In today’s global and fast-paced economy, outsourcing provides enriching opportunities for companies that save both time and money. However, in order to make the most of these third parties, it is important to understand their advantages as well as their disadvantages.

Pros

Outsourcing parts of development are beneficial to companies in gaining access to specialized skills such as usability experts, systems architects, and graphic designers. When it comes to software development skills, there are various talent pools spread out globally with technical skills related to geographic specialization.

Third parties from certain areas help cut back labor costs, with no reduction in technical skills, which is helpful for lengthy projects. Moreover, having experts from outsourced teams lends a fresh perspective and helps avoid technical pitfalls that otherwise cost both time and money.

Third parties can:

1. Recruit, since they have in-house staff recruiters ready

2. Deploy development infrastructure by supporting the current process with:

1. Managing Projects

2. Building Systems

3. Testing Systems

4. Tracking Bugs

3. Provide Engineering Management, since the management personnel and senior technology personnel are already in place

Cons

The greatest setback with outsourcing is when the third party company fails. To prepare for this setback before hand, it is important to put in place preventative measures that give access to the company's developed product and personnel, should it fail.

More common problems include:

1. "Double-dipping", where third parties assign "full time" resources to multiple customers

2. Intellectual property theft

3. Communication barriers across different cultures

4. Delays and poor implementation due to inefficient management

The best way to avoid the pitfalls tied to outsourcing is to make the outsourced team integrated into the company, so that its successes and failures become tied to the overall team effort.