IT outsourcing is a term used to characterize the practice of seeking resources – or subcontracting – outside of the company for all or section of an IT function. In simple words – you are shifting some of the functions at the mercy of the contractor (another company or agency) and do not break your head over the administration and supervising it within the company, continuing profiting.
Who should use outsourcing?
Small businesses see for themselves outsourcing, in cases when it’s impractical to hire staff or experienced developers on short-term projects, or you’re deploying your startup and developing MVP (when the task is to test the concept) performing to verify the concept, then hire the team.
This can be beneficial for some reasons. First – senior developers can have dramatic cost for your business, and the other one – you have to consider the cost of rent office and other outwardly invisible, but expensive costs.
For example, if you own a company, imagine that you will be able to free up time to the c-level staff, managers and concentrate efforts in marketing and Business Development Department at the main features for business, due to outsourcing.
Outsourcing for startup is necessary To:
1. Free time for meetings with investors, engaging the epitome of a marketing strategy, management of operational problems and strategic issues, etc.
2. Roll out the project in a short time and to begin to test it on the target audience
3. Reduce the financial burden on the start of the project, when to break-even point is still 3-4 years.
Here, we would like to talk about outsourcing app development companies.
Fast development, fast to market. At the end, that’s what’s most important.
How to choose an outsourcing company?
First, you need to select multiple providers, check the reviews previously converted customers to this company. The company with a good reputation, locates this information open on the site. Also, you should be aware of the country of incorporation. We’ll take our company as an example: it is registered in the United States for more convenient work with American clients, as well as working in the American legal field. In this case, you can be assured and protected by law. The next step is to sign a thoughtful contract.
What should you know about service level agreements:
• Service levels – formally agreed on objectives, which service provider (SP) has to meet;
• They should be established on a detailed timetable, with no doubt as to what is required from the SP;
• Establish the levels of service so that both sides could profit;
• Contracts describe methods for reporting, outcomes and suspense of the SP;
• It could include possible penalties or earnings due to requirements.
“O” for Outsourcing?
• Teamwork and administration
So, working with mobile application development outsourcing company or any other one, you receive an established, a holistic and cohesive team of pros, that will make the best quality product, along with great communication. IT outsourcing involves marketing strategy, a full load of the competent expert on the problems of several companies and costs lower than to have own experts.
• Monitoring, reliability
By “control and predictability” we mean some kind of prevention of risks because there are a lot of things and cases that can involve your project progress.Imagine that people can get sick, suddenly left their inspiration, they may want a vacation at the wrong time, in the office may arise equipment and the internet problems.
So, cooperating with the company you do not have to worry about this and other questions (one team member can be replaced by another and your project will be safe – sounds good, right?).
• QA and terms
Working with a reputable company, you are depriving yourself of a headache because in every self-respecting company has a person who is watching this – the Project Manager. PM is supervising developers and ensure that team is managed and full-controlled.
With “In-house development” you must also consider the cost of space rental (San Francisco – $630 sq. m per year, Washington – $400, NY – $390, London – $1,000-$1,300, Sydney – $700-800 on average), plus hired employee – it is always a providing of the social package, one and a half or double overtime rates hiring in your area (statistic: in California the average salary of the mobile developer Senior Level – $ 80,000 per year in New York – $ 105,000 in Berlin – $ 55,000, London – $ 65,000).
Read also: Cost to Develop an App
Just imagine how much money you can save ($120,000 – $500,000 and it’s only on rental).
As sure as a gun, freelancers put lower rates than any other development company, but less does not mean better. Let’s take a look at what we mean, hiring outsource company you get everything in one:
• Administrative charges: update software and hardware, workplace, corporate and training, hospital, etc;
• Experience, management and expertise: experience with previous similar projects, the best company’s solutions, great time management, unlimited opportunity for consultation.
• Recruiting: indirect costs for you which take over the company. This allows you to dwell no more about personnel, their qualifications, and level of competence.
Benefits of outsourcing mobile app development & remote team:
• Effectiveness. With IT outsourcing a complex problem solution – is a “collective intelligence”, as the experience of solving problems does not collect individual person but a company in general. This integrated approach, which we always use when working on any project.
• Professionalism. Over the years, the outsourcing company develops its own experience in the methodology form, approaches, and operating procedures, which allow not only to solve complex problems but also to accompany and monitor the current operation of the project at the stage of post-release.
• High-quality maintenance and management of IT infrastructure. You have a working team of qualified IT professionals of the contractor, who daily face the multi-level tasks and gain experience of solving them.
• Time-to-market. Outsourcing allows you to launch quickly a new project, which requires the involvement of a large number of diverse IT professionals.
But if we talk about a freelancer, we’re losing many advantages of the individual companies and facing some difficulties in the form of repetitive work. That is, a developer can be kept either by constant or new creative challenges (to be sure that he will not be over exhausted), or high salaries, higher than the market. Both options involve noticeable investments. A bird in the hand is worth two in the bush.
Things that can’t be outsourced
1. Company management. Only when you think about the customers and their needs when you take full managerial functions yourself, only then can a complete success of the company arrive.
2. Architecture planning and development. The company and plans for the future life cycle are known only to those people, who directly work in it. The company itself responds to changes faster and more efficiently. Therefore, the design and development of architecture should be “inside”. IT outsourcer can help in this, but do not own the process.
3. Critical services. This is part of the IT system, which is responsible for key business processes. The ability to change the service quickly in accordance with the market situation and development trends and specifics of the business more visible inside. If critical services engaged in internal IT service company gets a more structured service and can effectively manage it.
But, for all that, if you still can’t decide about outsourcing – think a little about “in-house” development, costs and difficulties you may encounter.
Comparison of software development companies for remote collaboration
|Large companies||Midsize companies||Small companies||Freelancers|
|Number of employees
||251-1000||50-250||Up to 50||Single individuals|
|Skills, stack of technologies
||Extensive set of skills||Extensive set of skills||Focused on some specific field||Very limited|
|Staff on-demand option
||Any service (design, development, QA) can be provided on a part-time basis||Any specialist (designer, developer, QA) is available for hiring on a part-time basis||Often a small team is set up with a close-cut skillset focusing on some specific field, available for full-time||It calls for recruiting a single specialist separately|
|Scale up option
||Set up large project teams for a long-time development and support operation, flexible for adjusting the size of team||Focused on projects with a predictable growth, can grow/cut down a team upon your needs||Enough resources to launch a project, limited to keep up your growth||Eternal hiring challenge|
|Overheads (sick leaves, working place)
||Covered by company||Covered by company||Partially covered||Uncovered|
|Project management and control
||Dedicated full-time PM, Team Lead, transparent process, adjusted reporting and monitoring the process||Dedicated full-time PM, Team Lead, trasparent process, adjusted reporting and monitoring the process||Depends on a previous expertise, company goals, testimonials||None, unless you can read smb’s mind on remote|
||Established, unchangable, not flexible||Established, can be flexible||Main points are covered, no superflous options||Hard to make an individual work on remote|
||Not provided||Provided||Provided and highly welcomed||Provided|
|Risks of partnering
||Low and covered||Low and covered||Medium, partly uncovered||Uncovered at all|
|Avarage contract, $
||$1 000 000||$250 000||$50 000||$3000|
The costs that you expect, using the “in-house dev” team model:
1. Direct costs for IT professionals salaries;
2. Direct and indirect costs for the organization of the working process (the cost of working time, including working space and cost of training and staff development etc…);
3. Other costs (risk management, operational expenses, communication, infrastructure …).
How to try IT outsourcing?
Don’t know how try and where to start? Just focus on your business and let the professionals deal with the rest, don’t make your head hurts!