In today's fast-paced and technology-driven business environment, it is crucial for companies to outsource their software development. Outsourcing is beneficial for businesses because it enables them to be efficient and agile in building their software applications.
If you're thinking about outsourcing your software development, deciding where to start can be difficult. Should you look for freelance developers or turn to software development agencies for their services?
Below, we'll examine the advantages and disadvantages of both freelanced and outsourced software development options and determine which approach is the best fit for your needs, industry, and company.
Freelance software developers are skilled contract-based workers that companies can outsource to help them in the creation of their software applications. A freelancer usually offers certain skills that they specialize in, which can help boost an already existing in-house team or a team consisting of several other freelance developers.
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In the ever-changing realm of software development, freelance software developers are becoming increasingly valuable and adaptable resources for businesses of all sizes. We'll highlight the advantages of collaborating with freelance software developers, including their specialized skills, cost-effectiveness, and ability to deliver quality work quickly.
Individual freelancers cost less to hire than getting a full-service software development agency. This is a major consideration given that 70% of businesses choosing to outsource do so to reduce costs and save money, according to a Deloitte study. 
Hiring freelancers would provide value for money as they are experienced in handling various projects and clients in their niche. Plus, they do not require the same benefits as regular employees. You, as a client, pay for the specific service you require.
Instead of hiring an employee with many benefits, a company may employ one or two freelancers to bolster its development team. Freelancers work on a contractual basis. They are paid solely based on the services and results they produce, making the hiring process smooth and seamless.
Hiring a freelancer also gives businesses access to their specialized skills to help grow the development team's capabilities. Companies can also hire freelancers who are generalists. They tend to have experience in and continuously branch out to various areas in a field or industry.
As learners, freelance developers can handle multiple tasks and functions simultaneously, which is a positive characteristic. However, they may need to possess expert-level skills. Whether they are generalists or specialists, companies can benefit from the convenient services freelance developers provide.
Freelancers are flexible. You can hire certain skill sets and assign tasks according to your needs, wants, and preferences. You also have the option to teach them the ways of the organization, culture and train them with a few soft or hard skills as you see fit.
They can be fully integrated with the organization like an in-house employee, or they can be at arm's length, depending on the client.
Since they are flexible, they can integrate easily and build trust with the in-house team and organization. Some, who are a good fit with their clients, build trust over time that they eventually become a part of the organization.
This is thanks to the closer communication, connection, and smoother collaboration that is usually forged between a client and a freelance worker compared to software development agencies. Improved communication leads to better alignment and can enhance team efficiency.
Freelance developers have a lot of benefits. However, there are also some disadvantages to being a freelance software developer. Below, we will discuss some of the most common freelance developers disadvantages.
To create software efficiently, it's crucial to have a cohesive team rather than relying solely on freelance workers. This ensures a smooth and timely process.
Before hiring freelance workers, a company must either have an existing team or build a development team made up of multiple software freelancers. This means you'll have to go through the hassle of building your team first, hiring individual workers, setting up standards and procedures, identifying performance metrics, and laying down safety and security protocols before starting the development process.
It is not easy to hire freelance workers as you are unsure if they can deliver on the skills they claim to have (unless they have a free trial for you to test out, but most likely, you won’t see any). It will take some time – most likely would take a long-term work agreement – to see if they are a good fit with the team and the organization.
For companies seeking to enhance their in-house development team with specific skills, hiring freelance developers is ideal. It is also suitable for organizations that want to be closely involved in the project and have the time and patience to build the development team and learn the necessary skills.
When you hire a software development agency, they offer dedicated development teams tailored to your project's needs. These teams, equipped with a proficient project manager, oversee the entire development process—from initial planning to deployment and ongoing maintenance.
When you trust your project to these skilled teams, you can rest assured that your development journey will be streamlined and efficient. This gives you the opportunity to concentrate on other areas of your business while the experts handle the technical execution.
In today's rapidly evolving digital landscape, businesses are increasingly recognizing the pivotal role of technology in driving growth and innovation. When it comes to software development, enlisting the expertise of a reliable agency can prove to be a game-changer.
We will explore the various benefits a software development agency brings, from accessing specialized talent to streamlining development processes and maximizing efficiency.
At a certain level, agencies are trusted as they have the experience and expertise in catering to clients and making sure that they get the most service or output out of their money. Agencies maintain a certain standard in the quality of service they provide, and every client feedback and comment is important to them for business continuity.
In this respect, agencies have a mission to meet and even go beyond client expectations to keep them happy. So this will reflect in their delivery and output – quick responses, quality output, regular reporting and updates, agile team, an initiative in problem-solving or avoiding a potential crisis, and many more.
Clients are assured of receiving quality work equivalent to the money they invested when they book an agency. Agencies must provide quality services, or else they will compensate you, the client, for any errors or shortcomings on their part.
While software development agencies offer a range of benefits, it is essential also to consider the potential drawbacks. Below, we'll highlight the common disadvantages of working with a software development agency. One of the primary concerns is the cost, as hiring an agency can be more expensive than having an in-house development team.
Additionally, communication challenges may arise if the agency is in a different time zone or needs more transparency in its processes.
When you hire agencies, the upfront cost is usually higher since you're paying for an entire team. For smaller businesses, this can be difficult to sustain in the long run because it's a sudden and significant expense. It's more feasible to hire individual freelance developers over time and build up your team gradually.
Suppose a company wants to realize profits sooner. In that case, hiring an agency with a proven track record of experience or one focusing on bringing value and agility for its clients, regardless of their experience or size, may be worth it. This way, the software can be delivered faster than expected, which justifies the costs.
We’ve said agencies can give assurance, yes, but there are also some risks involved with high costs. As you hire a whole team of freelance developers, you are counting on the team to take charge of the project from start to finish. But if something goes wrong or you find out that the team is not a good fit for the company, it is hard to change service providers midway as the team already knows the project – even if you are not satisfied with their services.
Getting a whole team also means less control and oversight of the project. Yes, clients can still be involved, but paying an agency means you are paying for a complete team with a project manager. They can execute, manage, report, and deliver the project according to the briefs provided to them, whether or not you are involved in the process.
This option is ideal for businesses that lack specialized knowledge in software development, require a flexible team, and have the financial resources to afford hiring an entire team for an extended period, ranging from months to years.
A managed development team like Gigster is the most flexible as it provides a pool of experienced software developers and project managers with specific competencies per industry or field. The network can assemble on-demand teams or present individual hires according to the software development needs of the client and the industry.
This ensures that the company gets the team or individual talent that is tailor-fit to their needs, the culture of their organization, their project specifications, and their business goals.
Even midway through the project timeline, if a company requires adjusting the team, the managed developer network can fulfill this. Whether adding certain skill sets and talents or reducing workers midway for a lean team, managed developer networks such as Gigster do this through the use of artificial intelligence (AI) and other tools to configure and improve team structures, efficiency, and agility in project development.
Companies like Gigster help clients meet their needs at every stage. Gigster is a fully managed software delivery platform providing companies access to over 900 global tech experts in different niches and fields, who are the top 1% of talents in their respective industries.
A managed developer network takes outsourced software development to the next level with its use of new technologies and top talents to assemble a team with the necessary skills to complete the project and to provide solutions for clients and their software projects.
Overall, it can be confusing to know which type of outsourcing would be best for your software application project. But having the option to hire a team and having the flexibility to adjust it to your requirements at every stage is important and can lead your project to success.
1. Deloitte (2018). 2018 Global Outsourcing Survey. [online] Deloitte United States. Available at: https://www2.deloitte.com/us/en/pages/operations/articles/global-outsourcing-survey.html.