Structure
Benefits Of Outsourcing Software Development
Examples Of Task Outsourcing In IT
Advantages And Risks
Advantages Of Outsourcing
Disadvantages Of Outsourcing
Why Choose Our Company?
A lot of large companies outsource some of their business processes to focus on achieving business goals. Every year, the number of those who are looking for a reliable outsourcing company is increasing. Google Trends proves this.
Because of the service popularity, there are a lot of benefits of outsourcing software development.
Companies such as Deloitte explore demand and collect statistics. This demand nearly doubled from 2016 to 2018. It grew from 20% to 49%.
Just think about it, IT outsourcing revenue in 2022 is expected to be $395 billion. And in 2027, this figure will exceed $550 billion.
Software development is a complicated process that is hard to undertake. Moreover, to hire qualified specialists, you need to have a certain qualification. Therefore, it makes sense to give this job to a third-party company.
Outsourcing, especially in IT, has several advantages, but it also has disadvantages that you should be aware of.
Examples of task outsourcing in IT
IT outsourcing is very common. Here are a few examples of areas where IT outsourcing takes place a lot.
Infrastructure outsourcing
This form of outsourcing occurs when the operation and maintenance of an IT infrastructure or parts of it, as well as support services, are provided by an outside service.
Infrastructure outsourcing usually involves:
Data center (host/center server) -> Data center outsourcing;
Infrastructure outsourcing to the cloud -> cloud computing;
Networks (Local Area Network, Global Network) -> Network Outsourcing;
Workstation systems (desktop services) -> Desktop outsourcing;
Other infrastructure services such as security, phone systems, printing systems, and more.
Staff Augmentation
Staff augmentation is a special form of outsourcing. Here, internal employees are assigned to a project or task and additional specialists are called in. The hunt begins for these additional specialists.
Thus, the team has been expanded (augmentation). Large corporations often use this form of outsourcing, but smaller companies use it less because it can be rather expensive to search for proficient employees frequesntly for short-term projects.
Managed Services
There are countless IT outsourcing providers out there. Some companies need nearshore outcrossing. That’s when the employees need to be located in Europe. Other companies need offshore outsourcing for talents outside of Europe. Which version to choose depends entirely on what decision criteria play a role for the company.
Application Outsourcing
When choosing this form of cooperation, it should be understood that responsibility is outsourced to a service provider under the “Service Level Agreement (SLA)”. These may include the following services:
Monitoring and troubleshooting;
Incident management;
Further development and optimization of the application;
Release and change management;
IT support/help desk;
Software Development Outsourcing.
Under this very common form of IT outsourcing, which is especially popular among small and medium-sized businesses, a company outsources to an outside service provider or freelancer to develop software or an application for itself.
Everything you will learn next will relate to this topic - software development outsourcing, its advantages and disadvantages.
Advantages and Risks
Outsourcing software development has both advantages and risks. Only when risks are handled correctly can companies take full advantage of the opportunities offered.
Advantages
Time and cost savings, fast project start.
Access to the latest technologies, and special know-how.
Flexible access to additional resources.
Optimized management processes.
Easy vertical and horizontal scaling.
Risks
Less control over the project.
Potential communication gaps.
Security breaches.
Loss of knowledge.
Dependence on a service provider.
Advantages of Outsourcing
Price reduction
Decreased costs is one reason why it's easier to outsource IT services than to do it yourself by hiring additional staff. When an outside company takes over the IT department or services, costs are reduced in two main ways.
Reduced labor costs. The IT agency employs qualified IT management professionals, so the company saves on personnel costs (salaries, benefits, and other related expenses).
Reduced infrastructure costs. Many of the costs associated with investment and maintenance of IT infrastructure are reduced by working with an outside company.
However, this is not the decisive reason when making the final decision to outsource IT staff. Afterall, there is a change of looking significantly in quality due to choosing a cheaper option.
Technological Know-how
The IT service provider has access to the latest technology through numerous multidirectional specialists in its base. A company benefits from this as the internal team may be limited to the amount of innovation that they have access to. With IT outsourcing, the risks to IT management are reduced because tasks are accepted and managed by the service provider.
Business Processes
Outsourcing software allows a company to focus on the business and its strategies to add value and keep it at a very competitive level. Outsourcing allows a company to be more agile and flexible and to set new business goals. This means that companies can devote more time to activities and services that are part of the core structure.
Flexibility
One of the great benefits of outsourcing is flexibility and adaptability. Changes in the marketplace are occurring at breakneck speed, and companies are better prepared to outsource certain services or processes.
Disadvantages of Outsourcing
Just as IT outsourcing has advantages and benefits, let’s talk about some of the disadvantages of outsourcing.
Confidential Information
First, there is a greater vulnerability to the loss of confidential information from companies compared to in-house employment. External agencies have access to confidential data. It's important to remember that when assigning or accessing personal data, data protection law must also be considered.
Therefore, it is necessary to choose the right service provider and add confidentiality agreements to service contracts to ensure data security. This can in avoiding theft, disclosure, and other risky situations involving company information. However, it is not a guarantee and the chances of this happening with outsourced staff is higher.
Communication
Nowadays, communication between all parts of the company is very important. With an outsourced team, this communication can be less flexible, which can lead to some misunderstandings. That's why it's so important to hire a quality team.
The problem of communication with foreign companies should not be overlooked, either. To avoid misunderstandings at the cultural level, look for an experienced agency with professional staff that can provide outsourced consulting and other high-level services.
Hidden Costs
Often, some costs are not fully discussed from the start, causing additional costs for clients along the way. If the IT outsourcing company is located in another country, there may be additional charges for support calls, for example.
Why Choose our Company?
DevBrother is an experienced agency with two development offices in Ukraine and Poland, specializing in custom web development.n. Our clients are from countries where quality comes first: the USA, Canada,Germany,China and other 1st world countries. We creating online stores, web services, B2B portals, and marketplaces.
Mostly we use the following technologies: JavaScript, React.js, Node.js, technology stack. In addition, we can integrate our DevOps into your processes. We also offer the highest quality consultations and further support for your project.
Our professional team will take care of the quality implementation of your projects with the highest requirements for performance, design, usability, and business goals.
Companies can focus on their core goals by teaming up with a supplier. It's easy to get distracted by spreading your energy among different activities that apply to the company's operations but are not related to core business goals. Outsourcing is the answer to this problem and helps business leaders focus on their areas of expertise.
DevBrother helps clients focus on the business needs of their projects and takes care of all IT product development and support processes. We also work effectively with the team expansion model and integrate easily with the client team.