Business Scaling

Outsourcing Software Development: Global Cost Factors

Outsourcing Software Development: Global Cost Factors

Bad hires can be costly for businesses, reaching up to $240,000. On average, it takes 44 days (or more) to fill a position. But for startups or small and midsize businesses (SMB), can you afford to waste such valuable time and resources when you should be focusing on growing your business?

Many wise entrepreneurs, including tech giants like Google and Microsoft, have outsourced software development for these reasons. With outsourcing, not only are you able to access global talent and save on costs, but it also allows you to work with the right people for you.

Take it from us! Our decade-long experience as a remote staffing firm speaks for itself.

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Top 5 Outsourcing Destinations for Software Development

Outsourcing software development services is the best choice if you seek cost-effective, high-quality solutions. So, whether you're a startup looking to scale up or an established corporation aiming to reduce costs, outsourcing some of your business processes can provide the expertise and resources needed to bring your software projects to life.

The question is: where? Check our top 5 destinations for outsourcing software development.


India has long been a top choice for software development outsourcing. It accounts for 55% of the global IT outsourcing share. It has a large pool of highly skilled software engineers and cost-effective services.

But of course, the country has challenges it still has to address: its weak infrastructure. Its current infrastructure is unable to support its growing economy and population. Fortunately, India’s government is addressing this deficit with significant investments.

The Philippines

The Philippines is an emerging hub for outsourcing due to its English-speaking workforce, skilled talent, and strong cultural affinity with Western countries. Apart from that, its cost advantages are close to that of India. 

For instance, you can save as much as 83% on labor costs when you hire a developer in the Philippines. And remember, that’s just on labor cost. You won’t also have to worry about overhead expenses, should you have this hired staff working remotely.


China has about 7 million data scientists, software developers, and AI trainers, making it another promising country for software outsourcing. It also boasts competitive pricing, with average IT salaries ranging from $20 to $50 per hour. 

The country is particularly appealing if you want to tap into the Asian market. But, you have to consider that only 7% of its people can speak in English.


Outsourcing software developers in Ukraine is gaining recognition, and rightfully so. Ukrainian software development companies offer a good balance of quality and affordability, making it attractive to businesses of all sizes.

Moreover, many well-known enterprises tap into the outsourcing market in Ukraine, including Amazon and Microsoft.


Poland has positioned itself as one of the outsourcing destinations in Eastern Europe due to its skilled workforce. The country's software development companies are known for their high-quality work and adherence to international standards.

These five outsourcing destinations offer a range of advantages, from cost-effectiveness to skilled talent. When choosing where to outsource, consider your specific needs and objectives to find the best fit for your software development project.

The Costs of Outsourcing Software Development

Outsourcing software development should be an option if you’re looking to save money, access specialized skills, and focus on your business’s core activities. But it's also important to understand the costs associated with it.

Product development cost

When you outsource software development, one of the primary expenses is the cost of developing the product or software itself. This cost depends on the complexity of your project, the technology stack used, and the location of the outsourcing partner. 

For example, developing a basic mobile app may cost around $20,000 to $60,000, while a complex software solution could reach several hundred thousand dollars.

Remote developer fees

If you hire remote developers or freelancers for your software development project, you'll need to consider their fees. These fees can be hourly or project-based and typically vary based on the developer's experience and skill level. 

For instance, a remote Filipino developer with 1-2 years of experience can charge $1,100 per month, whereas a remote senior developer with five years of experience might charge $2,500. You save about 73% on labor costs compared to hiring a local developer.

Download MultiplyMii’s FREE salary guide to determine how much you can save.

Dedicated team charges

Many businesses hire dedicated development teams from outsourcing companies. These teams work exclusively on your project and often include a mix of developers, designers, and other specialists. The cost of a dedicated team can be a fixed monthly fee or based on the number of team members involved. 

The cost of hiring

Recruiting the right talent for your software development project can be expensive. This cost includes posting job openings, scheduling interviews, and onboarding and training new team members.

The recruitment process can easily add up to thousands of dollars, especially if you follow a do-it-yourself approach. Aside from costing you money, it can also cost you your time and energy.

For instance, the interview process alone can take almost a whole month. This is mainly because hiring skilled tech talent is more challenging because of the required technical skills. But if you partner with a remote staffing company like MultiplyMii, take your hands off sourcing and vetting candidates and let us handle the rest.

Knowledge transfer

You'll need to ensure your outsourcing partner understands your project requirements and goals. Being aligned with them is important for the success of your software development project.

Knowledge transfer involves training your outsourced team and sharing critical information about your business. This process can consume time and resources, impacting your project's overall cost.

Server management

If your software project requires servers or cloud infrastructure, you must budget for server management costs. These costs include server setup, maintenance, and hosting fees. 

For instance, a minimum of $ 5,000 is what you should expect for a small business server cost.

Contract formation

Lastly, you'll incur costs related to contract formation when outsourcing software development. This involves legal fees for drafting and reviewing contracts and negotiations with the outsourcing partner to ensure both parties are on the same page. 

The cost of contract formation can vary widely, depending on the complexity of the project and the legal expertise required.

It's essential to consider and budget for the various costs involved in outsourcing software development. By understanding these costs, you can have a successful outsourcing partnership while keeping your budget in check.

Main Factors Affecting Software Costing

Imagine you want to build a cool new mobile app or website; how much will it cost? Well, it depends on three main factors: 

Type of software project

The type of software project you're planning plays a significant role in determining its cost. Different projects have different needs and complexities. Here are a few examples to illustrate:

1. Mobile apps

Creating a simple mobile game costs less than developing a complex app. Why? For instance, games typically have fewer features and are less complicated than apps that require real-time tracking, maps, and payments.

2. Websites

Building a basic website for your local bakery will be less expensive than creating an e-commerce site like Amazon. The latter requires features like user accounts, product listings, and secure payment processing, which increase the overall cost.

3. Enterprise software

Developing custom software for a large corporation can be costly due to its complexity and the need for high-security measures. Imagine building a unique software system for a multinational bank; it's a big project with a pretty hefty price tag.

Size of software project

The size of your software project is another significant factor affecting its cost. Think of it as the difference between building a tiny house and a skyscraper.

1. Small projects

If you're developing a simple calculator app for your smartphone, the project size is small, and the costs will be relatively low. These projects often involve a single developer or a small team and require less time and resources.

2. Medium projects

Creating software for a mid-sized business, such as an inventory management system, falls into the medium project category. It's more extensive than a small project, involving more developers and resources and a higher cost.

3. Large projects

Building a new operating system or a nationwide online education platform are examples of massive projects. These require large teams, years of development, and substantial financial investments. As a result, they come with substantial price tags.

Development team size

The size of your development team can significantly influence the cost and timeline of your software project.

1. Small teams

Smaller teams with fewer developers can handle smaller projects efficiently and cost-effectively. They have clear communication and can adapt quickly to changes.

2. Medium teams

Medium-sized teams are suited for projects of moderate complexity. They balance resources and efficiency, making them cost-effective for medium-sized projects.

3. Large teams

Large teams are essential for large and complex projects like creating a new social media platform. These projects require diverse skills and expertise, which a big team can provide. However, they also come with higher labor costs.

Understanding the main factors that affect software costs—such as the type of project, project size, and development team size—is essential for planning and budgeting. 

Highest Paying Software Development Jobs

Software development has become one of the most sought-after and well-compensated fields. As an employer or business owner, you may wonder which software development roles command the highest salaries. To give you an idea, we've compiled a list of the top software development jobs that offer impressive paychecks and bring immense value to your organization.

Chief Technology Officer (CTO)

A CTO is a senior executive responsible for a company's technological vision and strategy. They ensure that technology is aligned with business goals. CTOs are among the highest-paid professionals in the tech industry.

Data Scientist

Data Scientists are the detectives of the digital world. They analyze vast amounts of data to help you understand customer behavior, market trends, and operational efficiencies. These professionals are in high demand across various industries, including finance, healthcare, and e-commerce.

Enterprise Architect

Enterprise Architects focus on aligning an organization's technology systems with your objectives. They design and oversee the implementation of strategies that make all technology components work seamlessly. Their expertise is crucial for large corporations. 

Site Reliability Engineer (SRE)

SREs are responsible for maintaining the availability and performance of websites and applications. They are crucial in preventing downtime and ensuring a seamless user experience.

Software Engineering Manager

Software Engineering Managers are the leaders who oversee teams of software developers, ensuring that projects are completed on time and within budget. 

Software Architect

Software Architects design the overarching structure of software applications, ensuring they are scalable and efficient. They are highly skilled professionals who can earn substantial incomes. 

Software Engineer

Software Engineers are the code maestros who write and develop software and applications. They are typically compensated with annual salaries that range from $100,000 to $140,000.

Mobile Developer

With the proliferation of mobile devices, Mobile Developers are in high demand. They design and develop applications for smartphones and tablets.

Cloud Engineer

Cloud Engineers manage and optimize cloud-based infrastructure and services. This makes sure that your business is scalable and ensures security and cost-efficiency.

Data Warehouse Architect

Data Warehouse Architects are experts in designing and managing data storage systems. They ensure your business’s data is organized, accessible, and secure.

These high-paying software development roles bring exceptional technical skills to your organization and contribute significantly to its success. Remember that salaries can vary based on factors like location, experience, and the size of your company. 

Unlock Cost-Efficiency and Success With Your Software Development Team

Building your own software development team doesn’t have to break the bank.

With the right approach and partner, it’s not impossible.

Team up with MultiplyMii and build your development team with skilled remote developers. Never mind the tech talent shortage because we got you covered!

Let us help you bring your software vision to life and propel your business to unparalleled success.

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