How Much Does it Cost to Outsource Software Development?

Outsourcing is done by many companies, but why? That is because it can help them save more money, have access to more talent, and have flexible engagement models.

Whether the company wants to build a custom app, an e-commerce platform, or any different kind of software, companies require solutions that can help them scale, while they are also reliable and cost-effective. This makes outsourcing important.

Outsourcing software development means hiring another company or a team from a different country to build your software. This could be anything from a mobile app or website to a full business system.

It helps you scale your project up or down without having to go through the hassle of hiring or laying off staff. However, the most common and pressing question remains: how much does it cost to outsource software development?

Well, there is no single answer to it. That is because the cost can depend on various factors, which we will discuss further in this guide.

We will unpack everything you should know about outsourcing software development costs, including price breakdowns based on regions, pricing models, hidden fees, budgeting tips, and more.

So, if you are thinking of outsourcing your next project, but don’t know how much you will need to invest, you are in the right place. Without any ado, let’s get started!

What is Outsource Software Development?

Outsource software development is when a company hires a team or agency externally to build software for them rather than using its staff. This could include developing:

🔘Mobile apps

🔘Websites

🔘Business tools

🔘Custom software solutions

The outsourcing team can be located:

🔘In the same country (onshore)

🔘In a nearby country (nearshore)

🔘In a different part of the world (offshore).

Many companies choose to outsource because it helps them:

🔘Save money

🔘Access skilled developers quickly

🔘Complete projects faster

Outsourcing allows businesses to focus on their necessary work while experts handle the technical side. It is a flexible and cost-effective way to get high-quality software built, while it also doesn’t take much time and requires fewer expenses than hiring full-time developers.

Total Cost to Outsource Software Development

The total cost to outsource software development can be between £8,000 and £70,000+. It depends on the various factors. Here is just a gist of some of the factors. It can be the:

🔘Size of the project

🔘Where the developers are located

🔘How skilled the team is.

For example, building a simple mobile app with basic features can cost about £8,000, while an e-commerce platform that is quite complex to make and will also include user logins, payment systems, and admin dashboards may cost over £50,000.

You need to choose them based on what your budget allows. Selecting a team from countries like India or Vietnam usually costs less than working with developers from the UK or the US.

Here is a table showing costs for different project types and regions.

Cost Comparison by Region

Outsourcing software development can save you a lot of money, but the final cost depends on where your development team is based. The cost of outsourcing software development can differ depending on how much experience the team has and the pricing model they offer.

Here is the cost comparison by region and what you can get if you choose them.

1. South Asia (India, Pakistan, Bangladesh)

Average Hourly Rate: £10 – £25

The cost can vary according to the software development partner you choose to outsource. The best places to outsource software development are in South Asia, particularly India. There are a lot of talented and competent developers, project managers, and testers in these areas.

This region is ideal for:

🔘Startups that want to build MVPs

🔘Businesses with limited budgets

🔘Projects that require ongoing development support

2. Eastern Europe (Ukraine, Poland, Romania)

Average Hourly Rate: £25 – £50

Eastern Europe is also an excellent region where you can find the best quality work, technical education systems, and better alignment with European time zones. Developers in this region are often fluent in English and offer good communication.

This region is ideal for:

🔘Web or SaaS projects that are mid to large-scale

🔘Clients want quality, but also the project should come within their budget

🔘Businesses that want to have common working hours in the UK/EU

3. Southeast Asia (Vietnam, Philippines, Indonesia)

Average Hourly Rate: £15 – £35

Another good region to outsource to is Southeast Asia. Vietnam and the Philippines are especially attractive because of the low costs and good English communication. Many companies in the region focus on mobile and web development.

This region is ideal for:

🔘Simple to moderate mobile apps

🔘Companies looking for lasting partnerships

🔘Businesses with flexible timelines

4. Latin America (Brazil, Argentina, Colombia)

Average Hourly Rate: £25 – £45

Latin America can be an expensive region. However, it offers skilled developers and the benefit of time zone alignment for US-based companies. English skills differ, but many agencies work with international clients

This region is ideal for:

🔘US clients needing same-time-zone collaboration

🔘Custom software solutions with moderate budgets

🔘Agile development projects

5. Western Europe & UK/US

Average Hourly Rate: £70 – £150+

If you are planning to outsource to the US or the UK, you should know one thing: it will cost more. However, it offers many benefits like easy communication, no time zone problems, and excellent legal and data protection.

This region is ideal for:

🔘Key or enterprise-level systems

🔘Projects requiring close collaboration and control

🔘Clients who can spend more

Types of Outsourcing Services and Their Pricing

When outsourcing software development, the pricing will vary depending on the type of service you need. Here is a breakdown of the most common types of outsourcing services, along with their pricing.

1. Web Development

Web development stands out as the top service that companies outsource. This covers web apps, admin panels, dashboards, online stores, and custom website development.

🔘A simple website with 5-7 pages and basic functions can cost between £1,500 and £4,000.

🔘A custom web application with features like a booking system, CRM, and other features might cost you £10,000 – £40,000.

🔘A web system for big businesses with multi-user support and scalability can run from £50,000 to over £100,000.

The website development cost usually includes frontend & backend development, responsive design, CMS integration, database connection, and basic testing and deployment.

2. Mobile App Development

Mobile apps are often outsourced because they need to be developed for multiple platforms, such as iOS, Android, or both. The development becomes easier when you outsource. The cost can fluctuate based on the features, user experience, and backend development.

🔘A simple mobile app with basic functionality, no login, or backend has a price tag of £5,000 – £12,000.

🔘A moderate app with user accounts, APIs, and an admin dashboard can have a cost of £15,000 – £30,000.

🔘High-end apps with more advanced features, payments, and integrations can start at £35,000 and reach £ 100,000 or more.

The app making charges usually cover UI/UX design for mobile, frontend development, backend development (if needed), API setup, app store deployment, and testing on different devices.

Recommended Reads: How Do You Build a Mobile App

3. Custom Software Development

Custom software is developed for your business processes and needs. These systems are made from the ground up to manage your work, data, and security in a way that fits your needs.

🔘Internal Tools, such as employee management, automation, etc, can cost £8,000 – £15,000.

🔘Business Platforms with sales portals, logistics, and HR systems can drive up the cost to £25,000 – £70,000.

🔘Enterprise Software will cost you £80,000 – £150,000+

The custom software development cost involves:

🔘Planning

🔘Bespoke features

🔘API integrations with third-party systems

🔘Data analytics, user permissions

🔘Advanced security features

It is best for companies with unique needs that are not looking for a solution that is used by most businesses.

4. UI/UX Design Services

UI/UX design in software development is very important. A good UI/UX experience can help improve engagement and user satisfaction.

🔘UI/UX Design for Apps or Websites that have up to 10 screens/pages can have a price that ranges from £1,000 – £5,000.

🔘Complete design for platforms with complexity may require you to pay £5,000 – £15,000+

What’s Included: Wireframes & user journeys, high-fidelity design mockups, style guide creation, prototyping using Figma or Adobe XD, usability testing recommendations, etc.

5. QA and Testing Services

Testing is important to ensure your product is working as you expected, is bug-free, and offers a positive user experience. It can be charged hourly or monthly.

If you require hourly manual testing, the cost will be less than the one you would pay for an automated testing setup and continuous QA services.

The QA and testing services will charge for the following:

🔘Functional & performance testing

🔘Bug tracking

🔘Regression testing

🔘Security & usability testing

🔘Test case creation

6. Maintenance and Support Services

Your software needs ongoing updates, bug fixes, server monitoring, and technical support after it goes live. Outsourcing maintenance saves time and ensures your software remains updated, secure, and runs smoothly.

If you want support for enterprise-level software development, the cost will be higher than the cost you will require for basic maintenance.

The maintenance services cost often includes regular updates, server performance monitoring, minor feature updates, managing issues reported by users, and 24/7 support options.

7. DevOps and Cloud Infrastructure Services

With the help of the DevOps services, you can set up, maintain, and scale cloud environments for your application to run smoothly and securely.

🔘Initial Cloud Setup (AWS, Azure, GCP): £3,000 – £8,000

🔘DevOps Automation (CI/CD pipelines, containers): £5,000 – £15,000

🔘Ongoing Cloud Support: £1,000 – £4,000/month

What’s Included:

🔘Deployment pipelines

🔘Monitoring and logging systems

🔘Load balancing

🔘Auto-scaling and backups

🔘Security configurations

A Complete Overview

We have combined the cost of each type of service in one table for better understanding. You can also look to ensure you know what you are paying for because the cost of a basic website is entirely different from a simple mobile app development.

Factors That Influence Software Development Outsourcing Costs

The cost of outsourcing software development isn’t a fixed number. It can fluctuate based on many important factors. Here are the key factors that affect the final cost:

1. Project Complexity

A lot of your time, effort, and expertise will be needed if your software is complex. A simple mobile app or website may need a few developers, while an enterprise platform with all the features requires a big team, multiple skill sets, and more time.

The cost can increase substantially due to difficult login, custom features, integration of third-party tools, and security requirements.

2. Development Team Size and Experience

Another factor affecting the cost to outsource software development is the size of the development team and their experience. If you hire a junior-level developer, it will cost less, but it may also take more time or lead to quality issues.

However, developers who are experienced may charge you more, but they have the expertise to deliver better results faster. So, the more specialised your project, the higher the expertise will be needed, and therefore, the higher the cost.

3. Location of the Outsourcing Partner

The location of your development team will also have an impact on the total cost. As we have learned from above, developers in countries like India charge you less than those in the UK, the US, or Western Europe.

The timeline and costs of your project will also be affected due to time zone differences and communication styles.

4. Technology Stack

The technologies used to build your software can also change the cost. If you use frameworks and languages like React, PHP, or Python, it may be cheaper to work with, while specialised tech will cost you more because it requires advanced skills.

5. Design and User Experience Requirements

If you need a custom software design with unique animations or interactive elements, it will increase the work pressure for both designers and frontend developers.

A design that is clean and simple can be created quickly and within your limited budget, whereas an advanced UI/UX that also requires multiple revisions will cost more.

6. Timeline and Delivery Speed

If you are also at the end where you want your project to be completed quickly and on time, then you should expect to pay more.

That is because faster delivery requires more developers, overtime hours, or having to give priority to other projects. A timeline that is flexible allows for lower costs, better planning, and smoother development.

7. Scope Changes and Revisions

When new features are added when the project is going on, or if there are repeated changes in direction or feedback, it leads to extra work. This scope creep can stretch the timeline and increase overall cost. Clearly defined requirements from the start help reduce such surprises.

8. Communication and Project Management

Productivity is improved and errors are reduced when the team use good communication tools, provides regular updates, and offers project management.

Some outsourcing agencies include project managers in their package, which can increase cost a little bit but it saves time and money in the long run by preventing misunderstandings.

9. Post-Launch Support and Maintenance

As we know, no software is finished after launch. It will need bug fixes, updates, and scaling, and these will be the ongoing services, which are charged on a monthly basis. If you plan to outsource support as well, include it in your budget from the start.

Hidden Costs You Shouldn’t Ignore

We have learned the cost of outsource software development and the factors affecting it. However, you also need to know about the cost that you may end up paying for without your knowledge.

This is also a reason why many businesses, especially the new ones, get scammed by untrustworthy and unregistered agencies. These costs include delays in the project submission due to:

🔘Time zone differences

🔘Unclear project requirements that lead to rework

🔘Poor-quality code that needs fixing later

🔘Extra time spent on managing the project

You may also face issues when your software does not work well with your existing systems, adding security or legal compliance expenses, post-launch bug fixes, and any other software development challenges. Other hidden costs include:

🔘Training your team

🔘Paying for third-party tools or licences

🔘Extra charges if you switch vendors later

So, if you want to avoid surprises, it is essential to keep some extra budget aside and ask your outsourcing partner to be clear about all possible costs.

How to Estimate Your Outsourcing Budget?

If you are also looking for ways to avoid hidden costs and keep your project on track, it is best to estimate your outsourcing budget. Here is how you can do it.

1. Define Your Project Scope

You need to start by clearly determining your requirements and listing what your software needs to do. You need to know all the features you want to add now, and also those you may want to add later.

You also have to include user roles, platforms, and any third-party tools. This helps you easily estimate the time and cost and avoid scope creep.

2. Break the Project into Phases

Instead of budgeting for every stage at once, you should divide them into clear phases, such as:

🔘Planning

🔘UI/UX Design

🔘Development

🔘Testing

🔘Deployment

🔘Post-Launch Support

This will help you determine how much you need to spend on each stage and track your spending more easily. It means you will get a clear picture of where your money will go.

3. Choose the Right Outsourcing Region

The outsourcing region you choose will have different hourly rates. It will be based on the location. For example, developers in Western Europe may charge you more than those in India or Eastern Europe.

That is why you need to decide where to outsource, which will help you research the average rates for that particular region and calculate team costs.

Also Read: Nearshore vs. Offshore Software Development: Which Is Better for UK Companies?

4. Decide on Team Size and Experience

Next, you will need to know how many team members you will need, such as developers, designers, testers, and project managers. Also, decide on the level of experience they should have.

If you are going with experienced professionals, you may have to pay more, but your work will be completed quickly and you will get better results.

5. Get a Detailed Proposal

You should ask your shortlisted outsourcing partner to send a detailed proposal. It should include:

🔘Timelines

🔘Deliverables

🔘Hourly or fixed costs

🔘Tech stack

🔘Number of team members

🔘What is included or excluded

🔘Payment terms and milestones

This will help you avoid hidden costs later and save your money.

6. Include Ongoing Support and Maintenance

There are many who don’t budget for what happens after launch. However, you also need to include the cost of regular updates, bug fixes, and server maintenance that your software will require after deployment. This will support the monthly costs in your plan.

7. Add a Safety Buffer

Even the best-planned projects can face various issues like unexpected delays or last-minute changes. That is why you should add an extra 10-20% of your total budget as a cushion to handle delays, changes, or emergencies.

How to Reduce the Cost Without Compromising on Quality?

When you want to reduce the cost but also ensure the best quality, you need to plan smartly and make the right choices. Here are the best ways to keep outsourcing costs low while still getting the great quality of the software.

1. Start with Clear Requirements

As we learned, you need to have a clear understanding of your requirements. You should know what you want your software to do before you start searching for and approaching a development team.

This includes the following:

🔘Features

🔘User Roles

🔘Preferred platforms (web, mobile)

🔘Design expectations

It will help you avoid delays and extra changes that occur in software development projects.

2. Build an MVP First

You can start by building a Minimum Viable Product (MVP). MVP in software development will include the core features needed to test your business idea or product.

You can save money upfront by launching a small and simple app and gathering feedback from users. This way, you can focus on and invest in only the necessary improvements.

3. Choose Skilled Developers from Affordable Regions

You should look for developers in regions known for quality work at better prices instead of hiring the cheapest teams. You should go through their portfolios, ratings, and previous projects.

4. Communicate Clearly and Often

Good communication prevents mistakes. That is why you should stay connected with your team through tools like Slack, Zoom, etc. You should also:

🔘Share updates regularly

🔘Give quick feedback

🔘Make sure everyone is on the same page

5. Use Open-Source Tools Where Possible

Open-source tools and frameworks are free to use. You can choose platforms like React, Laravel, or PostgreSQL to reduce your total cost by avoiding expensive software licences. These tools are also well-supported and useful for most development needs.

6. Avoid Changing the Scope Frequently

You should try to avoid adding new features or changing the core idea frequently after your project begins.

The reason is that when you want to make a change or add something, it will need more time and testing, and may also require you to do the previous task again.

Scope creep is the reason why budgets grow unexpectedly. Finalise the core plan early and save changes for future updates.

Why Outsourcing to Arramton for Software Development Can Be Beneficial?

When it comes to software development, Arramton is considered one of the best software development companies in the UK. It is known for delivering the best projects.

Their team have the skills and knows how to manage different types of projects, whether you want a mobile app, a website, or a custom platform for your business.

They come to the top because many of their clients, whom you can also check by visiting them, appreciate them for listening to their needs, giving regular updates, and making sure the work is done the way they want. You don’t have to worry about hiring a full-time team or buying extra tools.

From the first step to after the launch, Arramton stays connected with you and helps at every stage. If you want good results within your budget, Arramton is a smart choice.

Concluding Thoughts

There’s no single price tag when it comes to outsourcing software development. The cost depends on what you are building, who you hire, and where they are based. However, to give you a general idea of the total cost, it ranges from £8,000 to £70,000+.

We have looked at the different types of services, cost comparisons by region, team experience, and the hidden charges that often go unnoticed. You now know how to plan your budget, what factors affect the cost, and how to keep expenses down without lowering the quality.

The best way to move forward? You should know your needs, choose the right team, and always keep a little extra budget aside for the unexpected.

If you are looking for a trusted partner who understands your needs and helps you build the right software without the stress, Arramton is here to help.

From planning to deployment and post-launch support, we keep it simple and just the way you need it. Contact Arramton today to build something great together.

Outsource Software Development FAQs

Q1 Is outsourcing software development cheaper than hiring in-house?

Ans Yes, outsourcing software development will be less expensive. The reason behind this is simple: you have to pay only for the work the development team has done when you outsource. Another reason is that you don't have to pay for office space, equipment, employee training, etc.

Q2 How do I ensure quality while outsourcing?

Ans You should first take time to choose your outsourcing partner if you want to ensure good quality. You can check out:

🔘The work they have completed

🔘What clients have written about them

🔘Their experience in the type of project you are looking for

Q3 What is the average hourly rate for a developer abroad?

Ans The hourly rate for a developer abroad can vary based on where the developer is located. For example:

🔘Developers in India or the Philippines can charge £10–£25/hour

🔘Developers in Eastern Europe may charge £25–£50/hour

🔘Developers in the UK or the US can have an hourly rate of £70/hour or more

Choose them based on the budget you have decided and the level of skill you need.

Q4 Can I outsource just a part of my software project?

Ans Yes, you can absolutely outsource a certain part of your software project. There are many companies out there that choose to outsource only specific parts. It can be for backend development, app design, testing, maintenance, or more. If you want, this also allows you to complete these tasks in-house.

Q5 How long does a typical outsourced project take?

Ans Project time depends on your business idea. If you have:

🔘A small mobile app may require 1 to 3 months 

🔘A web app that is more advanced than a simple one may take 4 to 6 months. 

🔘Platforms that are larger may need 6 months or a year or more to develop.

You can keep everything on track if you have a clear plan and ensure regular updates.