Outsourced Product Development: 4 Steps to Take

Used to be an unfamiliar approach, outsourced product development has been trending globally in the past few decades. This business maneuver allows start-ups to deliver their IT services and products to the market and their clients in minimum time while having time to focus on their core business. Statistics of Statista shows that the application outsourcing industry reached $109.10 billion in revenue in 2021 and is predicted to continue to grow in the upcoming years.

So, in this blog, based on our own experience and clients’, we will show you some steps to successfully outsource your products or services.

Table of Content

  • Outsourced Product Development: Definition and Benefits
  • Outsourced Product Development: Steps to Take
  • Summary

Outsourced Product Development: Definition and Benefits

It is a process where a company hires an external vendor to develop, deliver their IT products, services and other related tasks. This approach offers a variety of benefits to companies, especially non-technical ones since it guarantees the developers’ expertise and reduces the overhead costs.

Due to those advantages mentioned above, a number of large and prestigious companies such as Microsoft, Google or Whatsapp outsourced their technical needs at some points during their growth.

IT Expertise

 Developing and delivering an IT product or service requires more than one software professional. It may need a combination of employees including but not limited to a project manager, front-end developer, back-end developer, UI/UX designer and QA test engineer. Each of the mentioned roles includes different and difficult skill sets that usually take years of working and studying to be masterful. As a result, many companies encounter lots of obstacles hiring locally due to the limited number of highly-skilled tech talents. In this case, outsourcing software product development helps those companies escape local limitations and tap into the diverse talents in different regions worldwide.

Cost Reduction

Having access to a wide pool of tech talents means your company can reduce time-to-hire and lower the salary, thereby, reducing the overhead costs. Other expenses, such as for insurance, sick leaves, recruitment, etc can be eliminated. 

(Read more: 5 Reason To Build Your Offshore Team)

Outsourced Product Development: Steps to Take

Step 1: Define your needs

Be accurate and clear with your needs and expectations before you reach out for any outsourcing companies or build your own offshore team. Some founders want to build an app from scratch, while others are hunting for tech talents who can help them to add more features to their products, upgrade or fix bugs. Jot down a list of your needs then seek the ideal partner with experience and skills pertaining to them.

Step 2: Choose a Partner

There are a large number of software outsourcing companies all around the globe. Check out their testimonials from other clients, the methodologies that they use, etc to see whether their expertise meet your requirements. And the most important thing is paying attention to communication. The initial contact or conversation that you have will be a good predictor for future collaboration. It would be better to have face-to-face or virtual meetings with some vendors to have an insight into their attitude and expertise. 

Step 3: Choose a Model of Collaboration 

Outsourcing companies usually offer a variety of models to meet the increasing demand. Your job is to choose which of those models is needed for your projects. Consider your company’s financial budget, expectation and project’ time when deciding whether you need Time & Materials, Dedicated Engineers or Fixed-scope model.

Scheduling meetings and agreeing on communication platforms are pivotal to get all the work updated and controlled. 

(Click for Free Consultation: NSC Software)

Step 4: Formalize the Partnership

When you are satisfied with a particular outsourcing vendor, it’s time to establish an agreement. Just be sure that both parties are clear and understand the contract, together with other related rules and regulations before officially kicking off the collaboration. 


Product outsourcing development has been and will be continuing to thrive in the future. It helps companies to save time, money and increase products’ delivery time and quality with a vast talent network.

And if you are looking for an ideal partner for developers hiring or project consulting and developing, let’s share your ideas with us!

About the author
Loan Nguyen
I'm dedicated to reading and writing: read to enrich knowledge and write to help readers understand knowledge in my own words.


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