Category: Blog, Business, Cost, Outsourcing

Outsourcing App Development – Benefits & Risks for App Owners

What are the reasons for you to consider outsourcing app development projects? What risks should you be aware of, and how to avoid them? Nearshore or offshore mobile app development outsourcing? Read now and find out!

Editor’s note: This article was originally published in 2019 and updated in December 2022.

Benefits of outsourcing software development

Working with an in-house app development team is excellent – you’ve got constant access to the project’s status, you know app developers personally, and it’s easier to deliver feedback and introduce changes… But. It’s also more expensive, time-consuming, and challenging than ever.

Talented software engineers are highly sought-after on the market, and smaller companies often need help to compete with large organizations or specialized software development agencies.

That’s one of the main reasons why so many mobile app owners decide to team up with third-party partners and outsource app development to external teams.

In this article, we take a closer look at the trend for outsourcing mobile app development: its strategic benefits, the most critical risks, and tips on how to avoid them.

Read on if you still need to decide whether you’re ready to trust an app development outsourcing company with your next software project!

What is outsourcing in app development?

Let’s start with the definition.

A company looking to build a new mobile or web app can choose from two basic options:

  • Hiring an app development team to work on the project in-house (a.k.a. on their own)
  • Outsourcing the entire process of development to another company.

Of course, there are more solutions. For example, you can build your in-house team and hire outside specialists whenever your project needs extra support, but these two are central.

According to Gartner, a leading research and advisory company, IT outsourcing is “the use of external software development service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes. “

Why outsource app development?

Application development outsourcing is increasingly popular because it enables companies to take advantage of the technology at a reduced cost, greater flexibility, and higher efficiency.

By teaming up with an external provider, you benefit from all the experience and skills their teams have gained while realizing development projects for clients across various industries. Outsourcing app development allows you to :

  • reduce development costs
  • accelerate your time-to-market
  • benefit from external expertise, assets, intellectual property, and more

5 key benefits of outsourcing app development

Outsourcing app development companies comes with many benefits – here are the most important ones:

1. Outsourced app development cost is usually lower

Reduced app development costs are by far the main benefit of working with outsourcing companies.

Recruiting talented IT experts is time-consuming and costly. Once hired, an in-house app development team generates a range of expenses – from the costs of attracting and recruiting candidates to the overhead expenses related to the office infrastructure, workstation, holidays, or sick days.

Hiring a dedicated team managed by an external outsourcing development company allows you to enjoy access to top talent and expertise without having to worry about the costs of employing specialists full-time.

More importantly, if you outsource app development to a third-party partner, you are no longer limited to your immediate proximity. As such, you can work with app developers from cheaper regions, such as Eastern Europe, saving a lot of money without sacrificing the quality of the final product.

2. The flexibility of application development outsourcing

Outsourcing allows scaling a development team up or down quickly to help your business stay nimble and respond to the changing business requirements.

Doing the same with an in-house team takes much more time and generates higher costs. Moreover, scaling an in-house team down would mean firing employees, potentially ruining team morale and the company’s reputation as an employer.

3. Speedy app development

Building an internal team of software developers takes much time. In our experience, you need around three months to source, attract, and hire top talent. This means that an entrepreneur would have to wait several months before the team is assembled and ready to start working on the app.

By outsourcing the development process, business owners can accelerate their app’s time-to-market because a specialized provider can set up a team of tech experts in just one or two weeks.

4. Battle-tested processes

IT outsourcing providers offer access to teams that have worked on multiple projects and written a significant number of applications.

As a result, an outsourced team comes with a well-defined process and workflows that keep everyone productive and speed up the development process, ensuring top quality at every step of the project.

5. Access to top talent

As IT companies expand, they become part of increasingly ambitious and demanding projects. That’s why they hire top specialists in their fields. They need an expert workforce to meet the demands of their clients.

By outsourcing your app development project to such an agency, you gain access to skilled engineers whom the company has vetted, and their skills have been battle-tested in many different projects.

Even if you hire a team that includes 10 employees out of 100 people hired by your provider, you can be sure that your team takes advantage of the provider’s entire intellectual capital. People in your team will surely be reaching out to other company employees for feedback or advice. This type of internal consultation is very valuable, and it doesn’t even appear on your bill when going for outsourced services.

Wojtek Szwajkiewicz
CEO, Droids On Roids

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5 risks of outsourcing app development

Of course, every solution comes with its pros and cons. We’ve discussed the benefits of working with outsourcing companies, so now it’s time to move to the potential pitfalls.

Here are the key risks of outsourcing software development you should know before teaming up with an external team.

Please note that choosing a reliable and trustworthy outsourcing company helps to avoid most of (if not all) the risks we mention below.

1. Messy code and documentation

Sometimes outsourcing clients switch from one development team to another or continue working on the product independently. In such a scenario, code quality plays a crucial role. There is a high risk that the previous developers didn’t create appropriate project documentation or produced a solution that is difficult to scale.

As a result, transferring your project to a new team can be riddled with challenges or even impossible – then you have to rewrite your app from scratch. This, in turn, delays your application’s release date and generates unplanned costs.

2. Business risks

IT companies aren’t immune to the typical risks all businesses face.

Just like other companies, they can fail, go out of business, or be forced to reduce their scale of operations dramatically. Partnering with a software development agency that experiences such a challenge poses a massive risk to your project because you might end up alone with a half-finished product.

3. Lack of control over the team

Many business owners think that they will lose control over the project once they outsource app development to another company. This fear is, in part, justified.

Delegating the critical task of app development with a high business value seems risky because many things can go wrong and you might have limited or no ability to fix them.

But in reality, a development team that follows standard best practices like the agile methodology of project management guarantee frequent communication and feedback opportunities during retrospective meetings.

Experienced providers have processes in place that ensure close participation in the project to the point where clients get to feel like part of the team and stay in constant touch with app developers.

Moreover, outsourcing companies often invite clients to visit the project team on-site and offer extensive reporting to keep everyone in the loop.

4. Time-zone differences and communication problems

Another potential risk comes from teaming up with a provider located far away, in an entirely different time zone. Here, the seemingly cost-effective app development project you expected to save you time and money might turn into a nightmare.

Managing a project with an offshore team sounds challenging, but experienced providers are prepared to deliver optimal services regardless of their client’s location.

This becomes particularly challenging if you work with independent app developers and not an office-based outsourcing company. If that is the case, you only have two time zones to manage – yours and the provider’s.

5. Lack of engagement

An in-house team is motivated to drive the product to success; there’s no doubt about that. You can monitor the team’s morale and intervene when necessary.

But what happens when you hire an app development outsourcing company? Will all the team members be just as enthusiastic about your product and business idea?

These are common questions among entrepreneurs who are considering to outsource app development.

TIP: The solution to this problem is teaming up with a provider offering dedicated teams where each member works exclusively on your projectProactivity is a crucial feature to look for among the company reviews you should browse when outsourcing mobile app development.

How to avoid risks and outsource app development successfully?

First of all, choose a reliable, experienced, and professional IT outsourcing company. You know, like Droids on Roids! How do you do that? We’ll get to it in a second.

But before we do that, let’s see what else will help you to avoid the risks of outsourcing development:

  • Pick an outsourcing company located in a country without war or crisis. If you’d like to meet the team in person, choose a company that you can easily reach (preferably in a city with an airport).
  • Make sure it has been in operation for several years and is well-established on the market. If you want to outsource your project to a new team of app developers, ensure their work standards match yours.
  • Make sure that your project documentation is accurate and code quality is high. If you have doubts, consider hiring another company to perform a code review. Successful project management depends on accurate documentation, so you might want to be extra vigilant with it when you outsource app development.
  • You can protect your project from the moment of signing the contract with your provider – for example, by adding clauses that oblige the company to deliver specified materials upon contract termination or not to terminate the contract before an agreed time period.
  • To address the risk of data leaks, sign an NDA (non-disclosure agreement) and find out how the outsourcing company protects its assets against common cyber threats.
  • joint kick-off meeting will help you get to know the outsourcing team better (and vice-versa), build a sense of commitment, and feeling that you’re on the same side. Once you start the collaboration, visit the team at their office, if possible, and work with them in the same room for a while.
  • Make sure you will get frequent updates from your partner (e.g., during Scrum meetings). They will give you control over the project and budget and facilitate communication.
  • Ask your provider for reports to keep you up to date about the project’s progress (e.g., the team can configure a Jira dashboard for you where you will see reports showing summaries of worked hours, the team’s progress, or the predicted release date).
  • Learn what the provider’s development process & Quality Assurance looks like and how they address all the risks mentioned in this article.

Read also: How to Build a Minimum Viable Product – MVP Guide for App Owners

How to choose the right outsourcing app development company for your project?

If you’re thinking about how to start working with an outsourcing company, here are a few tips to help you choose the best provider for your project.

Use review sites

Check the company profile on specialized review platforms such as Clutch.co or The Manifest. Read the reviews paying particular attention to projects similar to yours – for example, realized for a client operating in your industry.

Check whether the outsourcing company has ever worked with a client from your country or many different countries. Successful offshore collaborations are a sign that the company has developed a solid process for handling time differences.

Check out the company website

Take a closer look at the company’s website, especially the sections related to the provided services and the portfolio. Again, it’s worth checking whether the app development company has delivered projects in your industry or to clients from your country.

Don’t forget to visit the section about the company/team. This is where you can usually learn about their culture, values, and people on board. See their office, events, and initiatives. It can also be an essential source of knowledge for you when choosing a software development partner.

Set up a call

Once you find a promising provider, schedule a meeting and ask them about the details of their app development process.

For example, ask about the Quality Assurance process and its key components such as automated tests, manual tests, and code review.

Review the provider’s communication practices, team composition, project management methodologies used to deliver projects, and experience working with clients from your location.

Would you like to learn more about choosing the right outsourcing partner? You can find some great tips in this article.

How to approach mobile app development outsourcing with minimal risks

So let’s say you follow our tips to the “T” and have set your eyes on some external development teams you want to hire.

What’s next?

Based on what you’ve already learned about mobile app development outsourcing, there are four steps you’d need to take next.

Settle on the main objective of your app development project

What is your primary objective in hiring a third-party mobile app development company?

Here, it might be a good time to revisit some of the business goals you’ve set for your mobile application.

  • What are your target audience and your target market?
  • Which features help your mobile application stand out from the competition?
  • How are you planning to monetize your app in the future?

There is a wide range of questions you could be asking yourself from the business standpoint, so make sure you focus on those that serve you best.

Double-check the development team’s credentials

When you are about to outsource mobile app development, you need to really trust your partner.

Focus on the important bits we’ve mentioned above, but also, don’t forget about the basics of app development:

  • app developers’ expertise
  • project manager’s credentials
  • the cost of working with a dedicated team
  • previous clients the app development company worked with
  • areas of expertise and experience with outsourcing projects, etc.

Establish and encourage open communication from the start

The project manager is your best friend for the foreseeable future. So make sure you connect with them as well as the app development team the best you can.

After all, it’s in your best interest for the people building your mobile application to care about it as if it was their own.

  • Ask the right questions (e.g., “How much does it cost to add Feature A?”)
  • Constructively deliver your feedback (e.g., “I don’t like Feature A because it contradicts our business value B”)
  • Make sure that the company you decided to outsource mobile application development to knows your vision and business goals

Seek transparency in relation to all app development costs

It is not cheap to build mobile apps. Neither is it to outsource application development. The overall development cost may be lower, yet you still need to be ready to pay for a quality product.

As such, it is important to ensure that the development team you’re working with doesn’t scheme around with hidden costs, surprise last-minute price increases, etc.

How to estimate the cost to outsource app development?

A decent partner will present you with the finalized project estimate at the early stages of development and openly communicate any additional changes to the cost of the project if any changes occur along the way.

Usually, the cost to outsource a project directly relates to the hourly rate of the development team, so there shouldn’t be many surprises there.

Of course, the mobile app development companies from Western Europe would charge more than their colleagues from Eastern Europe or Asia – make sure you consider that during the early stages of your research.

Why outsource your app development to Droids On Roids?

At Droids On Roids, we have been supporting businesses all over the world with our IT skills and experience for 9+ years. Our teams have delivered more than 130 mobile & web projects for clients across various sectors and operating in many different countries (US, UK, Norway, Netherlands, Switzerland, UAE, Australia, and more). Learn more by seeing our Company Presentation.

Over time, we have developed and fine-tuned our QA process to provide our clients with high-quality software products.

We work in Scrum and are ready to take the entire app development process off your shoulders, helping you to focus on your business.

Get in touch with us if you’re looking for an experienced IT outsourcing provider.

Outsourcing your app development – summary

As you can see, outsourcing app development comes with many different benefits but also several risks all business owners should be aware of before jumping on the IT outsourcing bandwagon.

However, by choosing your provider carefully, you’ll be able to avoid these risks and launch a fruitful partnership that will take your business to the next level.