Where to Outsource IT Services in 2017

Monday, April 17, 2017

Where to Outsource IT Services in 2017


The share of software development outsourcing is ever increasing and expected to make up more than 12% this year. Companies are expanding their IT departments and reducing product delivery time and cost. How to follow their way efficiently?

IT providers are now deeply concerned about increasing the value of efficient IT outsourcing. While making offshore resource augmentation, the CIOs aspire to involve a manageable number of outsourced staff and define what works out better in financial terms. However, the key considerations for choosing the outsourcing vendor are not limited by the cost reduction. The companies make a point of technical sense, innovation, experience and staffing opportunities, and even cultural affinity.

Here are 3 brief facts on IT outsourcing trends and stats in 2017:

  • Cost reduction remains the most considerable factor to strengthen the team with offshore developers, followed by the conformity with the business objectives and access to resources.
  • 65% IT vendors are planning to increase the amount of outsourced work
  • 20% of companies are reported to improve project’s efficiency

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Before rushing into filling in the staffing blanks by means of external resources, a business needs to fully understand rates across different global regions, and set their financial goals. At the same time, it’s worth questioning: does ends justify the means? The priorities across the IT outsourcing have shifted to skills- and technology- based, besides, the product end value shouldn’t be underestimated. Instead, the choice of potential vendor requires comprehensive investigation of the core factors:

  • Vendor environment – real estate prices, taxes, GDP.
  • Effective management – a high-level project management and a team lead who will help to manage the team and tackle all technical issues.
  • Cultural match – language conformity, working approach. 

The closer look on random top outsourcing vendors at clutch.co showed how drastically can the prices vary across the regions.

USA: Tivix, San Francisco, California, $ 100-149

  1. English language 
  2. Law regulations conformity
  3. Advanced IT culture & background

Although hiring developers from the US and Western Europe ensures the high legal and technical standards, the prices may seem inaffordable for limited budget.

Asia: MindInventory, <$ 25

  1. Considerable/diverse talent pool
  2. Low-cost projects
  3. High employee loyalty 

The opportunity to delegate tasks to Asian teams and save up to 80% of the costs has made them the most demanded region to outsource. It takes years of market investigation and to find out whether it suits the company, and what kind of outsourcing model will suit you best.

The top players on the market are India and China, followed by lower-cost Malaysia and Philippines.

Eastern Europe: Elinext, $ 25-49

  1. Understanding of foreign markets, customer service, and other cultures
  2. Profound technical skills
  3. Reasonable price

Eastern Europe cannot boast the prices as low as they are in India or China (cost savings up to 50 percent in comparison with average 75 percent in India), but it has proven to provide better development processes, quality assurance, and proximity to Western Europe.

The sector can be divided into two regions: Ukraine, Belarus, and Russia (lower costs) and Poland, Hungary, Bulgaria, Romania and the Balkan countries (higher costs).

It becomes clear that if a company turns to external outsourcing, they will considerably reduce expenses and at the same time get exceptional-quality software packages on time.

By  33rd SquareEmbed

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