Software Development Outsourcing | Full Guide [+Costs]

Software Development Outsourcing: The Essence

Outsourcing is a go-to way for businesses to develop software faster, at a lower cost, and with less effort. Software outsourcing entails the following benefits and risks:

Reduced hiring efforts and costs.
Quick project start.
On-demand access to required resources.
Optimized managerial efforts.
Easy team scaling up and down.

Less control over the project.
The risk of communication gaps.
The risk of security breaches.

More info on pros and cons of software development outsourcing

ScienceSoft has been rendering end-to-end software development services for non-IT enterprises and software product companies for over 35 years. With 750+ engaged and high-performing IT experts on board, we are equipped to take over software initiatives of any complexity and support any sourcing model of our client's choice.

Software Development Outsourcing Process

The outsourcing process setup may take from several days to several months, depending on the chosen outsourcing model, the maturity of vendor processes, your readiness for such a cooperation form, and more. Below, ScienceSoft's experts list the key steps to establish a smooth outsourced engagement:

Step 1. Decide whether to outsource

A software development outsourcing initiative should start with a feasibility analysis. It can include the following activities:

Determining the stumbling blocks in your software development process, e.g., the lack of particular technology and management skills or the shortfall of resources to progress at a desired pace.
Deciding on the part(s) of your software development project to outsource. Software maintenance and testing are usually the easiest project parts to commission to a vendor, while business analysis and design are the most challenging aspects to outsource.

Defining the required development competencies: software engineers, architects, QA specialists, etc.
Comparing the total cost of ownership (TCO) and value of in-house vs. outsourced software development in the context of business priorities (quick software launch, minimized expenses, etc.).

Step 2. Choose the fitting sourcing model

Team augmentation

A vendor provides remote professionals for you to manage directly. You can request the exact number of experts you need, from 0.5 FTE to 100+ FTE.

Dedicated team

A vendor provides a team of talents to work on an outsourced project or its part, sharing risks and responsibility for the quality with you and/or your other vendors. Team management mostly stays on the vendor’s side; still, the vendor's Team Lead/PM regularly reports the progress to your PM.

Full process outsourcing

A vendor takes over the entire development process, with full responsibility for the team organization and management, quality of the development results, and risk mitigation.

Step 3. Select the software outsourcing company

When shortlisting potential vendors, consider the following factors:

Software development experience showcased by a vendor on its website, in case studies, etc.
Approach to collaboration described by third parties in testimonials, independent reviews, etc.
Location (onshore, nearshore, offshore), time zone differences.
Language and cultural proximity.
A vendor’s development infrastructure (hardware, network, bandwidth, etc.).
The maturity of project management, quality management, and security management processes (e.g., proved by ISO 9001 and ISO 27001 certificates).
Compliance with industry standards and regulations you need to follow (HIPAA, FDA, PCI DSS, etc.).
Pricing options offered (fixed price, T&M).
Software maintenance and support options available.

Step 4. Set up and legally fix the outsourcing process

Team augmentation

Send a request to the selected vendor with the detailed skill set and FTEs required.
Get CVs and rates of the available staff.
Schedule interviews with potential candidates.
(optionally) Arrange the candidate test tasks.
Negotiate an SLA, including penalties for security breaches.
Sign the contract.

Dedicated team

Send a request to the selected vendor and get the proposal on service options, development approaches, team composition, and more.
Receive the vendor’s estimation of the project scope and the efforts required to implement it.
Together with the vendor, decide on the KPIs to evaluate the quality of deliverables and the performance of the outsourced team.
Negotiate an SLA, including penalties for security breaches.
Sign the contract.

Full process outsourcing

Send a request to the chosen vendor and receive the proposal with service options, collaboration forms, ballpark estimates for a suggested technical solution (if any), etc.
Expect the vendor to:
- Analyze your software development needs and current development processes (if any).
- Scope the project, prepare a WBS, and suggest the team composition.
- Provide a detailed service delivery plan.
Negotiate the cooperation success measures and an SLA.
Sign the contract.

Step 5. Transfer knowledge and establish a control framework

Organize knowledge transfer to the outsourced team/specialists.
Provide the involved talents with access to the project infrastructure.
Decide on the vendor communication frequency and channels.
Establish progress reporting forms and schedules.

Specifics of Software Development Outsourcing Models

	Staff augmentation	Dedicated team	Full process outsourcing Maximized cost savings
Pros	Easy resource scaling up and down to adapt to changing project needs. Quick access to specific skills. Direct supervision over the development process and team productivity. 1–2 weeks for onboarding (if the required resources are readily available in the vendor’s pool).	1–2 days to start (if the team is pre-assembled by a vendor and the team structure just needs to be reasonably adjusted to your project needs). A vendor provides a Team Lead/PM to coordinate the work of the outsourced team so that they need little/no guidance from your side.	Minimum management efforts on your side. Guaranteed quality of project deliverables and timeline alignment (with penalties for breaching them). Access to a vendor’s established development processes. Tackling project-related risks is on a vendor’s side.
Cons	Full responsibility for project-related risks is on your side. Onboarding and managing efforts are on your side. High risk of communication gaps and collaboration difficulties.	Risks related to vendor selection. Project team coordination and project risk management can be still partially on your side. People may underperform during the first 2-4 weeks until the newly gathered group turns into a real team.	The longest setup (up to a month). High vendor risks.

Learn more about the specifics of popular outsourcing models

ScienceSoft’s Software Outsourcing Services

Staff augmentation

Developers, architects, testers and test automation engineers, DevOps engineers, integration architects, data scientists, support engineers, cybersecurity experts, etc.
Flexible cooperation terms: 1 month – 10 years.
The exact number of qualified professionals you need (from 0.5 FTE to 150+ FTE).

I need this!

Dedicated teams

Fast ramp-up of the outsourced team (2 workdays – 2 weeks).
Experienced PMs and Team Leads to manage distributed teams.
Full assistance in establishing a collaboration environment and project progress control.
Strict compliance with agreed quality KPIs.
Easy team scale up or down.

I need this!

Full process outsourcing

Full-scale Project Management Office.
Defining the business and software development goals you want to achieve and taking the overall responsibility for the ‘how-to’ part.
Tailored communication with each stakeholder.
Continuous granular monitoring of project progress, regular reporting.

I need this!

Explore ScienceSoft's Featured Success Stories

Case Study

12 Innovative Software Products for a Global Leader in Image Processing

The 4.5-year-long cooperation resulted in 12 software products; 6 of them were built solely by ScienceSoft. One of the products was awarded Best Imaging Application. Our agile development practices helped reduce the time to market for each product by 3–4 months.

Project details

Case Study

10-Year Evolution of Life Sciences Software Products Used by GSK and AstraZeneca

During 10+ years of cooperation, ScienceSoft’s scalable team of 8–29 experts has been involved in the development, customization, testing, and support of several laboratory and analytical software products for the world’s leading pharmaceutical companies.

Project details

Case Study

Multi-Functional Business Process Management Software for a Bank with $7.5B in Assets

ScienceSoft helped ONE Technologies, an Asian software development company specializing in financial IT, deliver a large-scale business process management system for a commercial bank with the fifth-largest asset volume in its domestic market.

Project details

Case Study

Streaming Apps for a TV Everywhere Company that Partners with Fox, MTV and BBC

A success story of a long-term partnership that helped the Client become one of the world’s leading streaming solution providers. Created with ScienceSoft's help, the company's mobile apps now power T-Mobile, Orange, MTV, BBC, and other large brands.

Project details

Case Study

5 Years of Technology Partnership Resulting in the Viber Messenger with 1B+ Users

Viber relied on ScienceSoft to build, support, and evolve the Android and desktop versions of its instant messaging and VoIP app. By cooperating with us, the company ensured optimal development and maintenance costs and managed to expand its customer base faster.

Project details

Why Outsource Software Development to ScienceSoft

Since 1989 in IT and 750+ professionals on board.
7–20 years is average experience of our PMs, BAs, solution architects, developers, data analysts, and other IT professionals.
Over 4,000 success stories across more than 30 industries.
End-to-end software development – we envision, plan, design, develop, integrate, deploy, and support software solutions.
In-house project management office (PMO) – our PMs are experienced in large complex projects with distributed teams and multiple vendors involved.
Services built around strict agreed KPIs – business outcomes, quality of delivered software, code quality, development process efficiency, project time and costs (actual costs vs budget, budget to completion vs budget remaining, etc.), team’s productivity, and customer/user satisfaction.

What makes ScienceSoft different

We achieve project success no matter what

ScienceSoft does not pass mere project administration off as project management, a practice that's unfortunately common in the market. We drive projects to their goals, mitigating risks and overcoming constraints.

See how we deliver results

Our Awards and Partnerships

Growing faster than Amazon, Google, and ServiceNow

Recognized for reliability, trustworthiness, and excellence in delivering value

A top outsourcing provider for four consecutive years

One of the fastest-growing companies for the second consecutive year

Microsoft Partner since 2008

AWS Partner since 2017

ISO 9001-certified quality management system

ISO 27001-certified security management system

Our Clients Say

Mikhail Anfimau Mikhail Anfimau LinkedIn

Senior Solution Architect

ScienceSoft proved to be a professional service provider from the outset. We appreciate their proactive approach and ability to suggest improvements to a prospective solution on both architectural and business levels. We know we can always rely on ScienceSoft’s various competencies when our clients require quality software which would facilitate their business success.

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Bob Penland

CTO

With ScienceSoft, we've been able to reduce our development costs and decrease the timeline on new features and updates. ScienceSoft's attention to detail in how everything is documented and communicated is by far the best of any agency that I've worked with.

John Andersson John Andersson LinkedIn

Founder & CEO

ScienceSoft is a professional and dedicated mobile app development company. Over the past 10 years we've worked on about ten mobile app development projects with them. Their developers performed really well and have rescued us when we were late on delivery. We would certainly recommend ScienceSoft as a highly skilled and reliable service provider.

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Benefits of Software Development with ScienceSoft

Flexible cooperation

Our engagements may last from 1 month to 10 years. Our teams can include the exact number of qualified professionals you need (from 0.5 FTE to 150+ FTE) and can be easily scaled up and down on demand.

Industry expertise

Our industry-focused consultants (healthcare, BFSI, manufacturing, retail, and 25+ more) help bridge business and technology in the most efficient way and according to the relevant regulatory frameworks.

1.5–2x faster development

due to domain proficiency, multi-industry expertise, mature coding and time management practices of our talents.

20–50%+ project cost reduction

due to eliminated in-house staff hiring and training expenses and ScienceSoft's expert advice on the project cost optimization opportunities.

Have a Complex Development Project with a Tight Deadline?

ScienceSoft will help deliver it on the intended goal, quality, timelines, and budget.

Talk to the team

Software Development Outsourcing: Typical Roles on Your and Our Sides

	Staff augmentation (usually developers)	Dedicated team	Full process outsourcing
On the vendor’s side	One/several software engineers.	Developers. DevOps engineers. Team Lead/Project manager.	Project manager. BA. UX/UI designers. Developers with a Team Lead. Testers. DevOps engineers. Support engineers.
On your side	Project manager. BA. UX/UI designers. Developers with a Team Lead. Testers. DevOps engineers. Support engineers.	Project manager (for the vendor’s PM/Team Lead to report to). Developers (optional). DevOps engineers (optional). Support engineers.	IT manager.
Shared or on both sides		BA. UX/UI designers. Testers.

Software Development Outsourcing Costs

The software development outsourcing cost is defined by the major following factors:

Hourly rates for outsourced resources. The prices may vary significantly depending on the outsourcing region.
The actual efforts and performance of an outsourced team.
The vendor’s QA process specifics (proactive testing lowers QA costs while fixing bugs in production makes QA more expensive).
(for full process outsourcing) The maturity of the vendor’s outsourcing processes – mature project management and well-established development processes help avoid rework.
The need to transition to another outsourcing vendor (it is quite costly).

How Much Will It Cost to Develop Your Software Solution?

Please answer a few questions about your software development needs using our cost calculator. This will help our team provide a tailored service offering and a software development cost estimation much quicker.

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*What EHR/EMR functionality do you want to implement?

Patient records management

Patient treatment planning and monitoring

Medical specialty features (e.g., for pediatrics, cardiology)

AI-supported convenience features (e.g., voice assistance, dictation, handwriting recognition)

Advanced clinical decision support (e.g., clinical pathways, risk stratification)

Healthcare data analytics and reporting

Standardized health data exchange formats (e.g., HL7, FHIR)

Blockchain for data security, integrity, and traceability

*What telehealth or RPM functionality do you need?

Video consultations and instant messaging

Appointment management (scheduling, visit history, pre-visit forms, etc.)

Patient vitals and symptom monitoring

Medication adherence tracking

E-prescribing, refill requests

Patient health data analytics and reporting

Patient engagement tools (e.g., questionnaires, health education resources)

Interoperability with wearables and sensors (e.g., fitness trackers)

*What healthcare data analytics functionality do you want to include?

Clinical intervention and treatment outcome analytics

Analysis of patient-generated health data (vitals, symptoms, telehealth communications)

Financial performance analytics

Operational analytics (e.g., resource utilization, readmission rates, ER wait times)

Financial and operational forecasting based on historical data

AI-supported intelligent forecasting, identification of dependencies between multiple factors

Patient satisfaction and engagement analytics

Billing and claim fraud detection

*What diagnostic functionality do you need?

Medical image analysis

Lab test order entry and management

Quality control and assurance of diagnostic test results

Test results reporting to healthcare professionals via EHR or HIE integration

Management of laboratory supplies, reagents, and equipment

*What clinical trial functionality do you need?

Creation, tracking, and management of clinical trial protocols

Subject recruitment and management, including screening and eligibility assessment

Randomization and blinding for unbiased participant assignment to treatment groups

Patient data input via instant messages

Secure video chats

Chatbots for patient data submission

Participant safety monitoring and adverse event reporting

Trial data analysis and reporting

*What functionality should your medical AR or VR solution have?

Surgical planning, intraoperative surgical guidance

Visualization of medical conditions and treatment options

Medical equipment use training, procedure and ER simulation

Pain distraction therapy, virtual relaxation environments, meditation exercises, CBT

Exercises for physical rehabilitation

*What functionality do you need in your desktop medical device software?

Diagnostic imaging (e.g., X-ray, MRI, CT, ECG, ultrasound)

Pulmonary function testing

Laboratory information management

Point-of-care testing

Infusion pump coordination, ventilator management

*How promptly should changes in source data be reflected in your analytics solution?

*What type(s) of business insurance should your solution support?

General liability insurance

Professional liability (errors & omissions) insurance

Product liability insurance

Commercial property insurance

Commercial auto insurance

Workers’ compensation insurance

Business interruption insurance

*What type of investment analytics should your solution provide?

*How promptly should changes in source data be reflected in your solution?

*What capabilities should your solution provide? Select all that apply.

Work order management

Scheduling and dispatch management

Field worker routing and tracking

Remote inspection, diagnostics, and support

Contract and warranty management

Knowledge management

Field service performance analytics

Mobile applications for field workers

*What capabilities should your order management software provide?

Invoice generation

Payment processing

Dunning and reconciliation

Fulfillment planning and optimization

Order execution management

Warranty, claim, and return management

Order status tracking

*What capabilities should your inventory software provide?

Inventory tracking and real-time updates

Inventory items cataloging

Inventory planning

Inventory procurement

Intracompany inventory transfers

Inventory valuation

Inventory return processing

*What method of inventory counting should your solution support?

Manual counting

Semi-automated counting (using handheld barcode/QR code scanners)

RFID-based counting

Counting using computer vision

Not sure

*What marketing channels do you want to use?

Digital: emails, text messages, push notifications, on-page marketing forms, etc.

Printed: billboards, brochures, flyers, etc.

Events

Ads

*Which components should your in-store security system consist of?

Camera management software

Cloud storage solution for video footage and data

Access control software

Alarm monitoring software

*What features do you need in your price optimization software?

Rule-based price optimization mechanisms

ML-powered price optimization mechanisms

Competitive benchmarking

Price elasticity analysis

Price segmentation

Automated price updating across multiple selling platforms (e.g., webstores, marketplaces)

Promotion optimization

*What kind of software do you need to build?

Enterprise software for telecom companies (OSS/BSS, ERP, analytics)

Telecommunication apps (e.g., VoIP, video conferencing, IoT)

*What telecommunication app do you need to develop?

*What production operations should your software support? Choose all that apply.

Product lifecycle management

Production planning

Production order management

Workforce scheduling

Machinery and equipment monitoring

Facility condition monitoring

Production quality control

Manufacturing analytics

*Would you like to leverage Industry 4.0 techs?

AR for guided order picking

Computer vision for remote quality control

3D printing for additive manufacturing

Please specify the data sources for your software solution.

Internal data sources (e.g., ERP, CRM, SCM).

External data sources (e.g., weather data, competitor prices, market data, social media).

*Should your solution offer complex analytics?

Predictive analytics (e.g., for demand forecasting, predictive maintenance)

Prescriptive analytics (e.g., for process optimization, personalized suggestions, automated actions)

Complex reports (e.g., consolidated reports, industry-specific reports for local regulators)

Basic analytics capabilities only (calculation of historical metrics)

*What learning content types should your software support?

*What type of a client self-service solution would you like to build?

Multi-functional web portal

Web app to enable particular functions (e.g., order tracking, appointment scheduling)

Mobile self-service app

Promo website

Digital marketplace

Virtual store

*What is the aim of your software? What capabilities should it provide?

*Which software version do you need?

MVP only

A fully-featured solution

MVP now, a fully-featured solution later

*Which app type(s) do you need?

Web (available via browser)

Mobile

Desktop (installed on users' PCs)

*How do you plan to use your software?

Internal use (to support business operations or enhance client experience)

Commercial distribution (offering a web software product for a fee)

Both

*Do you have any preferences for the environment?

On-premises

Cloud

Hybrid (cloud and on-premises)

Not sure

Would you require any integrations?

No, I wouldn't

Do you have tech stack preferences?

Here, you can add any details you'd like to include:

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About ScienceSoft

ScienceSoft is a global IT consulting and software development company headquartered in McKinney, Texas, with offices in the EU and the Gulf. Since 1989, we provide full-cycle software development services for non-IT and IT companies. We guarantee smooth and efficient collaboration, rely on an ISO 9001-certified quality management and an ISO 27001-certified security management, and deliver software compliant with HIPAA, GAMP, FDA, PCI DSS, SOC, GDPR, and more.