Software outsourcing is still alive and even more relevant today than ever before. Competition has increased and customers demand better goods and services to be supplied faster and cheaper, a primary factor contributing to the same. Strategically then, it makes sense to do what you do best and take the services of those who can do the other functions better than you. This is especially the case with software development.
Another key causation is that outsourcing gives you more options and allows you to compare between service providers to identify the one that is best suited to partner with you. Having a wide range of options allows your organization to have the upper hand while negotiating for your specific requirements.
The third one would be development is a time consuming and complex process which can eat into your time and bottom-line, if not properly managed. There are companies that have become highly efficient in the process and can achieve results at a fraction of the costs you may require. Partnering with them can ensure that you remain profitable.
The fourth reason is that expertise is hard to find and increasingly unaffordable in many parts of the developed world. This is why top companies seek out partners in countries like India or Philippines where obtaining and managing human resources is affordable. This is evident from the statistics within the last decade. 57% of companies increased the use of outsourcing. 46% of companies have cited their top reason for outsourcing to be the need to reduce operating costs with 12% desiring to access world class capabilities. It is also estimated that 300,000 positions are outsourced annually.
Now, the final causation is the achievability of overall objectives. Software development once outsourced, frees up organizational resources which then can be focused on ensuring effectiveness in the other areas of goal fulfilment.