What is IT Outsourcing? Know and Choose the Best Software Development Company

Picture of Ashlin Jose

Ashlin Jose

Brand Communication & UX Writer

Looking for Expert Software Developers?

Connect with Top IT Outsourcing Providers!
best software development company

To be the best software development company or as a business expands, the need for its competent facilities increase; they may lack the internal resources to manage their hiking tasks and operations. This allows the company to search for possible professional support with minimum expense. And here, in this situation, outsourcing works best in software development. In the case of outsourcing your software development, it is crucial to be very well aware of IT outsourcing and its essentials. Also, it is imperative to consider the technical expertise of an outsource provider before assigning them into the development project. 

The companies outsource their IT functions to cut costs, expand the talent pool, and free up resources. Therefore, it’s vital for you to know what type of IT outsourcing is ideal for your business to choose the best software development company.

Streamline your software development process with our cost-effective outsourcing solutions.

IT Outsourcing and the Types of IT Outsourcing Models

IT outsourcing means, a practice of delegating your business requirements to an external entity rather than your company’s in-house team. These assigned external entities work on and deliver digital products based on your needs. The idea of outsourcing sprouted as a cost-saving activity and later on grew as a trend to explore the untouched benefits of outsourcing and gain access to suitable talent pools.

The main types of IT outsourcing models can be divided into two main categories, Location-based IT Outsourcing, and Relationship-based IT Outsourcing. Now let’s dig them out in detail.

Location-based IT Outsourcing

The location-based IT outsourcing is based on the distance between the company and the outsourcing team. This category is further divided into four types, Onsite IT Outsourcing, Onshore IT Outsourcing, Nearshore IT Outsourcing, Offshore IT Outsourcing. 

Onsite IT Outsourcing

The outsourced team will be working along with the in-house team, and this is called Onsite IT outsourcing. The onsite outsource team speeds up the learning and working process within the company.

Onshore IT Outsourcing 

In Onshore IT outsourcing, the outsource team will be working in the same region or country as the company assigned them. In this case, the communication between the two parties becomes more explicit; as they share minimal language differences, also there won’t be any time and cultural barriers within them.

Nearshore IT Outsourcing 

When a company chooses the outsourcing team from their neighboring countries, then it is called Nearshore IT Outsourcing. In this scenario. time zones will differ only by a few hours. Even though there will be some linguistic differences, Nearshore outsourcing is much more cost-effective than Onshore outsourcing.

Offshore IT Outsourcing 

Outsourcing a project development work to more distant entities is known as Offshore IT outsourcing. The outsource team will not be from an immediate neighboring country, and the time difference will be five or more hours. Offshore outsourcing can save up even more money based on the country you choose to acquire an outsource team. Having an efficient project manager and a translator can ease the communication between the company’s in-house and the outsource team.

Relationship-based IT Outsourcing

There will be a focus on ownership, responsibility, and how a third-party provider works on these factors in Relationship-based IT outsourcing. This category contains three types of IT outsourcing, Staff Augmentation Model, Dedicated Team Model (Managed Team Model), Project-based Model.

Staff Augmentation Model 

Like the onsite IT outsourcing, in the Staff Augmentation Model, the outsourced team comes under the same roof as your in-house team to manage the project developments. They work as a part of your team for a tenure period that you assign. Here, the client will have the upper hand over all the development processes. One of the best things about this model is that it cuts off the extra time you give in for the tiring recruitment process, in order to hire a staff temporarily.

Dedicated Team Model (Managed Team Model)

The dedicated team model, widely also known as a Managed team model, is a partnership model, where the service provider and the host company share an agreement of providing service, by the former, on a long time basis. Both the provider and host share the responsibilities. The IT outsource team, in this case, works separately from your in-house team, however, they will update the development process to the client. In this model, too, the client will have an upper hand on the project.

Project-based Model 

In the Project-based model, the project development takes place entirely under the control of the IT outsource team, i.e., the host company will be involved only at the time of handing over and delivery of the assigned project. This is one of the most popular outsourcing models with proven effectiveness for project developments even though there is only less involvement of the stakeholder

Connect with our experts for cost-effective outsourcing solutions!

How to choose the best Software Development Company?

It becomes quite a challenge while choosing the apt software development company in order to acquire an IT outsource team to augment your in-house team. Joining hands with the wrong team can waste your funds, lead to delayed delivery, and in some cases, weakly built products as the final result. Check out for the qualities given below before tying up with a service provider.

Service Experiences

First of all, ask yourself what product you plan to build and what are the essentials you need to reach your intended result. With this in mind, try to assess the software development service providers (IT outsourcing team). Look out whether they are suitable for your project by asking them about the team structure and whether they have experience with the projects similar to that of yours. Make sure that they are well-equipped with cutting-edge technology to take up your work. 

Prioritizing UX/UI

Some software development service providers may prioritize the design, while some others may prioritize technical workings. This kind of prioritization can cause damages along the way. Hence you must seek out a software development company that has experience in both the UX/UI and technical aspects. 

Quality Assurance 

Having a Quality Assurance team in the software development project helps to note the errors that the developers might miss. Also, including a QA team shows the dedication of the service providers to detailing. Agile and DevOps are the tools that focus on iterative releases, and this will give you an ongoing feedback loop.

Effective Communication 

Communication is the essential bond that joins the outsourcing team and the host company. Only through effective communication, you could see progress in a project as well as the final product as a success. Here, you can mitigate the misunderstandings by discussing the project progressions in a way that you can understand.


After choosing a software development company to outsource a team, validate their project experiences. Seek accreditations for their performance claims. This is the best way to confirm their capabilities.

The Pricing Model

You could see various types of pricing models in the software development field. It is you who have to decide the model that is right for your project. To note that, collaboration with the providers following a fixed model, you will be losing flexibility on your project, while on the other side, the providers with a flexible model allow you to pay according to the progress in the project.

Why is it necessary to choose the best Software Development Company for your project?

When entering into a partnership with an IT outsource team, the chances of a project being successful are high as well as there are chances that things may go wrong. With a little bit of carelessness, a poorly built product can lead to financial as well as time loss. Therefore, it may affect the reputation of your company. That is why choosing the best software development company for your project is necessary. Partnering up with the right team paves all the paths to success.

Let’s transform your business for a change that matters.

F. A. Q.

Do you have additional questions?

IT Outsourcing is the practice of delegating business requirements to an external entity rather than an in-house team. Companies opt for it to cut costs, expand talent pools, and free up resources. It is particularly useful when internal resources are insufficient for handling increasing tasks and operations.

There are two main categories: Location-based IT Outsourcing (Onsite, Onshore, Nearshore, Offshore) and Relationship-based IT Outsourcing (Staff Augmentation, Dedicated Team, Project-based). Each model has unique features, advantages, and considerations.

Choosing the right model involves considering factors such as project complexity, budget, and communication preferences. Understanding the differences between onsite, offshore, staff augmentation, and project-based models helps in making an informed decision.

When choosing a software development company, factors like service experiences, prioritizing UX/UI, having a dedicated Quality Assurance team, effective communication, accreditations, and the pricing model should be considered. These ensure that the chosen company aligns with the project's goals and standards.

Choosing the best software development company is crucial as it significantly impacts project success. A well-chosen team minimizes the risk of financial and time losses, ensures the development of high-quality products, and safeguards the reputation of the company. Partnering with the right team is essential for a successful outcome.

Let's transform your business for a change that matters

Read more blogs

Trusted by brands across the globe

SP Jain School of Global Management
Onstream media
The responsiveness of the Enfin team was excellent, & we highly recommend Enfin for any project that requires a reliable, efficient, & professional touch.
Anoush Khachikyan
Anoush Khachikyan

Founder, Concierge Care Plus

Need assistance?

Get a call back from our project consultant!