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Outsourcing companies: service benefits and tips to choose

IT outsourcing companies help businesses cope with an impressive amount of non-core and time-consuming work. This article will look at the essence of such services and to whom it is better to delegate technical processes.

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With the globalization of services, the role of IT outsourcing in achieving business success becomes more noticeable. According to Deloitte, information technology needs delegation of functions. About 60% of organizations admit that this is a chance for them to focus on priority areas. Indeed, IT outsourcing companies help businesses cope with an impressive amount of non-core and time-consuming work. This article will look at the essence of such services and to whom it is better to delegate technical processes:

Why Do Companies Outsource?

IT outsourcing companies: a global source of specialized talents

Modern businesses need help from third-party specialists for a simple reason: it is unprofitable to maintain a large staff of employees who could perform all functions. Delegating secondary tasks and processes is a smarter solution. After all, worries of performing work and finding the necessary resources fall on another company, an outsourcer. And this company knows what to do since it is a professional in its field.

Businesses can transfer secondary processes on outsourcing, for example, web application development, software support, etc. In other words, it implies attracting third-party resources to carry out work in a technological area. It is possible to negotiate the conditions under which these works are carried out. Terms, volumes, types of outsourcing services, prices, responsibilities — all the nuances can be entered into the contract, signed by both parties.

What are technological services outsourced more often than others?

  • According to statistics, more than 60% of organizations involve outside talent in at least some of their works related to application development. 
  • More than half of tech companies do this for supporting applications and software solutions.
  • At least 40% seek to eliminate the routine of working with data. 

Outsourcing in technology and IT consulting fields has been steadily developing for many years: figures provided by Statista show that sales of professional services in 2016-2020 did not fall below 31%. In 2020, it was almost 35%. It is more than in other industries, including business consulting, work management services, etc. It is not surprising because there are many reasons for companies to cooperate on such terms. 

software development outsource

Reasons for outsourcing, or why do companies outsource

One of the significant benefits of outsourcing for organizations is free to access to the necessary services and resources. Even if the IT business needs to involve a whole team of performers from different parts of the planet, the goal will be achieved. The secret is that many technological outsourcers are interested in cooperation with people worldwide because it is a chance to become more famous. Many, but not all. It depends on the type of company, and it should be considered when choosing a contractor.

why do companies outsource

Types of outsourcing companies and their benefits

Onshore

“Internal” players are focused on customers nearby. It is advisable for both parties since all participants speak the same language, have a common culture, and periodically meet at the negotiating table. It is easier for the client to understand and accept the terms of cooperation and establish control over the work. 

Offshore

Such companies are “universal” since they are not limited to specific countries/cities but offer outsourcing services on a global scale. They build customer relationships online. Opportunities for the client include reduced costs due to different salaries and tax rates and access to a global talent pool for large projects.

Nearshore

It is an intermediate option that combines the characteristics of the previous two. The outsourcer seeks to work with neighboring countries (or closest regions). It is the golden mean for a business that cannot transfer the project to performers from distant countries for some reason. Especially if doing it in the same country (region) is complicated due to the lack of specialized specialists.

All types of outsourcing services have different advantages for IT, but the second one is chosen more often. Almost 65% of offshored tech functions are software development services. According to Gartner statistics, Ukraine is on the list of 20 major offshoring destinations in EMEA. Moreover, Ukraine has the best ratio of price and professionalism in all of Eastern Europe. Next, we will consider benefits that do not depend on the type of outsourcing.

Let’s consider some benefits that do not depend on the outsourcing type.

Critical arguments in favor of delegating tasks:

  • Reducing the cost of hiring new employees in the state, their maintenance, and organization of jobs.
  • Receiving the knowledge and skills required for the project right now.
  • Flexible resource management with the ability to re-staff the team if necessary.
  • Quick achieving of key goals by eliminating routine and getting rid of secondary tasks.

For 45% of businesses, the priority is to save money on the project, and for 46%, it is the opportunity to find the best skills that their companies lack. But the main argument is the fact that you can forget about the routine and focus on key business technologies and processes. It fully applies to outsourced software development services as well as managing mobile and web app projects.

Due to the high competition for outsourcing, it may be challenging to accurately choose a good company in the market.

Outsourcing advantages

3 tips on how to find your option among hundreds of Outsourcing companies

  1. Relate your needs with the contractor’s capabilities: Look for a company with appropriate industry skills, the best location, and affordable rates.
  2. Survey favorites among outsourcing software development: explore all services, view portfolios, and talk with customers.
  3. Focus on tech arsenal: say yes to advanced business technologies, methods and tools, reliable digital approaches, and secure systems. 

So, each outsourcing company can be called a professional assistant in achieving business goals and overcoming obstacles. This practice applies to various industries, including finance, trade, transport, pharmaceuticals, etc. However, outsourced IT services have become paramount and now are a trusted source of talent in software development without geographic and linguistic barriers. 

3 tips on how to choose