outsourced product development

Outsourcing nowadays has become a trend for companies. Successful companies outsource specific project activities or entire project development to an agency or third-party outsourcing partner. This blog offers a detailed overview of outsourced product development and why companies are searching for outsource product development partners.

Statista says, “Nearly 60% of tech companies outsource their product development projects to an outsourced development partner”. Here is a take on what KPMG says about outsourcing – 85% of the software development projects go beyond their schedule. 

Overview of Product Development   

Product development means transforming a product idea into a live product. Additionally, Product development encompasses the entire product journey. Companies identify the market gaps by conducting market research and investing their hard-earned money in developing new products.   

When we are talking about product development, it comprises of 2 things –  

  • Developing a new product from scratch or   
  • Upgrading existing features/ adding new features to the product   

For instance – Einstein box conducted market research and found a gap in the market. They figured out that toddlers could not find the right toys for themselves. So, The company developed an innovative idea of launching customized products for kids as per their age group.    

To sum up, Product development covers everything from managing products to its marketing. Product development covers-  

  • Brainstorming product ideas   
  • Doing the market research   
  • Developing a product   
  • Finally, Launching the product to the market   

What is outsourcing?  

Outsourcing means organizations outsource their services to an outsourcing partner either on a contract or on an ongoing basis. At the same time, Organizations adopt outsourcing models to take advantage of top-notch experts, improve the efficiency and productivity of the business, get continuous tech support, or take help from them in entire product development.  

If you have loads of work but need to focus on all the business areas, it’s the right time to outsource the work to somebody else who might be the perfect match for your business requirements.   

Let’s take an example of Google –  


Google has both in-house employees and remote employees. The company believes that outsourcing is the best practice to stay ahead of your competitors. Therefore, Google outsources various business activities ranging from IT development to getting e-mail support for AdWords.  

 As a result, Google itself believes that outsourcing is the best model to get exceptional results.   

Let’s consider another instance of Wise.   


Wise, as you already know, is an international payment service that makes it easier for customers to send payments abroad at an affordable price. Wise outsourced a bunch of product designers to increase its business growth.  

Outsourcing for Wise is about more than just hiring someone who falls within their budget. It is about finding the right employees who can deliver top-notch service.  

When successful brands think of outsourcing their work to an outsourcing partner, why can’t you feel about it?    

What is Outsourced product development?  

What outsourced product development

 Outsourced product development means hiring an external vendor or an outsourced partner for software development tasks to handle the entire project of a company. So, Businesses collaborate with an outsource product development partner to develop, maintain, and upgrade the products.   

 Outsourced product development is a good initiative to start when businesses have a product idea and want to convert it into a live app. Outsourcing product development helps you to create a competitive edge in the market.   

You lose business opportunities if you fail to launch a product at the right time in the market.  

For example – The CEO and founder of Mailburn (Daniel Pavlyuchkov) says, “Outsourcing product development is the best way to get involved with the remote employees for IOS development, and he was happy as he got remarkable results by outsourcing the team of developers.   

Why do you need to outsource product development?  

Likewise, There are various reasons why businesses need outsourced product development. Here are some of the reasons mentioned below-  

  • The Inhouse team does not have the requisite skills or competencies to perform a specific task  
  • When an organization is running out of time to complete the project and in the verge of meeting deadlines   
  • When you don’t have the technical expertise to develop a product, and you feel that development is not a cup of tea  
  • You are searching for creative talent who can infuse new ideas into your project   
  • When you can’t hire an employee because they demand more than your expected budget   

Process of outsource product development

Here is the 5-step guide to outsourced product development –  

5 steps to outsource product development

1. Define goals   

Firstly, the outsourced product development should be specific about your requirements. You must be clear about what you are looking for. Some organizations are searching for personnel who have expertise in building an app. On the contrary, other organizations are looking for someone who is proficient in upgrading an existing app.   

2. Time to select the right outsourcing partner   

Ultimately, you can find many outsourced product development partners. Selecting the relevant one that matches your requirements should be taken care of. When hunting for outsource product development agencies/startups, you can check out their previous work or ask them to show their testimonials.  

3. Choose the right outsourcing model.   

 It’s high time for you to choose the right outsourcing model. You need to maintain a tradeoff between risk and reward. There are various forms of outsourcing models you can choose for your business such as fixed cost , time, material model, etc.

4. Decide the communication rules

Having clear communication is important for you to make sure that the project is going on in the right direction. It is possible only when both the team are on the same page. For Instance – Team members can use communication platforms such as Slack.

5. Formalize the partnership

So, it’s the right time for you to start the collaboration project. Meanwhile, make sure to understand the contract before starting the collaboration.

Wrapping up   

If you will ask us, “Which is the best product outsourcing model,” then there is no specific answer to this. Whether you need to hire an in-house developer or think of product outsourcing, it differs from business to business. Every model has its pros and cons.   

Need help in growing your business by 3x? Talk to our experts now to discuss product outsourcing requirements.   


Q1. What are the benefits of product development outsourcing?  

Here are the benefits you can get by hiring product development outsourcing –  
Cost-effective solution   
It is better to outsource product development partners because you pay for those services you need. You can save precious dollars on finalizing payroll and managing other infrastructure expenses. Businesses can also hire outsourced product partners from different countries at different rates.   
Provides quick delivery   
Outsourced product development team delivers projects quickly. Moreover, The time required for developing projects entirely depends on the size and complexity of the project. Outsourced product developers can save you time by delivering regular projects.   
Access to top-notch experts   
Lastly, Product outsourcing allows you to access highly experienced product developers with years of experience managing multiple projects.

Q2. How to select the right partner for outsourced product development?  

Before deciding to hire an outsourced product development team, these are the factors you need to take care of –  
Firstly, Check out the caliber of your team   
Secondly, Define business objectives  
Check whether the outsourced product development team can deliver a scalable product   
Assess the performance of the project   
Lastly, Ask them whether the outsourcing product partner provides continuous support and maintenance   

Q3. What should every startup know about outsourcing product development?  

Here are the 6 things that every startup should know before hiring an outsourced product development team –  
1. To begin with, Conduct thorough research to find the perfect outsourced partner for the project
2. Ensure the outsourced product development team does not compromise with the technology standards.   
3. Choose to work with a product outsourcing partner who can do regular communication.   
4. Consider intellectual property rights. You don’t expect pirated software from the outsourced product development team. It’s better to sign a non-disclosure agreement (NDA)    
5. Whether the outsourced product development team has the available tech or not   
6. Don’t go with a cheaper partner. Assess the quality of deliverables before choosing an outsourced product development team   

Q4. Which successful software development companies start with outsourcing product development?  

1. Zomato  
2. Urban sitter   
3. Google   
4. Alibaba   
5. Skype 
6. GitHub 
7. Careem: In fact, Big Oh helped them a lot in their successful journey of becoming a unicorn 

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