10 Reasons Why Software Outsourcing is a Smart Choice

10 Reasons Why Software Outsourcing is a Smart Choice

In this article, AGEST will provide a thorough checklist outlining the critical indicators that signal it’s time to consider outsourcing your software development projects. We’ll explore essential factors such as budget limitations, insufficient in-house expertise, pressing deadlines, and more. By the end, you’ll have a clearer perspective on the pivotal signs that make outsourcing a strategic choice, equipping you to make informed decisions for your software initiatives.

Bringing an idea to life as a software product can be a daunting task. Even with a well-defined vision, the path to realization is often riddled with obstacles and uncertainties. This is where software outsourcing can be a game-changer!

For startups and established enterprises alike, outsourcing alleviates the burden of development tasks by allowing you to collaborate with skilled professionals who excel in navigating these challenges. Many successful companies, including Google, Alibaba, Skype, and Slack, have leveraged outsourcing for a variety of software development needs.

software outsourcing market by 2030

Furthermore, the global software outsourcing market is projected to reach approximately $1.06 trillion by 2030, underscoring its significance in the industry.

While the advantages of software outsourcing are clear, the key question remains: when is the ideal moment to outsource? Is it prudent to outsource every project, or do specific situations warrant this approach?

In this article, we will focus on identifying the ‘when’ in software outsourcing by detailing ten unmistakable signs that it’s time to take this strategic step!

An Overview of Software Development Outsourcing

Software development outsourcing refers to the process of entrusting the creation of your software project to an external team or organization. By doing so, your company can hire a specialized group of professionals to undertake the technical aspects, allowing you to concentrate on your core business operations.

Building an in-house development team often entails a significant financial commitment. Outsourcing presents a smarter alternative; it allows you to sidestep the costs associated with hiring, training, and retaining full-time employees. Instead, you can pay for the services you require on an as-needed basis, making it an ideal solution for small businesses and startups with limited budgets looking to compete in a global marketplace.

However, the benefits extend beyond just cost savings. Software development outsourcing grants you access to a vast talent pool.

Consider this: you’re no longer restricted to hiring local developers within driving distance of your office. With outsourcing, you can leverage a worldwide network of skilled professionals possessing the expertise necessary for your project.

This approach not only enhances your project with diverse perspectives but also fosters innovative solutions, ultimately leading to a more robust and successful final product.

LEARN MORE: Software Outsourcing: A Strategic Solution for Business Growth

Reasons Companies Choose to Outsource Software Development Services

Did you know that over 60% of tech companies are outsourcing at least some portion of their application development? This statistic underscores the effectiveness of outsourcing as a strategic business decision. If you’re still uncertain about this approach, here are five compelling advantages of outsourcing software development:

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Access to Exceptional Talent

One of the primary reasons companies opt for software outsourcing is the ability to tap into a global talent pool. External partners bring a wealth of experience, a diverse range of skills, and specialized knowledge that can help turn innovative ideas into reality.

Cost Savings

Outsourcing software development can be a financially savvy choice. By delegating these tasks, companies can significantly lower overhead costs related to hiring, training, infrastructure, and ongoing maintenance, allowing them to allocate resources more efficiently.

Increased Efficiency and Flexibility

Working with external partners enhances scalability and flexibility. Businesses can easily adjust their resources in response to changing project demands, whether that involves expanding a development team or boosting development capacity overall. IT outsourcing offers the agility needed to pivot as circumstances evolve.

Concentration on Core Competencies

Outsourcing software projects allows companies to offload non-essential tasks, enabling them to focus on their core competencies. By relying on external experts for technical aspects, organizations can redirect their energy towards innovation, superior customer service, and impactful strategic initiatives.

Risk Mitigation

Every project brings potential risks, such as missed deadlines, technical issues, or insufficient quality assurance. A skilled outsourced development team helps mitigate these risks by introducing fresh perspectives, best practices, and rigorous quality control measures. This proactive approach leads to fewer project setbacks and a more streamlined development process.

Identifying the Signs That It’s Time to Outsource Software Development

Choosing to hire offshore developers is a significant decision, and finding the right company to align with your specific needs is essential. It’s vital to partner with a firm that employs skilled and dependable developers who can easily integrate into your existing workflow, simplifying processes rather than complicating them.

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So, how do you know when it’s the right moment to consider outsourcing? Here are five indicators that suggest now might be the ideal time to capitalize on the advantages of outsourcing your software development:

  • Lack of in-house expertise
  • Limited resources
  • Tight deadlines
  • Cost-related concern
  • Access to specialized skills
  • Need for flexibility
  • Drive for innovation
  • Hiring complexity
  • Changing scope
  • Focus on core business

By recognizing these signs and choosing the right outsourcing partner, you can confidently determine that custom software development outsourcing is the right path for your organization. In the upcoming sections, we will explore these indicators in greater detail, backed by real-life examples that highlight their relevance and implications.

You Lack the Required In-House Expertise

When your organization doesn’t have the necessary technical skills to tackle complex software projects, it’s a strong indicator that outsourcing is a viable option. Software development demands a broad skill set, encompassing various programming languages, frameworks, and industry standards. By partnering with an offshore development center, you can leverage their expertise to ensure high-quality outcomes.

    For example, consider a small startup struggling to build a mobile app but lacking knowledge in native iOS or Android development. Outsourcing the project to a team well-versed in mobile app development can bridge this gap and lead to a successful product launch.

    You Have Very Limited Resources

    Resource constraints can significantly impede the efficiency of software development. Whether it’s a shortfall of developers, hardware, or software licenses, limited resources can delay projects and affect quality.

    Outsourcing allows you to access a dedicated team of developers equipped with state-of-the-art tools and infrastructure, all without the need for substantial upfront investment. For instance, a growing eCommerce company experiencing a surge in demand during the holiday season might find that their in-house team cannot scale quickly enough. Outsourcing development can provide the necessary resources to ensure a smooth customer experience.

    You Are Struggling with Tight Deadlines

    In today’s competitive markets, adhering to deadlines is essential. If your in-house team is overwhelmed with multiple projects and failing to meet deadlines, outsourcing can offer a practical solution.

    A skilled software development team can supplement your workforce, streamline processes, and ensure timely project delivery. For example, a healthcare organization in need of a critical software solution to enhance patient care may find that internal delays threaten their timeline. By outsourcing part of the development work, they can fast-track the project to meet urgent healthcare needs.

    Cost Is a Major Concern

    Managing costs is crucial in any business landscape. In-house software development can become expensive, considering recruitment, training, salaries, benefits, and the required infrastructure.

    Outsourcing allows businesses to cut these costs significantly. You can benefit from offshore development solutions that offer competitive pricing models like fixed-price contracts or dedicated resources, leading to savings without sacrificing quality. Additionally, outsourcing provides access to modern technologies without significant investments in expensive hardware or ongoing training.

    You Need to Access Specialized Skills

    Many software development projects require specific expertise in niche areas or emerging technologies. If your in-house team lacks this knowledge, outsourcing to a specialized company can help bridge that expertise gap. According to reports, 77% of organizations experienced a critical talent shortage in 2023.

    For instance, a bank aiming to create a secure FinTech application may find that they lack the necessary expertise in this rapidly evolving field. Outsourcing the project to a firm experienced in financial software can ensure the development of a robust and secure application.

    You Are Looking for More Flexibility

    If your organization requires greater flexibility in managing team size or project workflows, outsourcing software development may be a suitable path. This approach allows you to expand or contract your development team as needed, without long-term commitments and costs.

    Such flexibility is invaluable when adapting to changing workloads. During economic fluctuations, outsourcing enables companies to remain agile, paying only for the services they need. Additionally, it reduces administrative burdens like payroll and recruitment, thus allowing you to concentrate on core business operations.

    You Must Focus on Driving Innovation and Creativity

    Innovation is key to staying ahead in any industry. However, fostering a culture of innovation requires an environment conducive to experimentation and collaboration.

    Outsourcing can introduce a fresh perspective and diverse talent pool, enabling you to explore new ideas that might not arise from your internal team alone. Imagine collaborating with developers from various global backgrounds, each bringing unique insights and creative solutions to the table, which can fuel innovative thinking.

    Recruitment and Payroll Are Getting More Complex

    If the complexities of recruiting and managing payroll are overwhelming, you’re not alone. Many companies struggle with the time and effort required to hire certified professionals and handle payroll operations.

    This is where IT staff augmentation comes in. For example, at Radixweb, we offer tailored on-demand experts, providing the benefits of an in-house team without the stress of recruitment and payroll management. This allows you to focus on product development and other critical business functions.

    Your Project Scopes Are Unpredictable

    Software development projects often face fluctuating or unpredictable requirements due to changing market conditions or customer needs.

    An outsourcing partner can help you remain adaptable when your project scope changes unexpectedly. This prevents internal resource strain and minimizes potential cost overruns. By starting with a clear outsourcing agreement and well-defined deliverables, you can maintain better control over timelines and costs.

    You Can’t Focus on Your Core Competencies

    If you find that development responsibilities are diverting attention from your core business functions, it’s time to consider outsourcing those tasks to a specialized software development firm.

    Leverage Our Offshore Software Solutions to Expand Your Development Capacity Without Breaking the Bank

    Are You Ready to Outsource Software Development Services?

    Outsourcing software development can be a transformative strategy for your business, allowing you to gain a competitive edge by harnessing the latest technologies while saving both time and money. Whether you’re a burgeoning startup or an established corporation, outsourcing can enhance efficiency, reduce costs, and deliver exceptional results within your desired timeframe.

    With dedicated teams focused on rigorous quality control, outsourcing becomes an appealing choice, particularly if any of the ten signs we discussed resonate with your organization.

    If you’re considering the advantages of outsourcing your software development projects, we encourage you to explore the possibilities with AGEST, a reputable partner in the software development outsourcing landscape. By collaborating with us, you can tailor our offerings to meet your specific needs, ensuring a seamless integration that aligns perfectly with your business objectives.

    Let us help you unlock the full potential of your projects while maintaining cost-effectiveness and high-quality deliverables. Reach out to AGEST today to discover how our offshore software solutions can elevate your development capacity without breaking the bank!

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    Vu Nguyen

    Director of Information Technology

    Vu Nguyen is a seasoned IT professional with a proven leadership and innovation track record in technology. Currently serving as the Director of Information Technology of AGEST Vietnam (AGV), Vu brings experience, drives IT strategy and ensures seamless technological operations for the company and its local and global affiliates.

    Vu has always demonstrated a passion for leveraging technology to solve complex challenges and improve business processes throughout his career. Before joining AGEST VN (former name LogiGear VN) in 2008, he held key roles in various IT capacities.

    Besides a bachelor in IT, Vu holds a bachelor in business administration from the University of the People (USA). This academic background, combined with his extensive experience in information technology, positions Vu as a well-rounded leader with a comprehensive understanding of business and technology.

    Vũ Nguyễn

    Giám đốc CNTT

    Ông Vũ Nguyễn là một chuyên gia CNTT dày dạn kinh nghiệm với khả năng lãnh đạo và đổi mới công nghệ đã được chứng minh. Với chức vụ Giám đốc Công nghệ Thông tin của AGEST Việt Nam (AGV), ông Vũ Nguyễn mang đến kinh nghiệm, thúc đẩy chiến lược CNTT và đảm bảo hoạt động công nghệ liền mạch cho công ty cũng như các chi nhánh trong nước và toàn cầu.

    Ông Vũ Nguyễn luôn thể hiện niềm đam mê tận dụng công nghệ để giải quyết những thách thức phức tạp và cải thiện quy trình kinh doanh trong suốt sự nghiệp của mình. Trước khi gia nhập AGEST Việt Nam (tên cũ là LogiGear VN) vào năm 2008, ông giữ các vai trò chủ chốt ở nhiều vị trí CNTT khác nhau.

    Ngoài bằng cử nhân CNTT, ông Vũ còn có bằng cử nhân quản trị kinh doanh của UoP (Mỹ). Nền tảng học vấn này, kết hợp với kinh nghiệm sâu rộng về công nghệ thông tin, giúp ông Vũ trở thành một nhà lãnh đạo toàn diện với hiểu biết toàn diện về kinh doanh và công nghệ.

    Tam Phan

    Director of Japan Business Development

    Tam Phan has over 16 years of experience in the tech industry and is a seasoned professional. Tam developed a passion for technology from a young age and was raised in Tokyo, Japan. He earned his degree in Computer Science from the University of HoChiMinh City, where his academic excellence laid the foundation for his future success. Throughout his career, he has a proven track record of meeting customer project needs.

    Tam focuses on sourcing software development resources and solutions as well as software design, consulting, and other software-related activities. His early experiences gave him a comprehensive understanding of software development, system architecture, and project management. He has shown excellent leadership skills over the years, guiding teams through complex projects and fostering a collaborative work environment.

    He quickly rose through the ranks due to his commitment to innovation and ability to foresee industry trends. As the Head of Engineering, he plays a crucial role in shaping the company’s technological landscape by overseeing the development of cutting-edge solutions that meet the ever-evolving needs of the digital world. Tam is known for his strategic vision and hands-on approach.

    He has successfully led his team in implementing transformative technologies to deliver large-scale software projects in various domains, including education, eCommerce, and automobile. Tam held key managerial positions at leading Japanese companies in Japan and Vietnam before joining AGT.

    Tam’s story is about his dedication, innovation, and leadership, which have made him a prominent figure in the IT landscape.

    He received a certificate in Software Design from The Association for Overseas Technical Cooperation and Sustainable Partnerships, Japan (AOTS) in 2007.

    Tâm Phan

    Giám đốc kinh doanh - Thị trường Nhật Bản

    Ông Tâm Phan là một chuyên gia giàu kinh nghiệm với hơn 16 năm cống hiến cho ngành công nghệ. Sinh ra và lớn lên tại Tokyo, Nhật Bản, ông Tâm đã nuôi dưỡng đam mê với công nghệ từ nhỏ. Ông Tâm tốt nghiệp chuyên ngành Khoa học Máy tính tại Thành phố Hồ Chí Minh, nơi thành tích học tập ưu tú của ông đã đặt nền móng cho sự thành công trong tương lai. Trong quãng đời nghề nghiệp của mình, ông Tâm đã chứng minh được khả năng đáp ứng mọi yêu cầu của dự án từ phía khách hàng.

    Ông Tâm đã tập trung mạnh mẽ vào việc đảm bảo nguồn cung ứng linh hoạt của tài nguyên và phương pháp phát triển phần mềm, cùng việc tham gia vào quá trình thiết kế, tư vấn phần mềm, và các hoạt động liên quan khác trong lĩnh vực phần mềm. Những kinh nghiệm ban đầu của ông đã mang lại cho ông sự hiểu biết toàn diện về phát triển phần mềm, kiến trúc hệ thống và quản lý dự án. Ông đã thể hiện kỹ năng lãnh đạo xuất sắc trong nhiều năm, hướng dẫn các nhóm thực hiện các dự án phức tạp và thúc đẩy môi trường làm việc hợp tác.

    Ông Tâm nhanh chóng thăng tiến nhờ vào khả năng đoán trước các xu hướng của ngành. Với tư cách là Giám đốc Kỹ thuật, ông đóng vai trò quan trọng trong việc định hình bối cảnh công nghệ của công ty bằng cách giám sát việc phát triển các giải pháp tiên tiến đáp ứng nhu cầu ngày càng phát triển của thế giới kỹ thuật số.

    Ông đã lãnh đạo thành công nhóm của mình trong việc triển khai các công nghệ biến đổi để cung cấp các dự án phần mềm quy mô lớn trong nhiều lĩnh vực khác nhau, bao gồm giáo dục, Thương mại điện tử và ô tô. Ông Tâm từng đảm nhiệm các vị trí quản lý chủ chốt tại các công ty hàng đầu Nhật Bản tại Nhật Bản và Việt Nam trước khi gia nhập AGT. Câu chuyện của ông Tâm kể về sự cống hiến, sự đổi mới và khả năng lãnh đạo của ông đã khiến ông trở thành một nhân vật nổi bật trong lĩnh vực CNTT. Ông nhận được chứng chỉ về Thiết kế phần mềm từ Hiệp hội Hợp tác Kỹ thuật Nước ngoài và Quan hệ Đối tác Bền vững, Nhật Bản (AOTS) vào năm 2007.
    Long Vuong is the COO of AGEST Vietnam (AGV). He has 30-year+ experience in the corporate world. Prior to joining AGV 14 years ago (2010), he had been holding multiple leadership roles including General Manager cum Chief Accountant for a 500-staff Belgian diamond company for 15 years, and Director of Operations for a 100-staff publishing company for 2 years. Long has a great network in the IT community, associations, and academia in Vietnam.

    Long occasionally participates in studies in management science at national and institution levels, teaches and speaks at universities and conferences on various topics of his expertise. He also makes writing and translating his hobby in free time. A few books he translated and published: Nudge (Richard Thaler’s 2017 Nobel Prize in Economics), Classic Drucker, The Future Leader (Top-10 leadership books 2023), Smart Trust, The Snowball, and 30+ other leadership/management books. Long was awarded an Excellence Prize (2016) in Tokyo by the Japan Foreign Trade Council for his writing on the role of Japanese companies in global trade. He is currently the President of the EMBA Alumni of UEH University.

    Long holds an Executive MBA degree (valedictorian), a BA in finance & accounting, and a BA in English linguistics.
    Mizuide Tamaki, CFA, received his Master of Engineering in Applied Physics from Tohoku University in March 1990.

    He joined a major Japanese bank, and was engaged in development of financial engineering products, then became Chief Manager of Risk Management Department in Singapore and Compliance Department at HQs Tokyo.

    After 28 years of banking life, he moved to a Japanese car seat manufacturer who wanted to set up a new factory in Asia, where he became the local General Director. After establishing a factory near Hanoi, he joined Digital Hearts Holdings for another opportunity and was transferred to Ho Chi Minh as ex-LogiGear Vietnam’s (now AGEST Vietnam) Japan Business Head.

    In February 2023, he took LogiGear Vietnam GD role, now CEO and GD of AGEST Vietnam.

    Khuong Ngo

    General Manager/AGV-Saigon (Test)

    Khuong Ngo is the General Manager of AGEST Vietnam (AGV)-HCM, in charge of Software Test Division and Test Center of Excellence.  His responsibility includes business development, resource capability development and testing service delivery management. Besides, he also leads the innovation and technology research activities for new software testing methodologies on a companywide scale.

    Khuong joined AGV under its former name “LogiGear Vietnam” since 2005 as a Software Developer for TestArchitect™, the action-based automation software testing tool, in its very first version. Khuong is a well-proven Project Management Professional (PMP). Khuong spent some time in LogiGear Headquarters, CA, USA in 2015, where he got trained of management and leadership in software outsourcing business. Over 18 years functioning in various technical and management positions, Khuong is now a key member of the senior management team of AGV.

    Khuong holds a Bachelor of Science in Software Engineering by the Ho Chi Minh City University of Science.

    Yen Nguyen

    Financial Controller

    Yen Nguyen is a core member of the senior management team of AGEST Viet Nam (AGV). She joined the company in 2010 when it was operating under the name of LogiGear Vietnam. Since then she has made her concrete career development with AGV through different roles and responsibilities: Accounting Clerk, Accountant, General Accountant, Chief Accountant, and Financial Controller at present. Besides, she oversees the corporate legal area of AGV in Vietnam.

    In the role of a Financial Controller, Yen looks after all accounting/finance related activities, including cost accounting, managerial accounting, and budgeting. She assists the BOD and division heads with preparation and implementation of annual operating budgets, oversees the preparation of financial reports, monitors the internal and external compliance as well as conducting internal audits, due diligences, and spontaneous reports from time to time.

    Yen holds a bachelor degree in accounting and a bachelor degree in Business English. She also earned a good number of professional certificates such as Certificate of Chief Accountant; Banking and Finance English; Marketing and Branding Management; and Public and Media Relations along her career journey.

    Thanh Pham

    General Manager/AGV-Hanoi

    Thanh Pham is a General Manager of AGEST Vietnam (AGV), manages DX development center (Hanoi branch). He has 17 years of experience in the tech industry and is a seasoned professional.


    Thanh Pham having worked for a Japanese company for two and a half years at the beginning of his professional career, he has been familiar with Japanese business culture and practices. Since then, he has gained experience, knowledge, skills, and climbed the ladder of his business career from BrSE to DM, and now GM.

    Tam Pham

    Director of Japan Business QA

    Tam Pham is currently the Director of Japan Business QA of AGEST Vietnam (AGV). Tam joined AGV since 2011 when it was operated in Vietnam under the name of LogiGear Vietnam.

    Tam has spent over 15 years in outsourcing software development, he plays multiple roles such as: Software Developer, Project Technical Leader, Test Leader, Project Manager, Delivery Manager, Engineering Manager, and Director. He worked a few years in Japan in 2007 and 2015. He also traveled to and got trained at LogiGear Headquarters, CA, USA for a while in 2016. This brought him a solid experience related to management and leadership in software outsourcing.

    Tam enjoys great time as a R&D leader to research and develop automation testing product. For all of his career, Tam has been interested in software design, test automation and the state of the art of software craftsmanship. Tam has introduced his first line of code since 2001 and got engineer’s degree of Information Technology from Da Nang University of Science and Technology in 2006.

    Thang Nguyen

    General Manager, AGV Danang

    Thang Nguyen is a seasoned professional with 17 years of dedicated service to AGEST Vietnam. Currently serving as the General Manager of AGEST Vietnam’s Danang branch, Thang’s expertise and leadership have played a pivotal role in the company’s success. With a background in Computer Science from the University of Madras in India, he has honed his skills and knowledge to excel in his career.

    Thang’s journey within AGEST Vietnam has seen him take on diverse roles, culminating in his current position. Notably, he led the quality team for TestArchitect, a flagship product of AGEST Vietnam. His contributions to TestArchitect, a renowned automation tool acclaimed for its ability to automate a wide array of common AUT technologies, including Web, Desktop (.Net, Java, etc.), Web Services, Databases, and Images, have been instrumental in enhancing the product’s standing in the industry.

    Thang Nguyen’s commitment, expertise, and leadership exemplify his invaluable contributions to AGEST Vietnam’s growth and success. As General Manager of AGV-Danang, his vision and dedication continue to drive the branch forward, setting new standards for excellence within the AGEST Vietnam.