Outsourcing is a practical way to get a fully functioning app that can solve any business challenges you may have, as well as increasing your profitability. It works with any business regardless of its size and industry. You can take advantage of IT outsourcing services to build an app for your restaurant or hospital for example, or to automate any of your business processes.

If you only have an app idea, IT outsourcing companies can come in handy. Hiring in-house app developers is a costly and challenging task, including recruitment, onboarding, equipment, tools, etc. Moreover, newcomers need more time to get along with team members, etc. And when outsourcing, you just need to gather all your requirements and your vendor will cover the full cycle of software development. To put it briefly, this is what is meant by outsourcing.

Outsourcing allows for managing multiple tasks simultaneously. You can outsource narrowly-specialized and tedious tasks and free up more time, as well as maximizing your financial resources.There are lots of things you can outsource. And software development is one of the most popular outsourcing services. So today, we’re going to discuss how to outsource IT services and how they can help improve your business.

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Top IT Services You Can Outsource In 2022

The McKinsey report states that the Covid-19 pandemic has increased the adoption of digital technologies by several years. A vast majority of all these changes will stay put even when the Covid-19 pandemic is over. During the global pandemic, consumers have dramatically moved to online services, and companies and industries have responded in turn to stay competitive under the new market conditions.

Being behind the scenes, we know what IT services are in the greatest demand in 2022. Here are the top four of the most popular outsourcing services:

01

App Development

People use apps to watch films, do shopping, study, and work. Mobile apps can be an indispensable tool for brick-and-mortar and online businesses. For more information on mobile app development, check out our article on the Best Practices of Mobile App Development.
02

DevOps Services

DevOps engineers have many responsibilities, from managing infrastructure to tracking app performance after launch. DevOps are here to increase the efficiency of all app development procedures and also to cut down the costs on infrastructure.
03

Network administration

Network administrators help the network run smoothly. As a rule, network administrators need to be available 24/7 in order to fix any problems with the network since it may cost an arm and a leg for their business.
04

Cloud engineers

With the rising popularity of cloud-based app solutions, there is a rising demand for such experts. They have a deep knowledge of cloud services and managing cloud app solutions.

The pandemic has made digitalization one of the main software development outsourcing trends and outlining the vision for the future of outsourcing. Transforming from a brick-and-mortar business into an online one needs well-qualified specialists, and that’s when IT outsourcing services companies come in handy.

Interested in outsourcing app development? Contact us to transform your idea into a powerful digital solution.

Pros And Cons Of IT Outsourcing

Before going in for software development, it’s vital to understand both the benefits and the drawbacks of IT outsourcing.

 

Advantages of outsourcing IT services

it outsourcing advantages

 

More time and resources for core business needs

If your company does not operate in the development services market, building an IT department from scratch can burden or even delay the development of your software product. We’re not talking about just financial resources, but also about your work and time.

Outsourcing IT services will allow you to maintain greater control over the key areas of your business and better manage the strategic aspects of your business development, instead of you trying to kill two birds with one stone.

 

Facilitate management

By dividing the time between running your business and assembling a new development team, you will risk a situation in which neither part of your business will be managed correctly. Recruiting and then organizing the work of a team made up of a few people is associated with considerable effort on the management’s part. Also, employing additional employees is a long-term recruitment process requiring some additional investments as well.

Outsourcing to an external company is simpler in terms of management. While the entire project implementation process is still the responsibility of the contractor, and on the client’s side, the project is coordinated by one (or several) specially designated employees (aka Product Owners).

Greater flexibility than in-house

Outsourcing IT services to external companies increases the flexibility of your business. For example, you can take advantage of seasonal outsourcing, i.e. hire external companies and subcontractors only when you need to introduce updates in your app or to add a new feature for example.

 

Thorough business expertise

Software development outsourcing companies can help you work out the software solution to meet your business needs. IT companies with outsourcing services have more experience gathered from previous projects that can help to improve the functionalities of your mobile or web app solution.

 

Disadvantages of IT Outsourcing

IT outsourcing has far more benefits than we can describe in our article. But it also has considerable disadvantages of IT outsourcing services you need to consider.

it outsourcing disadvantages

 

Lack of industry expertise

Domain expertise is one of the biggest advantages of in-house teams. In-house developers are likely to have more hands-on experience with your business needs and peculiarities.

While looking for your IT outsourcing company-to-be , you need to choose a provider with vast experience in your industry.

 

Work time sync

In any type or model of IT outsourcing, your team needs to find out how to work in different time zones and work rhythm. A lack of overlapping working hours and work synchronization can burden the cooperation.

There is a solution. You need to choose a technology outsourcing provider with overlapping working hours and negotiate the time and frequency of communication. For example, Eastern Europe is situated in a convenient time zone with common working hours with US companies.

 

Loss of control

While working with freelancers or IT providers, it may seem that you have less control over the team and product development. But you can take an active part in the working process, visit meetings, and keep track of the progress made, thanks to modern technologies.

 

Having analyzed all the IT outsourcing pros and cons, it’s worth mentioning that the pros of IT software outsourcing services can significantly outweigh its cons.

With DOIT, you can turn all your app ideas into successful software projects. Contact us to find out how to benefit your business with IT outsourcing.

Types of IT Outsourcing

it outsourcing types

 

Before going ahead with outsourcing, it’s better to understand the different types of outsourcing. The most logical classification of IT outsourcing providers is based on location. Let’s dig deeper and find out what type best suits your business needs:

01

Onshoring

Under the onshore outsourcing definition , we mean hiring IT specialists who are located in your country. For example, let’s say that you run a NY-based company, and you can employ an extra workforce in any of the nearby US states.
02

Nearshoring

While outsourcing programming services, you can opt for nearshoring. It’s outsourcing technology services in nearby countries within the same time zone. Nearshoring has no rivals when it comes to communication, but it’s not the best option when it comes to cost-efficiency. For example, you can choose an It outsourcing vendor in Poland if your company is situated in Germany.
03

Offshoring

When it comes to offshore outsourcing services, it implies partnering with service or technology outsourcing companies located in other parts of the world. Offshore outsourcing services allow for saving the most monetarily since you can outsource to IT hubs in Eastern Europe, India, etc.
04

Multisourcing

It’s a particular way of outsourcing to multiple IT outsourcing services companies that are spread over two or more countries. For example, you can work with IT outsourcing companies in the USA as well as with IT outsourcing companies in Eastern Europe at the same time.

Which One Is Better?

Every type of IT outsourcing has its own benefits as well as drawbacks. You can choose the most suitable type, depending on your needs. For example, if you need to provide uninterrupted tech or customer support, then offshoring time differences can come in handy. That means that you’ll provide customer support within your working hours, and your outsourcing provider will cover your off-hours.

Onshoring Nearshoring Offshoring Multisourcing
Cost efficiency
Cultural differences
Time differences
Ease of access
Broad talent pool
Wide range of specializations

Best Destinations for IT Outsourcing

There are tons of IT outsourcing companies all over the world. The global economy and modern technologies allow for hiring skilled specialists and getting the best information technology outsourcing services worldwide. There are three regions worth considering before outsourcing in 2022:

#1

Eastern Europe

#2

Asia

#3

Latin America

The following regions can boast a vast pool of highly skilled developers and a wide range of specializations. The high demand for tech outsourcing has created a highly competitive market. Let’s determine the best country for outsourcing software development services for your company.

it outsourcing rates

 

Eastern Europe

In recent years, software project outsourcing has boomed across many Eastern European countries. Thanks to a convenient location, cultural closeness, and a large talent pool of IT engineers, Eastern Europe has recently become a top destination for outsourcing software development services with a large number of technology outsourcing companies and hubs.

Advantages of IT outsourcing to Eastern Europe:

  • Overlapping working hours (with Western Europe as well as the USA)
  • A large pool of highly skilled software engineers
  • Hourly rates starting from $30-$65
  • A Good command of English

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Asia

When it comes to IT outsourcing in Asia, India is the first country that crosses our minds, but it’s not the only spot for outsourcing software development. Indonesia, China, and Malaysia also are among the best countries for outsourcing software development in the Asia-Pacific region.

Advantages and disadvantages of IT outsourcing to Asia:

  • Low cost
  • Hourly rates: $30-$45
  • Lack of communication
  • Time and cultural differences
  • Poor quality standards

 

Latin America

Latin America is gaining a reputation as a powerful IT outsourcing hub. This outsourcing region provides access to a new talent pool of IT engineers. For US-based businesses, proximity and language familiarity make Latin America a convenient outsourcing destination. But it’s not the cheapest destination, as compared to Eastern Europe and Asia.

Advantages of IT outsourcing to Latin America:

  • Language and culture familiarity
  • Minor or no time differences with the US
  • A thriving pool of IT specialists
  • Hourly rates: $45-$70

IT Outsourcing Models

There is one more thing to consider before signing the contract with your IT outsourcing company. It’s the cooperation model that will be the best for you. While the types of IT outsourcing are geographically-bound, Outsourcing business models are based on the type of services provided. Generally, we can highlight four main IT outsourcing models:

 

Staff augmentation

Staff augmentation or outstaffing is a particular type of remote IT outsourcing service in whih you temporarily extend your development team with extra IT specialists that are officially employed by another company. It’s mostly used by tech companies with in-house development teams.

Instead of recruiting extra developers, you can contact an IT outsourcing provider and add new specialists to your team whenever you need them. These specialists become a part of your in-house team.

It’s better to opt for the staff augmentation outsourcing model when you need to:

  • Power up your existing team
  • Speed up your development process
  • Fill in certain skill gaps

Dedicated team

A dedicated team can come in handy when you have extra tasks or a completely new project that your in-house team cannot perform due to the lack of expertise or time or when you have no development team at all. It means that you hire an entire software development team.

it outsourcing dedicated development team

It’s a happy medium between staff augmentation and project-based outsourcing. The development team is assigned to your project under the augmentation model. But they don’t become an integral part of your in-house team like your regular employees are. You don’t need to bother about any administrative issues, such as HR, tax, and social benefits. It’s the ideal solution if you don’t have the time or the resources to hire developers locally.

It’s better to opt for the dedicated team outsourcing model when:

  • Your core team is overloaded
  • You need extra hands on deck for a separate project
  • You have no time for hiring in-house specialists

Project-based outsourcing

The project-based outsourcing business model takes all of the development hassles off of your shoulders. It’s the IT outsourcing vendor who is in charge of the development team, the overall process, and the end result. But you’re not isolated when you choose this option.

A vendor’s PM will regularly update you on the progress, show demos, and so on. It’s up to you to decide when and how to meet the team. The frequency of meetings depends on the project type, its complexity, and its technical requirements. Moreover, you’re involved as a product owner and the team cannot make any decisions without your prior approval.

This model can be used for any business domain, including healthcare, retail or manufacturing. The project-based model is probably one of the favorite IT outsourcing models for small businesses and/or startups.

It’s better to opt for the project-based outsourcing model when:

  • You don’t have the resources for an in-house development team
  • Your talent pool is limited
  • It’s a startup

 

Offshore development center (ODC)

An ODC is an office with IT specialists abroad, founded to expand the development services and cut operational costs for it’s clients. As a rule, ODCs are placed in countries with a massive pool of IT experts, a favorable business environment, lower cost of living, and a good price-to-quality ratio.

Setting up an offshore development center is a great option for complex and large projects that require a lot of specialists.

It’s better to opt for setting up an offshore development center when you need to:

  • Hire 35+ IT specialists for your project
  • Reduce security risks
  • Control the whole development process

Summing up

IT outsourcing ultimately offers business owners great advantages. It allows for building up a team of skilled developers without adding the expense of in-house employees. Technology outsourcing is an affordable, proven strategy to grow your business.

When you opt for IT outsourcing services, you can focus your time, attention, and resources on your core activities. At DOIT, we can turn app ideas into powerful software products for small to middle-sized companies and startups.

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Frequently Asked Questions

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What is IT outsourcing and how does it work?

It is a particular business practice when a company uses the expertise and labor force of a third-party company to get all the services that are needed.

Who uses IT outsourcing?

There are no specific requirements for taking advantage of software outsourcing services. The IT outsourcing industry serves the needs of tech giants as well as small businesses, worldwide.

Which IT services should be outsourced?

It depends on your business needs. You can outsource everything regarding app development, network administration, DevOps services, etc.

Why do companies outsource IT services?

There are a number of reasons why companies opt for application outsourcing services. Cost efficiency and access to a wider talent pool are among the top reasons to start IT outsourcing.

Why choose Eastern Europe as an outsourcing destination?

Eastern Europe is a great place for IT outsourcing for many reasons. Eastern European software developers are among the top software engineers according to the HackerRank report. So they can build robust IT outsourcing solutions for a wide range of business industries. Thanks to the convenient time zone and location, Eastern Europe is an excellent fit for US and European companies.

Alex CSO
Alexander Pastukh,
CSO @ DOIT Software
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