IT outsourcing is a rapidly expanding sector of the industry and a helpful solution for various companies. Large corporations and emerging startups utilize the advantages of outsourcing for their enterprises. This strategy enables you to reduce expenses or achieve a more competitive edge.
Furthermore, according to a Deloitte survey, COVID-19 has dispelled the notion that the physical presence of resources is essential for fostering a trustworthy connection in the workplace.
All of these indications imply that there will be a greater inclination towards IT outsourcing.
As a Business Development Manager, my primary duty is establishing a connection between innovative companies and the skilled staff at Zeus.
I am proficient in managing all aspects of the IT project outsourcing process, including team building and project management.
Here is a comprehensive manual on IT outsourcing. I will elucidate the concept of IT outsourcing and delineate its advantages for your business, highlighting that cost reduction is not the sole benefit. Overall, this book will provide you with comprehensive information regarding IT outsourcing, helping you determine whether you genuinely require IT outsourcing and the reasons behind it.
What Is IT Outsourcing?
Let us begin by addressing the fundamental inquiry – what precisely is IT outsourcing?
IT outsourcing refers to relocating a portion of software development activities from an internal organizational structure to other entities to reduce expenses and maintain oversight over all operational procedures. You essentially delegate job implementation to the partner while monitoring progress.
IT outsourcing can be conducted either offshore or domestically. Three primary forms of outsourcing pertain to the location of service provision:
3 Types of IT Outsourcing
- Onshore
- Nearshore
- Offshore
- Onshore. It involves the recruitment of skilled individuals who are situated in your city or proximity. It is a favourable choice to maintain complete oversight at a reasonable expense.
- Nearshore. It involves delegating tasks to nearby countries that share the same time zone. Opting for this choice facilitates communication with developers; however, it may not always be advantageous.
- Offshore. It involves the delegation of tasks or services to a foreign country. This category enables you to accumulate the most amount of savings.
Clutch reports that in 2023, a significant majority of small firms, precisely 83%, want to maintain or augment their expenditures on outsourced business services. Additionally, they emphasize that the primary objectives for IT outsourcing are:
- Reduce expenses;
- Incorporate industry expertise into the internal team.
For entrepreneurs, particularly those leading startups, IT outsourcing can accelerate business growth and achieve more significant cost savings than maintaining a small internal workforce. Large corporations such as Google, Apple, and Facebook also outsource to use the experience of employees with diverse skill sets.
Best IT Outsourcing Regions
It has been observed that the primary motivation for organisations to adopt the IT outsourcing business model is cost reduction. The primary rationale is that offshore IT services might be more cost-effective in certain nations. Let us examine the variations in hourly rates across different geographies.
The price should not be the sole determinant when selecting a location for outsourcing information technology. We recommend that you strive to achieve a harmonious equilibrium between the level of expertise, time zone compatibility, communication proficiency, and pricing considerations.
3 Common IT Outsourcing Models
Before entering into a contractual agreement with an information technology outsourcing company, it is advisable to select a cooperation model. The various forms of IT outsourcing are primarily based on geographical considerations, while the outsourcing business model determines the manner of collaboration and the ultimate objectives of such cooperation. Below are three prevalent IT outsourcing models and their respective advantages and disadvantages.
Project-Based Model
How it works: The client engages a team to execute the portion of the project that has already been planned and specified. The project manager of the outsourced team bears complete accountability for the quality and efficiency of the project.
When to use: The project-based IT outsourcing approach is appropriate for relatively simple projects with predictable and extensively researched functionality.
Dedicated Team Model
How it works: The client engages a dedicated staff to exclusively develop a project on their behalf. Contrary to the project-based paradigm, a dedicated IT outsourcing team exhibits higher levels of involvement in your project. In this strategy, an external team assumes the role of your technical and product advisor. It has the capability to provide suggestions and propose alternate options.
When to use: Dedicated team The IT outsourcing model is most suitable for early-stage startups that are anticipated to experience growth, complicated long-term projects that can expand, and projects with several ambiguous needs. Employing a specialist team is the optimal approach if you need to authenticate your concept, ascertain a product-market fit, or construct a minimum viable product to assess the market.
At Zeus, our primary focus is on implementing a committed team approach. The recent story of the real estate app Allgram exemplifies the operations of a comprehensive product development studio. The client proposed the development of a utility application designed to facilitate navigation via real- world events. Rather than opting for an essential execution of the idea, we pursued a more advanced approach.
Our product management team evaluated the initial idea, resulting in the identification of product-market fit and an expansion of the audience. The design team employed an iterative methodology that enhanced the product’s usability. We successfully launched a cutting-edge product, including state-of-the-art UI technologies.
Out-staff Model
How it works: It refers to outsourcing IT services where a complete development team is not required; instead, individual professionals are hired. Occasionally, the project necessitates the acquisition of a few extra experts, and you have the liberty to recruit outstaff personnel to fulfil that specific workload.
The popularity of this IT outsourcing collaboration model has consistently increased, with the global revenue from IT services estimated to reach $1,570 billion by 2027. Web development is the most sought-after IT expertise in 2023, followed closely by DevOps and database software professionals.
When to use: The Outstaff IT outsourcing strategy is most suitable for short-term projects or enterprises lacking specific expertise and requiring additional resources to rapidly expand their operations.
Zeus is a company that specialises in outsourcing and outstaffing. Our services include product outsourcing and staff augmentation. There are two scenarios in which you can derive the utmost advantage from collaborating with us:
- If you have a shortage of internal resources and require additional assistance developing a product, opt for IT outstaffing.
- If you do not possess sufficient knowledge about the product and require a team of professionals in product development (including product managers, designers, developers, and quality assurance personnel) to create your product, then opting for IT outsourcing is the appropriate choice.
Throughout history, we have assisted over 180 companies across several industries in transforming their concepts into commercially viable solutions. Some include Google, DT, UBS, NeoBankers, Skype and others. We have a team of professionals with diverse skills, and we follow the Agile development methodology to ensure flexibility and efficiency in the design, testing, and enhancement of applications.
Rest assured that your goods are in capable and trustworthy hands.
Want to learn more about IT Staffing? Check our article.
Why You Should Use IT Outsourcing
Having gained an understanding of IT outsourcing, including its models and types, it is necessary to elucidate the reasons for outsourcing and determine its necessity. Let us examine some scenarios that indicate whether it is advisable to choose IT outsourcing.
You Are A Domain Expert With Idea
f you possess specialised knowledge in a particular field and have an idea that effectively addresses a genuine issue, opting for IT outsourcing is the most suitable decision. Your primary objective in this scenario is to penetrate the market and evaluate the answer swiftly. Engaging an external team will assist you in validating the concept, constructing a minimum viable product (MVP) to test the hypothesis, and incorporating modifications into your product based on market demands. It provides cost savings time efficiency, and enables goal attainment.
You Have An Early-Stage Startup
You Need A Technical Support
Suppose you have a solution that requires technical changes, such as backend component frameworks, a new programming language, integrations with business applications, and UX&UI design. In that case, it is more logical to seek out an experienced partner. IT outsourcing encompasses a wide range of functions and effectively eliminates the need for you to allocate time towards recruiting skilled personnel.
Why Outsourcing IT To Zeus Is The Best Option
Zeus is an innovator in the field of IT outsourcing and outstaffing. For almost two decades, we have provided startups and established organisations with highly skilled app developers, enabling them to thrive and succeed. We have created applications for eCommerce, digital publishing, and telecommunications firms such as Deutsche Telecom and Skype. For the past six years, we have collaborated with clients in the fintech sector, including banks, and we approach their products with the same level of care and ownership as our own. We have recently completed a fintech project for NeoBankers, a neobank operating in the European Union. Through our extensive experience in handling large- scale real estate projects, we have acquired expertise in developing applications specifically tailored for this industry.
Explore our extensive collection of cases!
We specialise in the creation of web and mobile applications with varying levels of intricacy, catering to both iOS and Android platforms. The expertise of our organisation is driven by a team of very experienced IT professionals with diverse backgrounds and expertise. Regarding programming technology, we have extensive knowledge and experience in widely used languages and frameworks such as Swift, Kotlin, React, and Node.js.
We assist entrepreneurs in creating a Minimum Viable Product (MVP) to secure more funding and provide our technological expertise to expand their existing business rapidly. At Zeus, we approach the development of your project with careful consideration and dedication, treating it as if it were our own. We present innovative concepts and resolutions to fulfil your business objectives.
How Much Does IT Outsourcing Cost?
IT outsourcing charges might vary based on two primary factors: the hourly rates of developers and the size of the team engaged.
It is crucial to distinguish between IT outsourcing and IT outstaffing. IT outsourcing entails delegating a project to an external organisation, whereas outstaffing enables the recruitment of remote developers to be integrated into one’s team.
The cost of IT outsourcing can vary between $50,000 and $250,000. Nevertheless, when it comes to IT outstaffing, which involves the recruitment of individual developers, the costs can vary considerably. The hourly rate for an individual developer often ranges between $25 and $100, depending on their level of expertise and geographical location.
The hourly fees for Zeus run from $25 to $59, which is around half the cost compared to most European countries and nearly four times lower than that of the USA or Canada. We are committed to delivering outstanding value to our clients without compromising on the highest level of quality.
Summary
This paper aims to debunk the misconception that outsourcing information technology involves low-profile deliverables and is only considered a last- resort option. We have seen that even large technology organizations engage in outsourcing, which offers significant advantages. Furthermore, IT outsourcing presents an advantageous opportunity for emerging firms to economize time and financial resources effectively.
ZEUS is a company that specializes in developing products and primarily follows the Dedicated team IT outsourcing strategy. Our company offers clients a comprehensive team for the entire product development process. Our team of experts will be fully committed to your product, providing their expertise from the initial idea validation phase through the final product launch.
