Top benefits of IT Outsourcing, mistakes to avoid and how to go about it?

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Now that technology has seeped into all facets of our lives, almost all the businesses have adopted outsourcing to satiate the technological demands of their customers. In fact, it has become a common practice to opt for outsourcing IT services as it comes with umpteen opportunities and benefits. In this article we will talk about how IT outsourcing proves to be highly beneficial to the companies, which services are typically outsourced and when you should outsource. 

What is IT outsourcing?

IT outsourcing refers to the process of hiring a third-party to handle the technical operations of a business. The external service provider either offers complete responsibility of the project (fully managed service) or supports the internal technical team of the client by offering an extended team to support specific tasks (co-sourced IT support).  

Which IT services are typically outsourced?

An outsourcing company has multiple services to offer and all of these services can be easily outsourced if the business is in dearth of technical support or has budget limitations. Outsourcing empowers organizations to improve their operations and efficiency. 

  • Application development
  • Website development 
  • Database management 
  • Application support
  • Technical support
  • Data Center management
  • Data storage and email 
  • Networking & communication
  • Disaster recovery management
  • Threat protection & security measures

Benefits of outsourcing 

Outsourcing brings a lot many benefits to an organization be it big enterprises or small businesses. Besides saving heavy on cost, here are some of the major perks outsourcing brings along.

  1. Global expertise and wider perspective 

IT professionals need to be well trained on the latest technologies, cloud computing capabilities, data management and encryption services. These disciplines need highly trained professionals for businesses to work effectively. However, it is difficult for start up companies or businesses with limited budget to do so. Outsourcing can help companies to get those experts without the payroll expenses and other operational costs. 

  1. Access to latest technology in the IT industry 

Opting for outsourcing technical requirements to the third party will provide more exposure to the latest tools and technologies. Even if you have a small budget business, it will avail the benefits of firewalls, switches, routers, high-speed computers, etc which usually prove to be costly when it comes to purchasing them for in-house use. 

  1. Lower operational cost

Outsourcing to developing countries lets you save a good amount of money since the hourly charges of the developers are lower compared to ones in developed countries. Usually the hourly wages of developing countries start from $12-$15 which is way cheaper compared to that of developed nations. 

  1. Better work quality & productivity

When you outsource a service from your business, the delegated services are handled by experts on the other shore. At the same time, the in-house team dedicatedly worked on other functions of the business to enhance its productivity and deliver quality. 

  1. Flexibility of business

Outsourcing helps manage workload quite effectively. Since the businesses can have erratic demands, it can be difficult to meet them without incurring any cost. However, you can easily cope up with these demands via offshore service providers as the operational cost of offshore developers is lower than the in-house developers. 

  1. Reduces training requirements

Hiring and training a new employee is time consuming and risky. It may take months to fully integrate that developer/employee into your system whereas while outsourcing your requirements this step chucks off. 

Reasons for outsourcing revealed through a survey conducted by Deloitte:

  • 15% told outsourcing gave accessibility to the latest tools and operations.
  • 70% outrightly claim that outsourcing helps manage cost
  • 20% revealed it improved speed to market 
  • 40% enabled business flexibility 
  • 15% said outsourcing brought them agility

What mistakes to avoid while outsourcing?

Outsourcing services is easy but there are significant blunders which can be made when delegating services to the third party. 

Lack of research 

Before finalizing a service provider it is utmost important to do the background check. The offshore service provider must have a good industry experience and must have handled a significant number of offshore projects.  

Unclear requirements & miscommunication 

It is imperative to know your requirements crystal clear to avoid any miscommunication or misunderstanding in conveying your needs.  

Obsolete companies that are not in sync with modern technology

You must be aware of the companies that aren’t updated with the latest technologies and shouldn’t get into the trap of collaborating with them. 

Underestimating Quality Assurance/Testing

Quality assurance is an essential part of outsourcing and must never be overlooked.  It is imperative to give enough attention to the testing process and not to hurry when it comes to bringing the product to market.

Top outsourcing countries to consider 

If you have a project in hand and are searching for the right location to get the outsourcing done, here is a list of the top countries who are currently providing best outsourcing operations. 

CountryWages start fromWages max limit
India $11000N/A
Ukraine $12000$47000
China $27000$52000
The Philippines$10,500N/A

Tips to hire the best outsourcing companies

  1. Clearly define your requirements 

Before defining any project requirements you must thoroughly understand the needs of your project. You must have clearly defined expectations from the outsourcing company and can briefly outline the technical needs, features and functionalities of the product. Try creating a document with prerequisites to ensure a smooth development process.Ensure you include Synopsis of the project, Features, Navigation and Non-functional requirements. 

  1. Find the list of suitable companies 

Here are three ways you can easily find the list of suitable companies:

Referrals from your connections: Try fetching some information from your colleagues or friends regarding the outsourcing companies. It may happen that they might be knowing a good company with the right credentials for outsourcing projects to a different location. 

Search directory listings : Another way of finding reliable companies is by searching the renowned listings on the internet. and GoodFirms are some of the most well-known listing sites from where you can pick mobile app or software development companies. 

Check marketplaces on the internet: Marketplaces have multiple company profiles which can be searched to look for outsourcing projects. Here you can simply post the service you want to outsource. You can also check reviews on these marketplaces. 

  1. Check for the technical skills of service provider

Before finalizing the partnership, ensure that the service provider has the right technical capability to execute your project requirements successfully. You must know if they are well-versed with the tools and latest technologies. Check if they adhere to the deadlines by reading reviews about the company.  Try finding if the team has previously worked on similar projects/industry or not. Having similar experience can make the task way easier for you as well as the outsourced team. Another important factor to keep in mind is to enquire if they follow SDLC guidelines effectively and whether they work in your time zone or not. Communication majorly depends on collaborating at odd timings. So, inquire if they are willing to provide after hours support if needed.

  1. Always do the background check 

Checking the portfolio of the company before partnering with them is a good practice. It gives you a brief idea as to what the company does, how many projects they have handled, the type of projects (big or small scale)  they have executed, do the review check, talk to their clients to get a better understanding of their operations and the scope of work they will be able to deliver in similar projects. 

  1. Have Face to face conversation

Meeting the remote team in person may sound like a task but you definitely get perks out of it. One of the major advantages of meeting the outsourced team members is – you get to know their working style, their conversational sense, the way things are done at the company, the infrastructure and above all, when the offshore team gets to connect with the client in person, they get a better perspective and understanding of the exact requirements. Also, you get to know the company culture which proves to be beneficial while conversing on collaborative tools. 

To conclude:

No matter whether you are a small business owner or a big enterprise, outsourcing has proven to be quite beneficial in either type of businesses. The biggest advantage of outsourcing your services is you find better talent and a highly productive team that quickly adapts to your work style and functions to deliver their best to the client. OpenXcell, one of the most renowned software development companies in Ahmedabad has been faring quite well in the IT outsourcing sector and already has more than 1500+ solutions delivered in the market and 50+ effective partnerships in various countries. When you are looking for an outsourcing company that is well versed with the industry, you need to look for companies like these, that charge as per your budget but don’t compromise anywhere on the quality. It’s important that the right outsourcing partner is chosen after all! So, do let us know your thoughts on this in the comments section below. 

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Meenakshi Kalyani

Meenakshi is a writer at OpenXcell. Her writing is a reflection of the deep knowledge that she has of the silicon world. Corroborated by intriguing facts and innovative ideas, her articles present every aspect of constant technological evolution. When she is not penning, you will find her painting, traveling, or introspecting her emotions to craft a piece on @sutured_emotions.


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