According to IT Outsourcing Statistics 2017/2018 from Computer Economics, there is a rise in the share of organizations’ total IT budgets spent on outsourcing. Why? Because it works – and here are just a few aspects explaining how.
Capgemini’s Digital Transformation Institute conducted a survey, showing that 54% of the companies interrogated through LinkedIn felt an IT talent gap hampering their digital transformation programs and making them lose competitive advantage. While advanced economies suffer from the labor shortage, IT outsourcing allows finding a trusted service provider much easier and faster than spotting a talent on the domestic labor market. The outsourced companies aren’t limited by state borders, and they can offer a pool of professionals with in-depth expertise in many specific fields, which are beyond the reach of in-house engineering teams.
By choosing an outsourced provider focused on a certain industry or development area, a client company gets a professional partner with extensive skills in the field to deliver both quality and predictability. Working on multiple projects, the vendors accumulate a wealth of experience and develop replicable solutions for typical tasks, which also reduces the cost and speeds up the progress. Obviously, software development outsourcingimplies access to the cutting-edge technologies, since for the vendors it’s a key factor to be abreast of the times. Besides, they build internal platforms to share the knowledge and promote professional growth for their team members, also undertaking the responsibility for their motivation.
There is more to it than just lower hourly rates in India, Latin America or Eastern Europe (though this matters, too). Client companies can safe both money and effort on the hiring and onboarding, including interviewing, training, housing, paper work, purchasing equipment and other hidden costs that usually come with in-house employees. Add up the need to accommodate peak loads, leading either to redistribution of existing resources (and the loss of efficiency) or to adding new IT specialists (and corresponding costs/commitments). Engaging a technology partner is a cost-effective way to balance workloads with no long-term commitments, yet availing from a pricing model based on achieved targets.