Jellyfish Technologies empowers global businesses with scalable, efficient, and innovative solutions by helping them outsource software development services that streamline operations and reduce costs. As a trusted development partner, we ensure access to top-tier talent, rapid project delivery, and cutting-edge technologies tailored to your business objectives.

1. Decoding The Concept of Outsourcing Software
Development: A Complete Guide
Digitization has been a key driver globally for various businesses over the last
few decades, making outsourcing software development services a critical
strategy for staying competitive. Companies have centralized their focus on
developing software and their applications to simplify business processes and
improve the customer experience.
However, everyone may not be able to keep an in-house software development
team. That’s why software outsourcing companies have experienced gradual
growth over the past two decades.
According to a recent report by Precedence Research, in the year 2022, the
global IT outsourcing market size amounted to a staggering amount of 565.43
Billion U.S. dollars. Forecast and Analysis 2020-2024.
It’s been predicted that the IT outsourcing market has the potential to grow by a
CAGR of 8.2% during the forecast period of 2023-2028, as mentioned in a report
by Statista.
Such strong statistics imply a high demand for software services across the
globe, as businesses are optimizing their services over digital platforms. With
digitization and ease of access to the internet, businesses are shifting their
operations to custom apps and websites, forming a formidable foundation for
their processing.
Nowadays, technology evolves at such a rapid pace that the technology of one
year may be obsolete the next. The competition is higher than ever, so it
becomes necessary for companies to adapt according to cutting-edge
technological trends.
With the rise in businesses, they can’t possibly accommodate their software
development teams. Here comes the current market trend and a necessity,
software outsourcing services.

2. What Is Outsourcing Software Development?
In simplest terms, software development outsourcing describes an arrangement
in which the organization chooses to hire an external software development
agency/company to carry out all the tasks of a software development project,
such as web development, application building, etc. Software outsourcing entails
handing over specific tasks, such as software development outsourcing services
or outsourcing software developers, to a third-party organization to complete the
project efficiently, such as software development outsourcing services or
outsourcing software developers, to a third-party organization to complete the
project efficiently, such as software development, API integration, UI/UX services,
mobile app development, cloud consulting, etc to a third-party organization to
complete the task more efficiently.
There are some fundamentals you need to look into before you outsource your
project. This is primarily because healthy professional relationships are the
driving factor in a company’s success. The selection, however, is based on the
types and models of outsourced software development services for your project.
Let’s get a brief idea of them first. Here are the three major outsourcing models:
Software Outsourcing Models

3. Staff Augmentation Model:
In this model, you own your project from start to finish, while the outsourcing
company provides outsourced software developers to support specific project
needs. The client takes on the most responsibility. You hire tech talents from a
top outsourcing company to strengthen the team responsible for the software &
application development projects.
Managed Team Model:
In the managed team model, the client and the outsourcing provider share
responsibility and ownership, with the client determining which responsibilities
belong to whom. It also improves employee satisfaction and direct information
sharing.
Project-based Model:
The outsourcing provider holds the majority of the responsibility and manages
the projects from start to finish. The provider completes your development
projects according to your specifications.
For a deeper dive into the different software outsourcing models and how they
can benefit your business, check out outsource software development services.
Software Outsourcing Types
The outsourcing of software development projects can be categorized into three
major types based on the location where you perform the work.
Onshoring
In this collaboration, you outsource the software development agency in the
same time zone as your country’s. We’ve enlisted a few benefits of onshore
outsourcing below:
●​ Real-time collaboration
●​ No language barrier
●​ In-person meetings

4. Nearshoring
Nearshoring refers to the outsourcing company near the home but not in
particular in the same area. For example, software developers in Ottawa are
quite expensive, so onshoring there would be quite expensive and
time-consuming. However, dedicated developers at Torranto work in a similar
time zone and would be budget-friendly.
Offshoring
In this type, you establish an independent software development team around
the globe by establishing an offshore software development company, and
everyone on that team works solely on your project. Simply put, an offshore team
of software engineers is located in a different country, usually at a great distance,
and solely contributes to your project. It’s been widely accepted globally because
of its advantages over other types of software outsourcing. Let’s get acquainted
with a few of them:
●​ Highly cost-effective
●​ Global talent pool
●​ Quick service
Pros and Cons of Outsourcing Software Development
Outsourcing IT development, whether through software development outsourcing
models or by hiring outsourced software developers, is an excellent option for
businesses looking forward to achieving their digital transformation goals.
Outsourcing companies provide your project with a cost-effective solution. We’ve
covered the pros and cons of outsourcing briefly in the table below:
S.No Pros Cons
1 Cost Effective Lack of Direct Control
2 Access to Global Talent Time Zone Differences
3 Focus on Core Competencies Communication Challenges
4 Scalability Quality Concerns
5 Faster Time-to-Market Security Risks

5. 6 Risk Mitigation Dependency on External Partners
7 Flexibility and Resource Management Cultural and Language Differences
8 Reduced Time and Resource Investment Potential for Misalignment with Goals
9 Access to Specialized Skills Legal and Contractual Challenges
Why Outsource Software Development Services?
Software development outsourcing is a major driving force nowadays for
businesses to establish their digital presence. It is essential for various reasons,
and companies often leverage it to achieve their strategic goals. Here are some
key reasons why software outsourcing is important:
Extended Talent Pool:
Outsourcing software experts and professionals, often referred to as software
engineer outsourcing or software developer outsourcing, enables access to a
diverse pool of global talent. This allows businesses to work with experts who
may not be available locally.
Focus On Core Business:
It allows business operators to focus on their fundamental business/project goals
while assigning IT tasks to outsourced software engineers.
Faster Time-to-Market:
By leveraging outsourcing services, companies can accelerate their businesses
and development processes, thereby bringing products or solutions much quicker
to the market and gaining a competitive advantage.
Risk Management:
Outsourcing can help distribute project risks by sharing them with the outsourcing
partner. This is especially important in complex projects where the outsourcing
partner’s expertise can help with risk management.

6. Innovation and Technology Adoption:
Outsourcing agencies often stay updated with the latest technological
developments and trends. Collaborating with them can bring fresh insights,
innovation, and cutting-edge technology to your project.
While software development outsourcing companies offer numerous benefits to
your project, it is essential for your business to carefully consider your
outsourcing partner, establish a clear communication channel, opt right software
development model, and maintain a strategic plan to ensure the success of the
outsourcing arrangement.
The digital revolution across the globe has equipped everyone with the latest
technology and trends. Many countries contribute to software development
projects; choose the most advantageous one for your project.
Want to see how businesses have successfully leveraged outsourcing to achieve
their goals? Explore Jellyfish Technologies’s software development outsourcing
success stories to learn more.