Today, it’s difficult to find a businessman or ordinary worker that didn’t hear about outsourcing. From the 1950s, different companies delegate secondary tasks to partners and focus on important processes by themselves. In the late 1990s, outsourcing ideas came to the IT sector. Modern external developers unite in large outsourcing firms that take care of development, testing, support, maintenance, and so on.
In 2016, Deloitte conducted a survey focused on outsourcing trends and attitude. The results were impressive as 72% of respondents from various companies answered that they prefer outsourced development rather than in-house alternatives. Three years later, Deloitte stated that it’s the era of disruptive outsourcing based on cloud computing and automation. New things are right here so it’s the perfect moment to implement them!
Understanding Outsourcing and Offshoring
First things first, let’s differentiate outsourcing as a global process and offshoring as its part. Put simply, outsourcing is the form of cooperation between firms or individuals in which one team delegate specific tasks to another team/person located outside of the first company. It’s like hiring a freelancer but with a more professional approach and better guarantees of the quality results.
Simultaneously, outsourcing divides into three types:
- Onshoring. Local corporations from the same country/city.
- Nearshoring. Teams from neighbor countries and/or the same timezone.
- Offshoring. Overseas firms, usually, from other parts of the world.
To choose the most suitable type, you should remember about languages, timezones, cultural aspects, and labor costs. Generally, it’s better to balance between low rates and convenience of partnership.
Further, we will look at offshore outsourcing, mainly. It has both pros and cons but it’s extremely popular now because you can easily contact any outsourcing company regardless of its location. Thus, offshoring becomes simpler and delivers valuable benefits.
Top Reasons of Hiring Offshore Developers
Well, the question is: why offshoring is required for modern IT projects? We will answer with five key advantages of this cooperation.
1. Better Cost Efficiency
One of the main problems for startups is high spending. Quarts reports that 46% of fresh companies fail because they exceed budgets and can’t handle constantly growing expenses. Cost efficiency is crucial for experienced businessmen and stable firms, as well. With offshore brands, you don’t have to spend money on office rent, staff selection and training, insurance, vacations, and operational costs of building own in-house IT department. Instead, you can spend more on the product itself. Moreover, the lower cost of living means reduced expenses on salaries.
The idea: offshoring features lower prices, including direct (as hourly rates that can be as tiny as $10 per hour in Asia) and hidden ones (as rent or paid sickness).
2. Higher Productivity
But you can save not only in terms of money. Time is an essential resource, too. Just compare two approaches and imagine the difference in time spent:
- Building an in-house team: understand the market, learn about development basics, compare vacancies, look for staff, hire workers, create and maintain the team.
- Hiring offshore devs: check offerings and partner with the chosen brand.
As you see, with offshore partners, you don’t have to focus on the project management, HR tasks, and other aspects of internal work. Instead, you just contact the chosen team that has enough knowledge to finish your project quickly. It’s like assembling a car from scratch compared to purchasing it in a showroom. The first option is viable but only if you have enough skills and time while the second one is common for the majority of clients.
The idea: outsourcing teams boost the project’s productivity because they focus on it fully. You just should delegate tasks and rely on professionals.
3. More Skilled Talents
Continuing the previous point, it’s simpler to find workers outside of your home country. Normally, the majority of skilled workers in the USA already have good jobs and don’t plan to change them. Instead, a lot of talents in Eastern Europe or Asia want to join a software company but can’t find vacancies in their countries. Here, offshoring connects these parties to create the win-win partnership in which clients get cheap but professional devs while employees receive valuable job offerings.
The idea: global talent pool includes hundreds of software developers all over the world. With an offshore partnership, you can find and hire them.
4. Perfect Collaboration
Usually, when a given business decides to get a team of developers, it cooperates with established companies. In this case, you can forget about the problems. The thing is that professional teams work together for years so they know each other perfectly. Thus, any miscommunications or conflicts are extremely rare. When you hire in-house specialists, you can’t say how they will work together but you definitely know how offshore established teams do this. The best of them act like a single system.
The idea: experienced development teams work without conflicts and misunderstandings so their productivity is high.
5. Tech Advantage
Remember the Deloitte’s insight about disruptive outsourcing based on clouds and automation? Nowadays, businesses try to get competitive advantages over their market opponents to attract more clients. With innovative technologies, it’s easier to deliver better products/services. However, it’s not as simple to find skilled devs that have enough knowledge of clouds, blockchain, IoT, automation, robotics, and so on. Outsourcing firms deliver professionals even for the most exotic and innovative projects.
The idea: consider offshoring if you want to implement complicated technologies or innovations as you can find remote professionals easily.
Bonus: The Ultimate Checklist
Finally, we want to gift this small but exhaustive list that includes key steps on cooperating with remote development teams. If it’s your first outsourced project, just follow the steps revealed below:
- Define the business’s goals and strategy, plan the required software products.
- Understand which technologies will be used and which skills you need.
- Plan budgets and schedules for the upcoming project.
- Explore offshore areas and development companies there.
- Contact with the chosen team and agree on terms & conditions.
- Manage the project or delegate it to outsourcers.
- Evaluate performance, get reports, and check results.
- Pay for the work.
- Order further support/maintenance (optional).
Using this checklist, you will be able to enhance the entire cooperation and get the most advantages out of the cooperation. In addition, these tips should save time and money by protecting from painful misunderstandings.
At the end of the day, offshore developers can handle different tasks that are normally completed by in-house IT teams. With this type of partnership, you can save on hiring, training, and rewarding employees. By choosing external professional teams, businesses get workers with the required skills for each project. Hence, modern outsourcing is almost inevitable because of globalization.