Outsourcing is a procedure of hiring an external agency, leveraging advantages ranging from reduced cost, improved technical expertise, and quality of work. There is a tremendous growth of outsourcing software development in 2021.

Many companies are looking for outsourcing software development from an offshore software company in a current global scenario. Given the dynamic status of the industry and growing market size, the number of offshore software companies is increasing on a large scale.

The practise of outsourcing has been successful among companies from Canada, the USA, various Asian and European countries because it allows them to provide high-quality software outsourcing services and leveraging their fast-growing IT infrastructure.

Other reasons for outsourcing software development are effective risk management, business scalability, space availability, and shortage of talented engineering.

As the demand for outsourcing software development grows, many developed countries are looking for an offshore software company in countries where labour costs are lower than their country and for the country with more IT experts.

Given the speed of advanced technology, market status, and pandemics have driven life online, the IT service industry is more in demand. Offshore software development services such as coding, mobile app development, website design, software support, etc.

Countries such as India, Vietnam, Hong Kong, Singapore, Malaysia, Philippines, Indonesia, Dubai, Latin America, China, Ukraine, etc. have a pool of talented IT engineers who are offering offshore software development services to the USA, the UK, Canada, Australia, New Zealand.

1. What is offshore software development**?**

Offshore software development is a software outsourcing service provider to a third-party company located in a different country than the hiring company head office. For instance, a London company has outsourced an offshore software company located in India for their company website.

** 2. Software development outsourcing models**

Outsourcing services are commonly divided into three location-based models:

Offshore: The outsourcing company is located at different geographical locations from the hiring company. The company often has different time zones.

Onshore: The outsourcing company is located in the same country as the hiring company.

Nearshore: The outsourcing company is located across the border from the hiring company. The company might have the same or slight difference in time zone.

There are three main relation based models on which outsourcing company works:

Staff Augmentation: The hiring company has an in-house software developer and outsources some teams for some external work.

Managed & Dedicated Team: A dedicated team that typically includes a project manager, a software development leader, and their team members. All the members divide the work and follow agile augmentation to finish the project.

Project-based: The entire project is done by a specific team, from scratch to finish.

3. Benefits of outsourcing software development services

Outsourcing has slowly become one of the critical parts of a start-up, small, average, even big companies. There are numerous reasons why companies may resort to outsourcing software development needs, such as:

Cost-control

One of the biggest reasons for outsourcing software development is allowing cost control**.** The company can obtain the services they need and avoid making a significant investment of hiring full-time in-house experts.

For instance, a start-up company hiring an in-house software developer, their TCE (the total cost of engagement) will cover their salary, taxes, compensation, etc. But when they choose to outsource software development, the start-up company will save the TCE instead of investing in the business.

Access to an excellent talent pool of top software developers

Outsourcing software development gives you the liberty to reach out to the global market and search for highly skilled engineers. Software outsourcing services allow you to access an excellent pool of talented top software developers worldwide.

You can choose a single service to be completed by a single developer or a team. You will find dedicated website designers, mobile app developers, DevOps specialists, etc.

Working with the best software developer will save your cost as mentioned on the above point and increase the efficiency of your company by getting assisted by various professionals without hiring a full-time software developer.

Reduced development time

In the current pace of the world, delaying work can lead to losing potential clients. Outsourcing software development expertise can help you with shorter development time because the professionals tend to work with a tight schedule while offering high-quality work.

Most companies rush to speed up their launch time in the market and often have to adjust with the quality of work because there aren’t enough developers to brainstorm the work or burdened with other company internal work.

A dedicated software outsourcing services team can help the company optimise the workload, create a custom software solution, and put a detailed blueprint to speed up the work and reduce development time.

Superior-quality software tool

An offshore software company, along with having access to a pool of IT experts, also has a team of professionals who use superior-quality software tools and deliver out-of-the-box projects.

Companies like Netflix, Google, Amazon, Walmart, etc., took leverage of the software expert team of the offshore software company to deliver the best software accessibility.

Reduced potential risk

Along with the above benefits combined, outsourcing software development is an excellent way to reduce the potential risk.

When the company employees are already working on multiple projects, you may need to invest in various marketing techniques to achieve greater scalability. It might trigger work overtime, and the quality of the work may be affected.

Outsourcing software development team helps to take advantage of the outsource team operating team capacity and lessen the company’s potential risk.

4. Offshore software development services on-demand in 2021

Software services cover designing, programming, testing, maintenance of software or application, and more. In this advanced tech-savvy world, it is essential to present the next level software development services to attract more audiences.

There are many software development services, we have picked the top five on-demand services in 2021.

AI (Artificial Intelligence) and loT

AI (Artificial Intelligence) is the proficiency of a machine or computer to mimic the human mind. AI substituted human intelligence and developed using machine learning to deliver human-like tasks.

Every industry such as health care, finance, banking, retail, manufacturing, education, and many more has a high demand for AI capabilities. AI helps the business to grow cost-effectively and boosts up to 40%.

Benefits of AI (Artificial Intelligence):

• The use of chatbots powered with AI technology helps the business to resolve customer queries 24/7. It helps in enhancing the customer experience.

• AI, combined with machine learning technology, helps analyse the data, generate predictive models and algorithms to understand customer behaviour and predict future sales.

• AI technology helps businesses to do repetitive jobs such as sending thanking emails or verifying certain documents.

AR (Augmented Reality) and VR (Virtual Reality)

Augmented Reality (AR)/Virtual Reality (VR) are some of the hottest trends in technology right now. There is more demand for AR and VR developers in software outsourcing services.

Augmented Reality (AR) lets humans feel real-life through the lens of mobile or computers. For instance, the 2016 game Pokemon Go allows the characters to pop up in the real world.

Virtual Reality (VR) creates simulated surroundings with the use of computer technology. For instance, video games with VR headset devices allow players to play the game where the virtual elements are placed into the user's real-world view through the headset.

Benefits of AR and VR technology:

• Helping industries to train their employees for emergencies. For instance, airport managers conduct training for shooting emergencies at the airport using VR technology.

• The equipment used in AR and VR technology enhanced the efficacy of learning materials and reduced the training cost.

• AR and VR technology helps to develop technical skills in various industries.

Blockchain Services

Blockchain technology has seen tremendous growth in 2021, and by 2024 blockchain solutions are expected to reach $18 Billion. Business runs on data and information. Receiving faster and accurate information is the primary goal of every business.

Blockchain is a highly encrypted immutable ledger that saves data and helps the business track their assets securely. The services can only be accessed by the members who have authority.

Benefits of blockchain services:

• Blockchain developed with an advanced technology system compared to any other platform.

• The data stored in a blockchain is immutable and stored for a lifetime. Therefore once the data is saved, it cannot be modified.

• Blockchain technology runs in a decentralised system that traces the activity on a real-time basis, minimising fake transactions.

Cloud Computing

Cloud computing is one of the requisitioned offshore software development services. There are many industries, along with government organisations, that are using cloud computing for data storage.

By 2022, the cloud computing market is expected to reach around $362 billion. This figure indicates that cloud computing is here to stay for longer.

Benefits of cloud computing:

• Saving the cost of a bulky and expensive hardware device.

• Cloud computing offers a large storage capacity at a nominal fee and has the highest encryption level that guarantees the security of the data.

• Cloud computing has a faster deployment system that allows you to save the data quickly and can be accessed from anywhere worldwide.

UX/UI Designs

UI and UX are the two terms that are usually used correspondingly, but both have different roles in technology.

UI design refers to User Interface Design, concentrates on the look of the software, the layout. In contrast, UX design refers to User Experience Design and focuses on how the software works and how users interact.

UI designers ensure that the designed page should look visually attractive, and the UX designer makes sure the page makes sense to the user and has a logical flow.

Benefits of outsourcing UI/UX designs:

• An excellent UX design helps to promote SEO ranking and have strong user experiences.

• UI/UX designs helps in reducing troubleshooting in the future and ensures the correct user behaviours from the beginning.

• A good website or mobile application design improves customer retention, hence increased productivity.

5. How to select an offshore software development company**?**

Fluent Communication

It is important to have fluent communication with the partner company. Preferable to choose a company that understands a standard language such as English. A communication gap can cause trouble in the project as well as delay in completing the project.

Workflow

The workflow of the hiring company should match with your company throughout the development cycle.

Having a top talented software engineering

The offshore software company gives you access to the best world-class IT engineers. Use their out-of-the-box ideas to create the best software project for your company.

Companies quality experience

Before choosing an offshore software company, always ensure to check the company's quality experience. Check their past references and clients; it will give you an idea about their workflow and quality of work.

Offering a full range of services

It is preferable to choose an offshore software company that offers a full range of services. There is a wide range of software development services available that might interconnect with each other, which you might not need at present but wish to add the services in the future.

Thus, instead of hiring another software developer, you can ask the same company for the add-on services. Bulk services are generally cheaper than opting for single services.

6. Top five international companies for outsourcing software development**.**

The market for offshore software development is showing tremendous growth in recent years. Amid the covid-19 pandemic, various companies look for outsourcing software development companies to save cost and reap the benefits of talented offshore software engineers.

Here are the top five international companies that are offering software outsourcing services:

1. Relia Software

Relia Software was founded in 2011, a product development company that puts great importance on scalable software architecture and user experience-driven engineering.

Relia Software developed MVPs for startups and transcendent software solutions for companies ensuring a great user experience. Relia Software has served 10+ industries and delivered more than 300+ projects in 10+ years.

Software outsourcing services at Relia Software: UX/UI design, MVP Design, AI & ML, Blockchain Technology, Chatbot Development, On-Demand Delivery App, Web Development, and many more.

2. Xicom Technology

Xicom Technology was established in 2002 as a leading company in certified mobile app development and web development. Xicom technologies have three offices — California (USA), Dubai (UAE), and New Delhi (India) served more than 2500 clients.

Xicom has a team of 300+ highly skilled developers, helping their clients uncover growth and innovation opportunities by offering them cutting-edge software outsourcing services that redefine emerging market trends and create new business opportunities.

Xicom Technology has executed more than 7500 projects globally in the field of travel & tourism, retail, healthcare, and other sectors adhering to the core principles of DevOps and Agile development.

Software outsourcing services at Xicom Technology: Custom Web and e-commerce development, Cloud Computing, Blockchain and IoT, UX/UI design, Custom Application Development, Artificial Intelligence, and many more.

3. Tavta Soft

Tatva Soft is a CMMI level 3 certified and Microsoft Gold partner software outsourcing company. Tatva Soft has more than 800 engineers working around the clock to deliver the best quality of services for the client’s business requirements.

Tatva Soft has completed 1800+ software development designs globally in the fields of healthcare, retail, public sector, education, mining, gas, oil, and many more.

Software outsourcing services at Tatva Soft: Custom software development, Web development, eCommerce, Testing and QA, UI/UX design, Mobile apps.

4. CMC Global

CMC Global company was established in 2017 and is the newest member of Vietnam IT Group company CMC Group. CMC Global was introduced to bring Vietnamese ICT products, services, and software solutions to the global market.

CMC has 500+ expert software engineers providing offshore software development services and holding the Biggest Award of Vietnam Software Industry “IT Outsourcing Service” of Sao Khue Award — for two consecutive years.

Software outsourcing services at CMC Global: Custom Software Development, Software Maintenance, Legacy Migration, Testing Services, Cloud Migration, Artificial Intelligence, and many more.

5. Science Soft

Science Soft is a 30+ years outsourcing company with experience in software development. Science Soft has 700+ engineers on board and helps startups to build and scale software applications by taking over the entire project pipeline or a part of it.

Software outsourcing services at Science Soft: Software Consulting, SaaS Development, Artificial Intelligence, IoT, computer vision, and blockchain.

Final Thoughts

Outsourcing software development services focus more on the core of the business and get talented software developers globally. Outsourcing will also help companies save on their cost and focus more on promoting the products/services.

According to the Capital Counsellor blog outsourcing statistics, by 2025, India’s IT outsourcing industry will witness a tremendous growth of 7.25% — reach $121,335,149.20, and the global IT outsourcing market will be worth $397.6 billion.