In 2022, most organizations faced difficulties finding candidates, in particular software developers & engineers. As today’s dynamic landscape is data-dominated and data-powered, we see an ever-increasing skill shortage speaking about information & technology specialists.
Given this overwhelming tendencies, information & technology outsourcing is rapidly gaining momentum:
- In 2020, the global IT market (both internal and external) was worth $715.93 billion
- In the same year, the global ITO market was valued at trimming $556.67 billion
More and more startups and enterprises are increasingly moving towards hiring remote software developers and delegating web and mobile development, quality assurance, design, writing, and other related services. Some transfer payroll processing, customer support, and marketing.
No wonder strategic-thinking organizations are approaching end-to-end offshore software development. Explained briefly, this model of cooperation allows companies to get things done without compromising operational efficiency.
IT outsourcing in brief
The types of outsourcing
If planning to delegate particular services such as customer service, your organization can turn to freelancers. But intending to transfer multiple objectives, in particular complex processes, your company should contract trusted partners to cover every stage from discovery to deployment and maintenance.
You can find assistance, acting upon four types of outsourcing:
a. Onshore development
This approach means transferring some processes to an external vendor located within your country or region. That means more control, almost no communication barriers, and better market understanding.
b. Nearshore development
This approach means transferring determined processes to an external provider from a neighboring country. That brings cultural and language resemblance and commonly lower rates.
c. Offshore development
With trusted offshore talent, you outsource the project to a far-located destination and enjoy:
- A large talent pool — with this cooperation model, you can access talent from literally all over the world
- Much lower work rates — popular destinations like Ukraine provide considerably cheaper services
e. Hybrid outsourcing
This model means combining different approaches to find the one that suits your needs and requirements.
The services to outsource
Here are the most common services being outsourced:
- Web and mobile development
- Legacy migration and optimization
- Business consulting and analysis
- Project management
- Quality assurance
- UI/UX design
And the top industries using outsourcing:
When choosing future partners, examine their industry-specific expertise, their portfolio, and testimonials. With required sector-specific knowledge & experience, a reliable healthcare software development company can deliver EHR & EMR systems, ERP & CRM solutions, and custom telemedicine applications.
The same goes also for other large segments, including automotive and transportation, construction, energy. For example, having extensive technical expertise, a third-party ecommerce software development company can design value-added products that automate retail and wholesale management, analytics, reporting, accounting management, and more.
Talent shortage impacting businesses
The recent COVID-19 outburst has impacted both workforce and economy causing significant talent shortage. Both startups and mature international enterprises are recovering but struggling with attracting and retaining new candidates.
The impact of the COVID-19 crisis was great:
- According to recent research, 9 in 10 companies are finding it difficult to fill open positions
- As reported by ManpowerGroup, 3 in 4 companies are struggling to hire suitable talent
One reason for the constantly increasing talent shortage is the digital technology revolutionizing operations. About 17% of those employees surveyed said they’re planning on shifting careers to feel more secure.
Another reason for this talent shortage is that most employees are changing their mind about the 9–5 schedule. That’s why some are approaching freelancing as an alternative solution.
IT outsourcing: Key benefits
Hiring remote software developers, you delegate complex processes to specialists that have required expertise. This way, you eliminate software and hardware updates, recruiting, onboarding, and other related expenses, enjoying sensibly reduced costs.
By using custom offshore software development, you get the team you need skipping intense routine tasks. This eliminates resource-intensive headhunting, interviewing, training, and waiting for employees to assimilate, reducing time-to-hire and overload.
With assistance from third-party IT vendors, you can easily expand your capabilities by involving more experts.
With contracted IT vendors, you can anytime access well-aligned professionals that poses necessary expertise and resolve your challenges.
IT outsourcing: How to find reliable third-party providers?
Don’t underestimate market research
Before outsourcing software development, compare vendors focusing on:
- Technical expertise
- Project portfolio
- Key industries
- Technology stack
- Customer testimonials
- Service costs
Before outsourcing software development, first choose the best-suiting cooperation approach and destination. Don’t forget, there are various aspects worth considering — salary legislation, cultural and language differences, and more.
Estimate your project’s scope
When delegating your project, take note:
- Large-scope projects will be more expensive, as they commonly require industry-specific expertise
- Small-scope projects are cheaper, as you can involve less specialists
Define the required expertise
You should define specific technical knowledge and experience you’ll need to ensure your project will succeed. Complex implementations — artificial intelligence, computer vision, and other cutting-edge techniques — require superior technical expertise, and, accordingly, larger investment.
Information and technology outsourcing, in particular speaking about software development, might bring numerous advantages, starting from enhanced performance and efficiency, ending with facilitated security. More and more leaders are moving towards adopting this approach, saving resources, increasing scalability, and utilizing the opportunity to focus on critical business operations.
If approached with the right team, IT outsourcing is a transformative strategy!