Having an in-house IT department may not provide your business with all the necessary tech solutions and programming languages. Outsourcing contractors can perfectly complement that.
Different countries offer different conditions. For instance, in Eastern Europe, developers offer their services at lower prices than those in the United States. So, the question is which supplier to choose.
One of the possible options is outsourcing software development company. You can get various IT services at affordable prices.
Anyway, what should you consider when choosing an outsourcing partner? What are the possible challenges for IT businesses?
Why Use Outsourcing Services
Many large corporations from the US and other developed countries outsource their IT tasks. It is justified for many reasons and increased productivity.
- Businesses save time and money in addition to costs.
- Organizations receive access to extended pools of resources and experts.
- Newly hired engineers know more programming languages than in-house staff.
- In-house teams will have an opportunity to finally concentrate on the core business activities instead of wasting time on tiring secondary activities.
- Qualified developers and project managers with vast experience can work on your product, guaranteeing top quality.
More reasons are known, and even such giants as Google, Microsoft, IBM, and Samsung refer to these benefits while explaining why they outsource. Make a list of tasks that can be outsourced with no fear or risks to your entity. Then, decide on the assignments that can be delegated to the third parties.
Factors to Keep in Mind When Selecting an Outsourcing Vendor
Many decision-makers wonder how to pick the right outsourcing company. This process requires a careful approach. Thus, you should definitely take care of several tasks:
- Determine and formulate the main goals and objectives of the cooperation before proceeding with the process of signing a contract.
- Clearly formalize all procedures and describe them in the contract.
- Describe the organizational procedures.
- Describe the procedure for the termination of the contract.
- Pay attention to the distinction between responsibility limitations and mutual obligations.
- Define precise and unambiguous factors for assessing and evaluating the outsourcing company's work results.
Now, let's talk about the specifics of cooperation models. It is an essential factor when choosing a company because it directly affects the work process, in particular – the ease of communication.
Offshoring
You outsource tasks to a company that is far away from you, out of the country. This model is valued for its cost-effectiveness. Just imagine how many options open up in front of you; you just need to choose the right pricing.
It is only natural that there are some difficulties associated with distance: language barriers, time zone differences, and cultural differences. But they can easily be overcome by discussing the nuances of cooperation before concluding the contract.
Clarify communications first: what languages the team members speak and what tools they use to communicate with customers. Find out about public holidays and weekends so that you can create a schedule that works for both parties.
Nearshoring
In this case, the outsourcer is much closer, in a neighboring country. It is a good alternative to the previous option. The model is often chosen by Western European companies, turning to specialists from the eastern part of Europe for help.
There are no pitfalls associated with the time difference, which simplifies communication and addresses urgent issues. Also, working with a neighboring company allows you to minimize the impact of language and cultural peculiarities.
There's another critical nuance that many people forget: the same data protection laws applicable in Europe. It makes sure that data about your business processes is in safe hands.
Onshoring
This model implies the most "close" cooperation. The outsourced team is located in the same country. It guarantees a full language and cultural understanding of both teams, as well as eliminates time constraints.
Despite all the advantages, this model is inferior to the previous ones in terms of cost-effectiveness and diversity of skills. It means that you are limited to what the local talent market offers and have a much lower chance of saving money.
The next question is how big an outsourcing agency is. Let's have a look at both large and small agencies that offer offshoring, onshoring, and nearshoring.
Large IT Outsourcing Companies
Accenture, Luxoft, and so on are just some examples of outsourcing industry monsters. They are famous for their projects and credible, but only just as large and authoritative companies work with them because of the relatively high costs and some other nuances. The experts from these corporations can undertake a large-scale project with the same budget. However, implementing a project in a large corporation can take from a few months to years. The main reasons for that termination are an inefficient use of resources and bureaucracy.
Small IT Outsourcing Companies
Small companies that offer outsourcing services for the IT area mostly specialize in app development and design (UI/UX). They have all the necessary knowledge and skills in top programming languages and the same modern tech stack that large companies have. However, they tend to carry out projects way faster (something around six months on average), being much faster and more flexible. These companies are more likely to work with peer-to-peer startups and mid-sized businesses. They are certainly more reliable than freelancers, and they have more expertise.
How to Select an Outsourcing Partner
So, you want to hire a company to handle web development issues. First of all, decide which technology you want to use. For example, not every company builds websites on Drupal, Magento, and WordPress at once. Draw up your project in general terms and show it to a specialist you know to determine the price and expected deadlines. Consult an attorney to learn more about various legal aspects.
Another option is to talk to several outsourcing companies you consider as potential partners and compare their answers.
The second question is the region/country where the company is located. Consider economic level, taxes, average salary, and b proficiency. It can be very cheap but also hazardous from time to time. Sometimes, outsourcing services can be expensive with no compromise on quality.
You should also pay attention to the outsourcing firm's experience. Find out how many years it has been present on the market and whether there are customer reviews and case studies available. A great solution is to contact their clients on different social media platforms or write direct messages via email. Satisfied customers will be happy to share their positive experiences.