Why do companies outsource?

 
There were times when companies had to look for new employees only in one city where they had an office. However, these days even though such a variant is still valid, companies have opportunities and technologies to look for needed employees in other cities and even countries.

If previously only IT-field has used this possibility, now it has spread almost everywhere on business-market. Before we start discussing reasons why companies do outsourcing, let’s determine what is term “outsourcing” generally means.
 

What is “outsourcing”?

Outsourcing is a certain kind of collaboration where one company hires a team or some specialists from the company-provider to perform needed tasks or projects. A company-provider should have all the needed tools, resources, plans, and professional team or, in other cases, should be ready to search for them.
 

Why do companies usually decide to outsource?

Fast-moving digital transformation has made and is still making many companies go after new digital solutions so that they can offer up-to-date products and be more successful among other opponents. However, not many companies have IT-specialists who can work on such projects or they even do not have knowledge of that. Outsourcing software development comes in handy here, as it can:

• reduce costs for development;
• solve placement issues;
• improve project quality;
• help your company find great professionals;
• free-up your time for other business goals, etc.

However, the best benefit is that even if you have a small- or medium-sized company, you still can use the benefits of outsourcing development. The provider of the outsourcing team should already have a streamlined process of project development. Thus, they can correctly assess the project price and make adjustments to your requests. The company will even consider a specific timeframe for product development.
 

Then why do companies outsource to other countries?

Nowadays, it is not strange or rare to search for an outsourcing team somewhere far beyond your own country. As a rule, companies from developed countries opt for outsourcing companies from developing ones.

At first sight, it does not make any sense. However, if you study closer then you will find out some justified reasons:

• Lower costs once again. For example, companies from Europe, the USA, UK will hire software development companies from Eastern Europe or India, as they have sophisticated experts with lower salaries in comparison with their countries.
• High standards. Even though the outsourced team from another country will cost you less, they still work on global standards and use up-to-date practices.
• In 9 times out of 10, specialists from India or Eastern Europe have a better technical education. Their countries have well-known universities that educate great specialists each year.
• Development teams from other countries always try to do all their projects on time and according to clients’ needs in business.
• Outsourcing software development from other countries in different time zones is a great way to keep your company continually running. Outsourcing offers agility, and projects are more likely to be completed on time.

Of course, some clients are afraid of differences in time zones and miscommunication as outsourcing companies might have a different culture. However, all these issues can be solved if you correctly organize the outsourcing development process. Read about it in our article “Great ways to manage an outsourced development project”.
 

Why do companies choose software development for outsourcing?

Not all businesses have in-house development teams with them. However, to be successful and popular among their target audience, they need to implement new tech solutions, instruments, and ideas. Otherwise, they will not keep up with the hectic business-markets they work with.

If we are talking about such spheres as Healthcare, Logistics, Finance, and others, they especially need IT-solutions to make their work precise, correct, and simpler. Otherwise, someone’s life, money, and work will be at stake.

Outsourcing software development solves it all. Your company does not need to search for IT-specialists, devote time, large sums of money, and office space for them. Instead, you have a ready-made outsourced team with all the needed tools and knowledge for software development, about which process you do not have the foggiest idea.

In other cases, even IT companies search for outsourced teams, as they are quite busy or do not have needed specialists for the project development.