for your business. As we've explored in this article, the benefits of outsourcing—ranging from cost savings and access to a global talent pool, to the flexibility and rapid deployment capabilities it offers—are too significant to overlook. EXB Soft stands ready to provide you with top-tier software development services tailored to your unique requirements. By choosing us, you're not just hiring an external team; you're partnering with professionals who are deeply committed to pushing your business forward.

To take the first step towards transforming your software development journey, we invite you to reach out to EXB Soft for a no-obligation quote or consultation. Let's discuss how we can turn your project ideas into reality, leveraging our expertise and the latest technologies to achieve your goals. Contact EXB Soft today, and let's embark on a journey towards success together.

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Software development is a group of computer science tasks involved in developing, deploying, and maintaining software. The set of instructions or programs that a computer follows is known as software. It makes computers programmable and is independent of hardware.

When businesses decide to have a third party develop their own software solutions, this is known as software outsourcing. There are several benefits to outsourcing software development, including decreased costs, increased effectiveness, less risk, and improved security.

By opting for the benefits of outsourcing software development, you'll not only have access to a larger pool of talent, but you'll also get them for less money than you would pay domestically. With this approach, you may increase the caliber of your staff while saving money on training.

The two most popular types of outsourcing in Software Development are Staff Augmentation and Dedicated Teams.

Here are our three stages for outsourcing software development, which should help to ensure that your project runs smoothly:

  • Clarify the project you are building.
  • Your software project needs a scope statement, so write one.
  • It's time to make a decision about outsourcing or not.
  • Select the best outsourcing option from onshore, offshore, and nearshore.
  • Select a model for outsourcing.
  • Choosing the Best Companies.
  • Assess the providers.
  • Make a Free Consultation Request.
  • Draft the paperwork and sign it.
  • Select the communication technology stack.

A software development business will cost you between $25 and $45 per hour if you outsource your job to them. Depending on the skill set of a specific offshore developer, you can expect to pay a middle- or senior-level dedicated developer an average of $20 to $50 per hour.

Outsourcing is frequently less expensive and can free up resources for other elements of the organization when compared to hiring numerous people and investing in pricey equipment. It can also produce a new business partner. In order to cut expenses, many businesses outsource particular tasks.

The most frequent type of outsourcing is business process outsourcing. It means hiring a third-party service provider to handle any business process. This kind typically deals with routine work like administrative and customer service jobs.

You can bring in a lot more people for a lot less money if you outsource your development. That's because they will be hired on a non-permanent basis, and the benefits, taxes, and holidays will be taken care of by the company you hire. It's a win-win!

Today, organizations all over the world are turning to outside suppliers to supply essential solutions to ease the burden on internal workers, which has led to an increase in the outsourcing of software development. Payroll processing, social media marketing, customer service, accounting, and other activities are frequently outsourced.

Partners in the creation of outsourced software frequently create teams in locales with cheaper labor costs due to lower living expenses. In addition, businesses avoid making large, expensive initial investments in infrastructure, development tools, and licenses.

If you decide to use the benefits of outsourcing software development, you'll not only have access to a larger pool of talent, but you'll also be able to hire them for less money than you would pay locally. By using this strategy, you may increase the caliber of your team while saving money on training.

The main risks of outsourcing software development are:

  • A lack of coordination between the parties.
  • Accepting the lowest offer.
  • Unclear expectations for delivery.
  • Hurriedly making the switch to outsourcing.
  • Outsourcing decisions that fail to consider business culture

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