Business Scaling

Boost Your Business’s Cost-Efficiency: Benefits of Outsourcing Software Development

Boost Your Business’s Cost-Efficiency: Benefits of Outsourcing Software Development

Whether you're a startup or a global corporation, software development is now the heartbeat of modern business. But it doesn't come cheap, not to mention the complex processes that come with it. 

It involves tasks that need seasoned professionals, top-notch tools, and endless hours of coding and testing – all these can add to a significant financial burden. 

But don’t worry – every challenge has a solution. 

Enter outsourcing software development. It has a lot of benefits, especially in cost reduction, for businesses grappling with their software development needs.

We know this to be true, having aided over 250 global businesses in achieving their objectives without breaking the bank. MultiplyMii’s success stories can attest to this. 

But before that, let’s dive into the advantages and cost-effectiveness of outsourcing software development below!

The Costs Involved in Software Development

Outsourcing software development can be cost-effective for businesses looking to develop high-quality software. However, it's important to understand the costs involved in software development before outsourcing it.

One of the main reasons why companies outsource is the potential for huge cost savings. Outsourcing to regions with lower operational costs can result in reduced expenses. This can be salaries, infrastructure, and overhead. 

However, keep in mind that outsourcing rates in countries like the Philippines can vary depending on your chosen service model: dedicated teams, project-based, and remote staffing.

Dedicated teams model

Dedicated teams are a popular service model for companies that require a long-term development team. This service model provides a full-time team of developers who work exclusively on your project. The cost of a dedicated team is typically higher than other service models due to the exclusivity of the team.

Project-based model

Project-based outsourcing is a service model ideal for companies that must complete specific projects. This service model is priced based on the project's scope and the required completion time.

Remote staffing

Remote staffing is a service model that empowers you to hire remote staff and enable them to function like or with your in-house team. Remote talent usually has high-level skills needed for niche tasks like software development. For example, in MutliplyMii, we can help you hire remote developers to work with your existing development team. This service model is ideal for companies that require additional resources. The cost of remote staffing is typically lower than other service models due to the team's flexibility.

In addition to the service model, the cost of outsourcing can also be affected by factors such as 

  • Complexity of the project 
  • Size of the development team
  • Location of the outsourcing company

It's important to carefully understand outsourcing software development costs before deciding. While outsourcing can provide significant cost savings, it's important to choose the right service model and outsourcing partner to ensure the success of your project.

How To Control Your Outsourced Software Development Budget

Outsourcing software development can be a cost-effective way to get quality work done. So, keep an eye on your budget to ensure you're getting the most value for your money. 

Here are some tips to help you control your outsourced software development budget.

Check detailed cost breakdown in contracts

Before signing a contract with an outsourcing provider, ensure you understand the project's detailed cost breakdown. 

This should include:

  • The hourly rate of developers
  • The estimated number of hours
  • Any additional expenses, such as hardware, software licenses, or travel costs

Take this costing for example:

Be sure to clarify any ambiguous terms or conditions in the contract to avoid unexpected expenses later.

Monitor project expenses in real-time

Monitor project expenses in real-time to keep your outsourcing project within budget. This means: 

  • Tracking the time spent on each task
  • Comparing it to the estimated time
  • Identifying any discrepancies 

You can use project management tools to track your outsourced team’s time, expenses, and progress. This will help you identify any potential budget overruns early on so you can take corrective action.

Align costs with project milestones and deliverables

As you work with an outsourcing partner, aligning costs with project milestones and deliverables is crucial. This means breaking the project into smaller tasks and setting clear targets for each stage. 

Use productivity tools to help you keep up with your goals. Schedule a regular meeting and see what targets you are hitting. This way, you can allocate your budget correctly for each milestone or deliverable based on progress and feedback. Moreover, this will help you keep the project on track and within budget.

Adjust budget to changing project requirements

Let’s face it. Outsourcing software development projects can be unpredictable, and project requirements may change over time, whether you like it or not. 

So, to avoid budget overruns, be flexible and adjust your budget accordingly. This means reviewing the project budget regularly and making adjustments as necessary based on changing requirements, unforeseen challenges, or new opportunities.

Be transparent

Finally, being transparent with your outsourcing partner about your budget constraints is important. This means communicating your budget limitations clearly and openly and working with them to find cost-effective solutions that meet your needs. 

At MultiplyMii, we value transparency. After all, transparency is crucial for an effective partnership. From the start of your discovery call, until you’ve officially onboarded your talent, you’ll have a hands-off recruitment experience but one tailored to your needs. 

Controlling your outsourced software development budget requires careful planning, real-time monitoring, and flexibility. Follow these tips to keep your project within budget and achieve your desired results.

Cost Reduction Benefits of Software Development Outsourcing

Companies always look for ways to save money while delivering high-quality products and services. After all, its costs are no joke, ranging from $3,000 to $120,000. 

This is where outsourcing software development comes in – a powerful and proven strategy to reduce costs.

Lower labor costs in offshore destinations

One of the most significant cost advantages of outsourcing software development is the lower labor costs in offshore destinations. 

For instance, the average annual salary of a software developer in the United States is around $100,000, while the same developer in the Philippines earns around $50,000. By outsourcing software development to offshore destinations, companies can save up to 70% or more of their labor costs.

Reduced infrastructure and overhead costs

Outsourcing software development can also lead to reduced infrastructure and overhead costs. 


Imagine this: when you hire a local software development team, you must provide them with office space, equipment, and other resources. 

On the other hand, when you outsource software development, the outsourcing company takes care of all these expenses. Additionally, when you partner with a remote staffing company like MultiplyMii, you save as much as 83% on labor costs without adding to your overhead.

No recruitment and training costs

Recruiting and training software developers can be time-consuming and expensive. But you don't have to worry about recruitment and training costs when you outsource software development. Your outsourcing partner covers these expenses, allowing you to focus on your core business activities. 

Moreover, did you know hiring for tech roles can take almost a month? Imagine how much of a delay it’ll cost, especially if you lack recruitment experience.

Minimized employee benefits and human resource (HR) expenses

In addition to salaries, companies also have to provide their employees with benefits like health insurance, vacations, and other perks. 

When you outsource software development, you don't have to worry about these expenses. The outsourcing company shoulders the employee benefits as well as the HR expenses.

Regarding HR expenses, the average cost per hire is nearly $4,700. According to E.L. Goldberg, founder of a talent management company, the total estimate of hiring a new local employee can be several times more than the position’s salary.  

With all these benefits in mind, outsourcing software development is a cost-effective solution for companies of all sizes. So, get to keep your expenses low and save money through outsourcing. 

Reduce Costs But Maintain Good Software Quality 

When outsourcing software development, balancing costs with quality is a critical factor. 

Do you agree that while cost is an important consideration for any business, it should not come at the expense of software quality? Let’s further discuss it…

The importance of not compromising software quality

Software quality is crucial for the success of any software project. Poor quality software can lead to costly errors, delays, and project failure. 

Outsourcing software development to reduce costs should not come at the expense of software quality. It is important to ensure that your outsourced team still has the necessary skills, experience, and expertise to deliver high-quality software that meets your requirements.

Strategies for maintaining quality while reducing costs

You can use several strategies to maintain quality while reducing costs when outsourcing software development. 

  • Encourage open communication

One effective strategy is establishing clear communication channels with the outsourced team. This includes regular meetings, progress reports, and feedback sessions. By maintaining open communication, you can guarantee the outsourced team is on the same page with your expectations and requirements.

  • Set standards and guidelines

Another strategy is to establish clear quality standards and guidelines. This includes:

  • Defining the software development process
  • Implement testing procedures
  • Have quality assurance measures

By setting clear quality standards, you can ensure that the outsourced team follows best practices and delivers high-quality software.

Finding the right balance

We don’t blame you. It can be tempting to choose the lowest-priced provider. But best believe that it is essential to consider the long-term costs of poor quality software. 

Choosing a provider that delivers high-quality software at a reasonable cost ensures that your software project is successful and cost-effective.

Outsourcing software development has become a popular trend in recent years, and for good reason. By outsourcing, you can access a wide range of benefits that can help your business grow and succeed, including:

  • Access to expert consultancy
  • Broad choice of technologies
  • Custom choices of software development
  • Flexibility and scalability
  • Cost savings with professional project management
  • Professional quality assurance
  • Ability to address app maintenance

So, to improve your development projects, consider all the benefits of outsourcing software development and see how it can help your business flourish.

Enjoy The Benefits of Having Your Software Development Team

Can you imagine having your dedicated software development team without the heavy financial burden of overhead costs?

We’re telling you that it’s possible!

With MultiplyMii, grow your remote development team and not your overhead!

Embrace the freedom to focus on innovation, growth, and turning your ideas into reality, all while enjoying the incredible cost-saving benefits of remote staffing.

After all, it's not just about cutting costs; it's about expanding your possibilities and propelling your business to new heights.

Start your path to success today! Book a discovery call with us.

Get 3 FREE quotes
From a dedicated recruitment specialist

Frequently Asked Questions