6 Reasons Companies Are Outsourcing Software Development in 2023

As the talent gap for software engineers continues to grow, outsourcing software development will increase in 2023. Every month, more and more executives are discovering significant benefits to outsourcing that they didn’t realize were possible. Following are some of the top reasons companies are outsourcing software development in 2023.

1. Reduced Costs

Outsourcing software development allows companies to reduce costs by 40% – 70%. They save on the cost of infrastructure and resources–hardware, software licenses, and other equipment. They eliminate the need to hire internal staff members to recruit and manage members of the development team. Most importantly, companies can achieve significantly lower development costs by engaging nearshore or offshore developers.

2. Speed To Market

Businesses can develop customized solutions faster than traditional methods when they take advantage of an experienced third-party provider’s resources and expertise. They leverage the vendor’s existing processes and tools for efficient software development. They also capitalize on the firm’s ability to quickly assemble, scale up, or scale down teams. With more efficient development processes and faster onboarding, companies can launch products more quickly and frequently than rivals who have not yet adopted this strategy.

3. Improved Flexibility

With constant changes to their industry or customer’s needs, outsourcing development gives businesses greater flexibility to adapt without having slow internal processes bogging them down. They can make use of advanced technologies without having large capital expenditures associated with procuring such technology themselves; instead, the vendor supplies everything required at a lower cost due to its efficiency rate being higher than most organizations’ own IT departments. Some software development companies can also provide short-term boosts in developer hours on a project due to the ability to draw from a large, multinational workforce.

4. Specialized Expertise

Outsourcing custom software to an experienced vendor gives businesses access to highly skilled talent that they may not be able to find, attract, or retain internally. This enables them to develop applications with specialized features and capabilities, giving them a competitive edge over their rivals who are unable to do so. The resources available from outsourcing companies also allow businesses to keep up with the latest technologies and industry trends. Furthermore, these vendors often employ staff members who specialize in specific areas such as mobile app development or artificial intelligence, giving clients access to highly qualified individuals without substantial overhead costs and risks associated with hiring permanent employees.

6. Stay Focused on Core Business

Most companies outsource their software development to stay focused on their core business while leveraging a software company whose core business is software development. They believe what famed business visionary, Peter Drucker, taught, “Do what you do best and outsource the rest.” Successfully outsourced software projects keep both businesses spending their energy on the sweet spots of their unique passions, experience, and profitability.


Companies are outsourcing software development at increased rates every year. In fact, current reports indicate 60% of companies are outsourcing software development. With lower costs, faster time-to-market, improved flexibility, access to specialized talent, and more bandwidth for executives to focus on their core business, it’s no surprise that some of today’s fastest-growing companies are outsourced software development firms.

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6 Reasons Companies Are Outsourcing Software Development in 2023