Common & Hidden Costs of Web Development Outsourcing You Must Beware of  Watch out, choose wisely & save money!

the hidden costs of outsourcing web development
Oct 04
Read 6 Min

Regardless of whether you’re running a small business or a large-scale organization, you will want what’s best for it, right? Startups, scale-ups, well-established firms – and anyone in between often choose to outsource. Especially when there’s a need for qualified tech people. So, outsourced dev teams bring countless perks. But still, there could be downsides. Hidden costs of web development outsourcing might represent a major issue you must beware of. 

Now, in order to spot the irregularities, you will have to find out about the normal expenses you will have when working with freelance developers or BPO companies first. But even before that – there are other essentials to get the hang of. What is web development outsourcing, when you should consider it, and how to nail it and get the best results? Stay tuned; your guide to unlocking the secrets of third-party partnerships done right is here. 

What is web development outsourcing?

The definition of outsourcing web development is simple as ABC. It implies a widespread business practice where one company hires another to take care of particular parts of its workload. So, in this case, it entails finding a reliable BPO company trained and skilled in web technologies. Its developers must fulfill specific tasks within an agreed time frame, using a tech stack you’ve decided on. 

Now, many companies consider this business model. However, in some cases, it is quite obvious that going for it will bring substantial advantages. Learn to spot the signs and know just when to outsource: 

  • The in-house development team lacks some technical knowledge and skillsets that will be required for the project,
  • You’re unable to finish some parts of the project and meet the target date just by relying on the people internally, 
  • You are coming up short on experienced employees, and you need expert tech professionals straightaway. 

So, these are the key points to consider and get real regarding your priorities, expectations, and possibilities. Sometimes it’s simply necessary to hire a web development team outside your organization. And to choose correctly, you should do your share of research. 

Pros and cons of outsourcing web development

Each business practice has some upper hands compared to others. At the same time, none of them is absolutely perfect. Working with a freelancer or a BPO company also comes with both gains and flaws. Let’s do the benefits of outsourcing web development first. What are the main ones? 

First of all, it could save you a lot of time – and money. In fact, many companies choose to outsource precisely to shorten the time to market, skip the hiring dramas, and move on straight to the winnings. Sounds simple, but these edges only come to those who choose wisely. Then, working with external developers can also help you increase quality and boost productivity. Fresh sets of eyes, different perspectives, and entirely new approaches can lead to extraordinary results and innovation. Also, exploring the best countries to outsource to can help you get more coverage and have a much vaster talent pool at your disposal. And finally, you can scale your growth more easily and painlessly. 

So, what costs and challenges are involved in outsourcing? 

As we said, there’s no such thing as an ideal business decision, nor is there a have-it-all practice to embrace. So, here are a few disadvantages of outsourcing web development you need to wrap your mind around and strive to shuffle off:

  • weak planning and unsuitable project management represent possible risks,
  • hidden fees and even scams could appear if the BPO company isn’t reliable,
  • unintended or even purposed setbacks are likely,
  • there could be misunderstandings and miscommunication problems along the road,
  • the overall quality of the product could drop if a third-party team is more focused on quantity. 

So, what about the hidden costs of web development outsourcing? They could roll in due to various reasons. The main one is usually associated with failing to meet the deadline and pushing the time frames on. It could also happen due to imprecise business goals and requirements. Make sure to be very specific (and objective) from the very beginning. Know what you want and double-check the third-party dev team before handing them over the crucial duties. 

Your basic guide: How do you calculate outsourcing costs?

If someone plans to outsource web development or any tech roles and functions, it can be tough to predict the cost accurately. Calculating the rates is quite tricky as many circumstances impact the price of outsourcing services. Still, some of the key factors affecting the cost of web development outsourcing include:

  • The scale of the project and its complexity,
  • A precise number of developers and other professionals needed to work on your project,
  • The time frame and deadlines.

Lastly, if you choose to hire freelancers, their hourly rates might differ a lot from each other. 

Here’s an example of how it works. For instance, eCommerce is rapidly gaining popularity. People got used to buying goods, products, services, and more online. It’s more convenient, and it felt like the safest choice during the past year and a half. So, how much could an eCommerce website cost? The fact is, if you’re looking for a way to start your very own eCommerce business, the site can cost you anywhere between $15,000 and $40,000. The range mostly depends on the previously mentioned points. 

 

Now, what are the hidden costs of outsourcing web development?

Now that we have seen some of the key advantages and disadvantages of outsourcing web development, we know that finances can take a hit if you’re not careful enough. If you wonder if some extra expenses could bust in and mess up your conception, here are the points to pay attention to:

  • You could face some expenditures and unplanned drawbacks if the performance of the outsourced team is low. 

The weak performance and production are essentially marked by breaks in communication, improperly determined scope of work, ineffective project management, and increased technical requirements. 

  • Too frequent changes can draw extra fees.

It is only natural to introduce some modifications, especially in Agile environments. Still, when those changes are way too massive or frequent, the harmony between the outsourced team and the company is disrupted. Hence, you will see the effects of the hidden costs of web development outsourcing. 

  • Decreased quality will also lead to new charges. 

Some outsourcing companies dedicated to tech functions don’t offer regular testing services. So naturally, these teams appear to be cheaper. However, hiring them can cost you more in the long run. Without monitoring progress, fixing bugs, and being fully aware of whether everything works properly, you will end up paying extra later on. Not to mention that you might be the one facing the backlash from displeased customers. 

Lastly, weak architecture means more extra payments further down the line. For example, a team of web developers could make architectural choices that aren’t well thought-out and then rewrite the whole thing later – and charge for it.

So, can outsourcing increase costs? 

BPO companies usually cut the expenses by enabling their clients quick access to necessary tech skills, industry knowledge, and overall reliability. Also, they help you skip the training and onboarding processes and the investments tied to them. Ultimately, you get to miss out on the fees related to the rent, equipment, utilities, and much more. But can the hidden costs of web development outsourcing outweigh the amounts you’ve saved? 

If you don’t plan each step correctly and fail to find a suitable partner, it is possible to suffer losses. 

How do you avoid the hidden costs of web development outsourcing? 

We’ve seen the good, the bad, and the ugly when it comes to third-party developers and their fees. Now, let’s crush the major drawback of outsourcing: hidden costs that could pop up. There’s only one proven recipe – you need to come prepared. 

  • Calculate your budget, be realistic, and be transparent,
  • Know precisely what you aim to achieve and communicate clearly,
  • Find a team that shares your ambition and matches your technical requirements,
  • Let them know about the exact time frames and obstacles they’ll have to overcome,
  • Introduce them to the ideas, mission, and vision,
  • Provide them with valuable insights and take good care of the communication,
  • Ensure that everything that was agreed is carefully written in the contract.

Read the fine print and start your collaboration with mutual understanding and respect. 

Bonus tips on finding the best outside dev team 

Granted, the hidden costs of IT outsourcing aren’t the sole issue you should prevent from happening. But they’re at the top of the list of your concerns. So, make sure to spot the best freelance developer or tech company for you:

  • Check out their previous work,
  • Pay close attention to the details when reviewing the web apps or websites they have developed in the past (including responsibility, design, and more)
  • Read their testimonials and see how previous clients perceive them,
  • Contact the firms they’ve worked with and ask around,
  • Structure the questions you’ll ask the team lead or manager directly in order to fully understand how they operate and what are their strongest points,
  • Agree to take a test ride together and introduce them to the project gradually. 

If you already have an in-house team and these new developers would join them on a mutual quest, be sure that they’re compatible. Don’t neglect the significance of the strong company culture you have worked hard for. 

Kickstart your collaboration with a BPO company rightly 

Today we have learned a valuable lesson. Although there are more than 300.000 positions outsourced each year, this business practice is far from perfect. Sure, there could even be some hidden costs associated with outsourcing. But there’s also good news. Avoiding (most of) them isn’t impossible. On the contrary – learn about these risks and extra fees, and make sure you’ll rise above them smoothly. And, of course – pick the best partner out there. 

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Tatjana Zotovic