With the demand and costs getting higher in today’s software development market, it makes sense to seek alternative ways for launching new IT products faster, better and cheaper. Software outsourcing becomes one of the most effective practices that help many world-class companies to succeed without losing the quality of development. Outsourcing refers to the type of work organization when a business hands over some of its tasks to another company specializing in this type of business model. When we talk about “outsourcing” it can be both a one-time cooperation or a long-term interaction between companies.
A saying by the well-known economist Peter Drucker “do what you do best and outsource the rest” ideally describes the idea of outsourcing. It enables businesses to effectively use the company’s resources, save costs (on hiring, teaching own staff), and create a quality product designed by the most talented and experienced people in the field. When you outsource IT tasks to another company, you have access to the latest software and devices. Had it been you keeping an in-house IT team, you would be the one to provide them with all necessary stuff, and it would definitely multiply the cost. A company focusing on IT will rarely provide you with amateurs whereas your own team might not have the required experience.
Once decided that you need to hire outsourcing team and formulate all requirements of your project, it’s time to understand whether the dedicated team model can fit your needs. Here are 3 types of IT outsourcing models:
Time and Materials
By choosing this model you pay for time and efforts spent by the outsourcing specialist (everyone has a certain hourly rate). The “T&M” model can also include costs of needed resources, like Jira or licenses. It’s one of the most common model used in outsourcing due to its flexibility. Payments are usually made every month based on the amount of working hours. If you hire only a developer, be ready to act as a Project Manager: you will be the one who sets tasks, controls performance and all changes along the way. In case you don’t have time to be fully involved in the project management, hiring a professional PM as a part of an outsourcing team is the most suitable option.
Example:
A business owner contacts an outsource company aiming to create a mobile app for his e-shop.
He doesn’t have any clear vision and opts for a “T&M” model because it enables to modify the scope, add features and expand the project in the future.
Outstaffing
In this case you are responsible for all job duties of the IT team/developer (i.e. you hire them as a part of your staff). It makes sense to choose outstaffing if you already have your tech team but lack some professionals, so the needed task can’t be fully realized.
Example:
A European health management company providing some of its services online needs to improve an existing website. The company has its own IT department but lacks two specialists in Java and PHP. Its choice falls on outsourcing programmers that turn into the European software company for the time of the development process. In this example, outstaffing allows the client to identify professionals and guide their activities in accordance with demands of the project.
Outsourcing
Outsourcing means an agreement between you and an outsourcing company when your contractor will do a specific scope of work for you. Usually, it’s not one or two tasks, it’s a website/app or e-commerce project development, final check, and maintenance. Having chosen this model, you will more likely communicate with the project manager of the outsourcing IT company.
Example:
A company of enthusiasts that provide offline language courses of different levels decide to share and monetize their expertise. They want to build a language learning app, but have no idea of how to do it. So, they search for reliable outsourcing services and ask about cooperation. This helps save money and find the best talents to fulfill the idea.
Advantages of Outsourcing
When you choose outsourcing model, you just drop all the duties to outsource project manager and simply give instructions. PM evaluates the task, agrees upon deadlines and price, that’s it. No more troubles: you just go ahead with your to-do list, as an outsourcing team is already working on your project. Now its completion in time is PM’s business.
Deadlines have always been crucial. But timing doesn’t bother you anymore, as an outsourcing company deals with it now, searching for solutions (if not just correction of the task or new deadlines appear), these are the following:
- overtime
- hire/invite developers of a top category
- hire more developers to share the task
You may not even be aware of a problem, as it will not affect the outcome, if professionals in the outsourcing company perform well. By outsourcing IT tasks, you get combined skills and knowledge. In most cases you pay less than if you hire a full staff of in-house IT professionals.
When Hiring an Outsourcing Team Makes Sense
If IT is not a priority of your business, you should consider outsourcing. Hiring an outsourcing team is especially reasonable when:
- You have multiple tasks and need to delegate some
You want to focus on what you do best and delegate other tasks to an outsourcing team. This gives you possibility to think about the business and the ways to improve it. In this case you should clearly understand what outcome you want to see and therefore skills required.
- Your project is short-term or can be divided into separate stages
The realization of your project will take up to 6 months, and there is no point in hiring and training your own staff. The projects that are divided into several stages are also perfect candidates for delegating to an outsourcing team.
- You want to design an MVP project
The goal of any MVP is providing quick value and feedback with minimum development costs. Gathered data helps identify further steps of improvement to satisfy the customers’ needs most efficiently. The positive experience of some tech giants, like Alibaba, Slack, and Github suggests that outsourcing an MVP can be a good idea.
- It’s a startup
In this case the outsourcing helps reduce a lot of workloads and makes you able to concentrate on certain tasks that you do best. Hiring an outsourcing team is especially reasonable at the stage of audience testing, when nothing is clear and you want to explore all options without committing to long-term investments. An outsourcing team can help you to understand which product development is more profitable for you (for instance, if talk about tour operator, what is more popular - cruises or tours, or if you develop a mobile app, which audience is more interested in it - IOS or AOS, etc.)
- You can provide only a part-time job
It’s unreasonable to have a developer as a part of your company staff, if you cannot provide enough tasks. Developers are interested in a full-time job, as they are normally happier when actually developing something and not just sitting around. It is important for a developer be engaged in different tasks, stay on trend, and remain competitive. There is no point to overpay for a developer’s downtime, hiring an outsourcing professional is more wise.
- You need a professional support after the project's completion
The post-development support may include technical support for the product whether it's a website or an app as well as different improvement and updates if needed.
- You want to save costs
You don’t have to pay regular salary to an outsourcing company, As most of them charge per project or hourly. You can outsource the tasks that you need and when you need it, therefore controlling your spending.
Best Outsourcing Opportunities in Ukraine
Contemporary technology allows us to choose from a multitude of options, but basic requirements remain the same: price, time and quality. There can always be something missing depending on your choice. Vast category of clients opt for orient developers being attracted by the price, but at the final end they regret. No secret that Ukraine has recommended itself as one having the best combination of requirements.
Here are the 5 top why's to choose an outsourcing team from Ukraine
- Price. Several years ago Ukraine was among the top 10 countries with the lowest income for hired workers, these days things haven't changed drastically, unfortunately for the locals. The price is something a Ukrainian outsourcing company will surprise you with. Recent years Ukraine has been called an offshore outsourcing, worth mentioning, that the price doesn't affect the quality.
- Favorable Tax Regime. Should it be due to a certain historical past or nation's treat of character but global ranking of outsourcing opportunities shows that Ukraine has long been among the leaders. It is because of a combination of factors, but a favorable taxation is one of the determining reasons. Tax burden for IT companies in Ukraine are much lower compared to many other countries (see the table below). If you contract an outsourcing team from outside your country, let’s say Germany, you avoid paying a tax, that is mandatory if hiring a resident. Basically, you can reduce the expenses on a totally legal basis, without loss of efficiency and quality.
- Quality. This point should have been the first in our top. Ukrainian IT market is growing 20-25% every year, which makes it one of the most rapidly growing IT markets in the world. Level of education in Ukraine is remarkably high in terms of number of people bearing a university degree, as well as master and PhD titles. A combination of talent, education and flexibility will grant you the optimum result, the quality you deserve.
- Time and resource-savvy. If you hire your own team in any other country of Europe or overseas it may require tons of extra activities, such as spending time to search for programmers, find a person who will interview them and check skills, the onboarding process itself. Hiring an outsource team will eliminate all these troublesome points.
Nevertheless, not all the outsource companies on the market can boast with a complete and high-qualified team of full stack programmers. We are here to help you out. By choosing Covent IT as an outsourcing option, you get not only a developer for your project, but a team of professionals able to fulfill your ideas and plans. Our team consists of Project Manager, Tech Lead, DevOps Engineer, Full-stack developers (PHP, Java, Python), and QA Engineer. Our tech-savvy PHP developers can assist you in creating a robust quality product whether you need a simple website/landing page or more complex solutions. They have experience in working with shopping carts, payment systems integration, as well as conversion tracking.
Moreover, we provide quality solutions for both outsourcing (usually, short-term projects up to 6 months) and outstaffing (help choose and hire dedicated development teams) models. We also provide part-time services like supervised QA / DevOps and knowledge of experienced PM or Agile coach. Covent IT’s expertise covers but not limited to the following IT directions: E-commerce/E-retail, Mobile, FinTech, Information Portals, Server administration. Contracting us will give you a set of extras like:
- Hosting
- 6 months website guarantee (with admins technical support)
- 3 months bugs detection and elimination.
Our well-knit outsource team that has been working together for over 4 years, knows each other's strengths and weaknesses, which allows us to choose the best team for each project.
Takeaways
Whether you have a small business and thinking about cutting costs or don’t want to be involved in software development, outsourcing can be a suitable model for you. Many countries can provide you with a lot of options, but when taking into consideration the quality, price, and location, Ukraine is on the top of the list. It has the largest talent pool of IT
