{"id":4389,"date":"2024-07-25T15:50:51","date_gmt":"2024-07-25T13:50:51","guid":{"rendered":"https:\/\/riwers.io\/?p=4389"},"modified":"2025-04-01T16:45:19","modified_gmt":"2025-04-01T14:45:19","slug":"software-development-outsourcing","status":"publish","type":"post","link":"https:\/\/riwers.io\/en\/blog\/software-development-outsourcing\/","title":{"rendered":"Software development outsourcing: make the right decisions with our guide & outsource successfully"},"content":{"rendered":"

Your company is a “tech company” – at least in the broadest sense and regardless of which sector you operate in. Software solutions are just as integral a part of business operations in manufacturing and industry as they are for a real estate agent.<\/span><\/p>\n

It is becoming increasingly common for companies to require individual software<\/a> and develop it themselves. After all, the solution is guaranteed to meet your requirements or those of your customers and you are not dependent on a software provider.<\/span><\/p>\n

Sounds like a sensible plan at first, but it has a few weak points: Internal IT capacities are often fully utilized, good developers are hard to find (keyword: shortage of skilled workers), specific know-how is often lacking and the whole thing is not necessarily cheap.<\/span><\/p>\n

Outsourcing is an efficient solution for software development. At least if you go about it the right way. We will now show you how this works.<\/span><\/p>\n

What is outsourcing software development?<\/b><\/h2>\n

Outsourcing means that you implement software development with the support of an external software development partner. This collaboration can be short-term or project-related, as well as long-term. The partner provides you with the missing expertise and additional capacities, while you minimize your business risk and effectively save costs.<\/span><\/p>\n

External software development: outsourcing in various models<\/b><\/h2>\n

If you are considering outsourcing your software development, you can choose from various models. In addition to the question of how many external developers you need, the location is particularly important. We show you an overview of the various options for external software development:<\/span><\/p>\n

Software development with freelancers<\/b><\/h3>\n

One obvious solution for software outsourcing is to work with freelancers. This is true as long as the projects are time-limited and easy to manage. However, as soon as things become more complex, freelancers quickly reach the limits of their capacity and expertise.<\/span><\/p>\n

In order to scale up, you would therefore have to 1. find and 2. manage various freelancers who have probably never worked together as a team before. In these cases, you are better off with a development partner who can provide an entire development team<\/a>.<\/span><\/p>\n

 <\/p>\n\n\n\n\n\n\n\n
<\/i> Advantages<\/strong><\/th>\n<\/i> Disadvantages<\/strong><\/th>\n<\/tr>\n<\/thead>\n
\u00a0High flexibility<\/span><\/td>\nNot scalable<\/span><\/td>\n<\/tr>\n
\u00a0Suitable for short-term bottlenecks<\/span><\/td>\nManagement overhead required<\/span><\/td>\n<\/tr>\n
<\/td>\nDependent on one person<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Offshore teams for software development<\/b><\/h3>\n

Offshore outsourcing is probably the best-known option for external software development. In this case, you outsource the development via a provider to a team that is geographically far away, usually on another continent. The advantage is that this gives you access to an international talent pool and sufficient capacity for complex and long-term projects.<\/span><\/p>\n

However, offshore software development is also the reason why many companies are skeptical about outsourcing. Face-to-face meetings are virtually impossible, different time zones make project management more difficult and (work) cultural differences hamper collaboration. Political stability is also not a given everywhere.<\/span><\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n
<\/i> Advantages<\/strong><\/th>\n<\/i> Disadvantages<\/strong><\/th>\n<\/tr>\n<\/thead>\n
\u00a0Access to a large talent pool<\/span><\/td>\nGeographical distance & time zone<\/span><\/td>\n<\/tr>\n
\u00a0Lower costs<\/span><\/td>\nCultural differences usually present<\/span><\/td>\n<\/tr>\n
<\/td>\nPolitical stability not always given<\/span><\/td>\n<\/tr>\n
<\/td>\nCommunication in English<\/span><\/td>\n<\/tr>\n
<\/td>\nHigh management overhead<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

These are all reasons why nearshore vs. offshore<\/a> nearshoring solutions are increasingly in demand.<\/span><\/p>\n

Outsourcing to a nearshoring partner<\/b><\/h3>\n

The main difference between nearshore and offshore is the greater geographical proximity. In the DACH region, nearshoring often takes place through cooperation with European development teams. However, even here there are sometimes major differences between the countries, which is why the <\/span>right choice of location<\/span> is crucial to success.<\/span><\/p>\n

For example, we opted for a location in Slovakia because the country has a stable economy and wage development compared to others in the region, the work culture is compatible and it has an excellent network of specialists. <\/span>So nearshoring has some advantages<\/a><\/span> if you know the important criteria and choose the location accordingly.<\/span><\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n
<\/i> Advantages<\/strong><\/th>\n<\/i> Disadvantages<\/strong><\/th>\n<\/tr>\n<\/thead>\n
\u00a0Access to a large talent pool<\/span><\/td>\nSometimes high job-hopping rates<\/span><\/td>\n<\/tr>\n
\u00a0Lower costs<\/span><\/td>\nHigh demand for ICT workers<\/span><\/td>\n<\/tr>\n
\u00a0Cultural proximity & compatible work culture<\/span><\/td>\nCommunication in English<\/span><\/td>\n<\/tr>\n
\u00a0Remote, but on-site presence possible<\/span><\/td>\n<\/td>\n<\/tr>\n
\u00a0High level of training<\/span><\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Find an onshore team in the DACH region<\/b><\/h3>\n

Last but not least, there is onshore software development. However, it is obvious that this outsourcing model is problematic – again, the keyword here is shortage of skilled workers. Because onshore means that the team comes from the DACH region. But where there is already a shortage of young talent, there is not much to be gained. In addition, the costs are often exorbitantly high, even compared to the total costs of a permanent position.<\/span><\/p>\n

On the other hand, it makes a lot of sense to rely on an onshore partner who offers nearshore software development<\/a>. This gives you a direct contact person with whom you can communicate in German and who in turn has access to a talent pool that you need to scale your project.<\/span><\/p>\n\n\n\n\n\n\n\n\n
<\/i> Advantages<\/strong><\/th>\n<\/i> Disadvantages<\/strong><\/th>\n<\/tr>\n<\/thead>\n
\u00a0Cultural background & work culture<\/span><\/td>\nLimited talent pool & skills shortage<\/span><\/td>\n<\/tr>\n
\u00a0On-site presence easily possible<\/span><\/td>\nHigher wage level than near- \/ offshore<\/span><\/td>\n<\/tr>\n
\u00a0No language barriers<\/span><\/td>\n<\/td>\n<\/tr>\n
\u00a0High level of training<\/span><\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In-house vs. outsourcing:<\/span>
\n<\/b>Which strategy is right for your company?<\/b><\/h2>\n

Of course, you don’t have to implement software development via outsourcing. <\/span>Software sourcing<\/span><\/a> can take place via various channels and of course you can also implement your project in-house. Which solution is better for you depends on your individual problem.<\/span><\/p>\n

If you are not quite sure yet, you should ask yourself the following three questions:<\/span><\/p>\n

    \n
  1. Do you have the know-how and experience in-house to implement a complex software project?<\/span><\/li>\n
  2. Can you fill all the necessary roles in a team and do your employees have free capacity?<\/span><\/li>\n
  3. To what extent do you need to be able to scale up or scale back capacities after the end of the project?<\/span><\/li>\n<\/ol>\n

    One thing is clear: outsourcing allows you to compensate for missing resources and knowledge gaps while remaining as flexible as possible. For example, you can decide for yourself whether to outsource individual roles, a <\/span>software team<\/span> or the entire <\/span>software department<\/span>. Above all, it is important that you take stock honestly so as not to jeopardize the success of the project.<\/span><\/p>\n

    Advantages & risks:<\/span>
    \nWhat you should know before you make a decision<\/b><\/h2>\n

    Software development via outsourcing has many advantages for your company, but there are also certain risks that you should be prepared for. Let’s look at the benefits first:<\/span><\/p>\n