Why should you consider outsourcing IT services?

Have you ever thought of outsourcing IT services to an external software development company? Such a strategy offers many significant benefits, including money and time savings. In this article, we want to dig deeper and show you all the crucial benefits of working with a software development company. Let’s get right to it!

Nowadays, people and companies worldwide can quickly work together on digital projects, regardless of their physical location. This potential allows companies to take advantage of a much more comprehensive range of benefits and services compared to the limited — and often costly — resources available in their own country.

According to Statista, the revenue in the Segment IT Outsourcing is projected to reach US$395.00bn in 2022. In 2027, it can be even more than US$587bn.

Source: https://www.statista.com/outlook/tmo/it-services/it-outsourcing/worldwide#revenue

There must be something there, as even large organizations like Facebook, IBM, and Google are delegating some of their IT and software-related activities to external teams.

Outsourcing software development gives companies a competitive advantage by minimizing costs, improving customer service, and maintaining high product quality. So, let’s see the pros and cons of outsourcing software development. We will also give you tips on outsourcing software development effectively.

Outsourcing IT and software development services — why is it worth your attention?

Today, even small or medium-sized organizations can benefit from outsourcing IT-related services. Thousands of experienced teams, agencies, and even freelancers can help you with everything from graphic design to developing a fully-functional app.

These teams are usually experienced and knowledgeable, as they often have an impressive record comprising tens if not hundreds of successful digital projects. But let’s be more specific, and see why you should consider this business model.

Access to more talent and the latest technology

One of the main reasons why companies outsource software development is seamless access to a global talent pool. In the outsourcing world, this pool is worldwide, so you can look for software development companies wherever you see fit.

It’s the same story with the technology — do you require a tech stack that’s not popular in your country? That’s no problem at all; look elsewhere!

Focus on core business

Nowadays, companies have to find ways to innovate their offer and grow to remain competitive. Outsourcing software development enables focusing on building core business processes. It also doesn’t overwhelm internal employees with work that doesn’t match their skill sets, allowing them to focus more on strategic goals in line with the business. In other words — you do what you’re the best at while IT experts deal with software and web development on your behalf.

Savings

According to our experience, based on hundreds of conversations and long-term relations with our clients, we estimate that companies can save around 30% of their operating costs by outsourcing software development.

When running a thriving business, the merry-go-round (especially expenses) keeps spinning. When you use outsourcing, you save a significant amount of money on employee salaries, taxes, and benefits.

What’s more, you’ve surely noticed a vast difference in rates and salaries between providers and employees in different parts of the world. If you decide to work with a company from, let’s say, Eastern Europe, your software development will be much more affordable compared to keeping an entire in-house IT team or working with a company from the United States.

Delegating instead of recruiting

With the growing demand for skilled workers, recruitment is becoming increasingly difficult (mind you, 64% of IT executives cite talent shortages as the most significant barrier to adopting emerging technology). IT outsourced services almost eliminate this problem while ensuring access to the best professionals.

Scaling up your IT team

Your company’s IT needs can change over time regarding IT infrastructure and human resources. Thanks to outsourcing, you may quickly downsize or upsize your team to fit the current workload. In addition, if your company often needs to increase or decrease the number of employees, it can be a reason for uncertainty and inconsistency in internal teams. Outsourcing ensures the continuity of the company’s operations while keeping its human resources at the right level.

Quality and competitiveness

When you outsource IT services, you establish cooperation with professionals whose main occupation is software development. That assures you that you get a quality product easily and quickly. As a result, it’s easier to outrun your competition.

Growth opportunity for start-ups and small businesses

Outsourcing allows small companies and start-ups to access the best talent and tools at affordable prices. If you are running a start-up, you surely don’t want to spend money on services and areas you don’t need. Outsourcing enables just that. Here, you pay for the outcome, and that’s the most cost-effective solution.

Why is IT outsourcing so popular?

The main reason for the growing popularity of outsourcing software development services is the financial viability of this solution. By outsourcing, you can eliminate or reduce expenses such as job maintenance, rent, insurance, taxes, and employee training.

And what about the costs? The cooperation with an external company can be settled based on a lump sum or per-hour rate. When deciding to outsource software development, you can expect the following rates:

• Asia and Africa: $30–45/hour
• Central and South America: $35–60/hour
• North America: $95–170/hour
• Central Europe: $40–90/hour

(Data based on analysis of numerous online sources)

Currently, most organizations are choosing to delegate IT services to countries such as China and India. Still, there is growing interest in outsourced IT services to Eastern European countries like Poland, mostly due to favorable rates, reliable work, and highly qualified staff.

Does outsourcing have any disadvantages?

There is no doubt that outsourcing software development services provides many advantages. However, this does not mean that this solution is free of any risks. **The disadvantages of software outsourcing are the same as in any other form of outsourcing, namely loss of autonomy and possible technical dependence on another company**. These can be serious challenges, so if you decide to outsource software or web development, you must be sure to work with a trusted partner.

Who to entrust with outsourcing software development services

Delegating all or part of your development to an external service provider takes some effort. Finding a company that ticks all of your boxes is worth establishing selection criteria. Here are some basic standards for choosing a reliable IT partner:

• Experience and credentials in your industry
• Used technologies
• Types of offered services
• Pricing models and the overall cost of software outsourcing
• Time invested in the scoping phase of the project

When choosing the location of a third-party IT provider, there are better ideas than going by regional rates alone. Countries that supply the most significant number of developers to the global market only sometimes offer high-quality services. According to a HackerRank report, the top five programmers in 2022 include countries such as:

1. China
2. Russia
3. Poland
4. Switzerland
5. Hungary

Source: https://www.hackerrank.com/blog/which-country-would-win-in-the-programming-olympics/

When you consider the global rates and the quality of the products supplied, it is not surprising that more and more companies are choosing to cooperate with companies from Central Europe. That is also definitely influenced by the European Union legislation, which is unified and business-friendly in many aspects.

Outsource away!

Outsourcing is not something you should be afraid of. Outsourcing software development services can reduce operating costs, save time for other tasks, and improve customer service.

As many as 78% of respondents in a Deloitte survey say they have a favorable view of their outsourcing relationships with other companies.

If you are currently looking for a reliable software partner, you don’t need to look any further; contact our team.

With trained, qualified, carefully selected, multilingual experts, we help the companies that choose to work with us to gain a competitive advantage and, above all, satisfy their customers. To learn more about our services, write to us, and we will do our best to ensure you entrust your IT services to true professionals in their field!