The Benefits and Risks of Outsourcing in your Software Startups

The Benefits and Risks of Outsourcing in your Software Startups

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Entrepreneurs in all industries have capitalized on the advantages of outsourcing software development roles, and the benefits can’t be understated. However, this low-cost option also features some inherent risks that are important to take into account, particularly at the onset of business procedures. Consider the following advantages and potential risks to determine your company’s best course of action.


From low-cost labor to short-term commitment advantages, there’s much to be said about securing a quality outsourced employee or team.


The merits of hiring a contract developer from a cost perspective are easily ascertained. Hiring in-house employees comes with its fair share of extra expenses, including benefits and insurance with a company like Zenefits, 401(k) payments, on-site equipment, and more. These are eliminated with outsourcing efforts. If planning on outsourcing to overseas countries, your salary payments are often cut substantially, with qualified developers and workers in foreign countries charging much lower rates for quality work.

Short Term Commitment

Say your startup has one major project to start with-hiring a full-time developer may cost you more in the long run, as you’ll be scrambling to find work for them once said project has been completed. Herein lies one of the greatest benefits of outsourcing: short-term commitment. This allows you to pick and choose developers based on skill set and background depending on the needs of any future projects that arise, without tying your company down to one developer who may have been perfect for the first assignment but less qualified for the subsequent projects down the line.

Easy to Source

Take a simple gander online and you’ll be inundated with freelancing developers looking for work and find a plethora of companies promising to put you in contact with skilled individuals to suit your needs. When hiring full-time employees, you may find your recruitment process is quite a bit longer. Quality developers are in demand, and many companies elect to have in-house individuals – this makes competition fierce. These developers know their value, and will push you to compete with other offers, which may or may not be a part of your budgetary capabilities.

Another issue to consider? Along with having the skill set you desire, a prospective in-house developer will also need to be a cultural fit, and many companies find these are mutually exclusive aspects. Using a trusted software outsourcing company like Accelerance can help you locate high-quality individuals quickly so you can begin your projects immediately.


While there are numerous benefits to be gained from outsourcing development for your startup, there is also the potential for mishaps that could cost you time, money, and productivity.

Communication Issues

There are bound to be more communication issues with an individual who’s working offsite.

Whether it be a language barrier or simple miscommunication through online correspondence, it can be easy to run into clarity issues. When large communication problems occur, it can upset the timeline of a project and lengthen development time, which can end up costing your company a great deal in the long run, especially if these communication issues continue.

Lack of Familiarity

When you have in-house employees, they’ll be more knowledgeable or quickly brought up to speed with your in-house network and IT systems. Because of this familiarity, they may be quicker to navigate problems and issues that arise. While an outsourced individual or team can learn various networks and system procedures, the time spent on this IT training may cost more in the long run.

Quality Assurance

Some companies have corrected this issue through the use of technology like Inflectra’s automated software testing. This technology runs testing at pre-selected intervals to ensure any bugs or glitches are caught immediately, allowing developers to quickly correct mistakes and keep any said project on track with the determined timeline. This can reduce the likelihood of developer error, avoid costly reworking issues further down the road, and help in-house managers keep an eye on the project during every portion of development, from conception to finished product.

Bottom Line

Choosing whether or not to outsource is highly individualized. As a startup, it’s important to begin your brand with quality output; high-quality products require skilled individuals.

If you find that this skill is lacking in outsourced employees, it may be in your company’s best interest to shell out more money for an in-house developer, at least at the onset of production. However, there’s much to be said about the benefits of hiring out-of- house developers; examine your company’s needs and goals, and consider whether a hybrid of in-house and outsourced employees would best suit your aims.

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