Over the past few years, outsourcing has become firmly embedded in the economic life and business. Using third-party services to solve problems in the widest range of information technologies that can be called the trend.
The use of outsourced professional services by companies in any industry helps to improve the competitiveness of the company. Also, it supports access to the necessary professional resources with a certain reduction in the cost of their tasks.
If you want to be a part of software development outsourcing this article is for you. Read it to find out what software outsourcing is, the pros and cons of it, and what problems it solves.
General description, kinds, and its necessity in different areas
What is outsourcing in simple words?
The word «outsourcing» is of English origin. It originates from the fusion of two words: out means «external» and source means «reference». So, outsourcing is the process of transferring the company’s business processes to another company, which is an expert in this field.
Delegating processes that are not related to the main production. But they are strategically important for the outsourcer, the company makes a mutually beneficial exchange. It’s worth distinguishing between the concepts of one-time support and outsourcing.
One-time support is episodic and an outsourcing service agreement is concluded with the outsourcing company for a certain time. What is driving companies to outsource? First of all, the unwillingness to waste time on minor activities and functions.
What are the general kinds of outsourcing?
Depending on the location of the customer and the contractor the outsourcing can be distinguished:
- Offshore – when the customer and outsourced company are in different countries. Meanwhile, the contractor is a subdivision of a customer;
- Outsourcing – when both the customer and contractor are in the same country. Meanwhile, the contractor is a separate private enterprise or company;
- Offshore outsourcing is a mixed kind when a customer and outsourced company are in different countries. In this case, a contractor usually is a separate company or enterprise.
Depending on the tasks to be performed, the outsourcing can be distinguished:
- Outsourcing of manufacturing – when the customer transfers business functions to the outsourced company;
- Business process outsourcing when the customer transfers the functions and processes that are not their main activity to the outsourced company;
- IT-outsourcing – when the customer transfers the service of the customer’s information systems to the outsourced company.
Thus, the transfer of minor tasks and functions, as well as the activities of an enterprise or a company to another (outsourced) company, is the main benefit of outsourcing.
So, we found out the definition of outsourcing and its kind in general. But the next issue I will dedicate to the narrower meaning of outsourcing, that is IT outsourcing.
What does software outsourcing service include?
- Computer and office equipment subscribers.
- Information business infrastructure design.
- Installation of local area networks.
- Establishment and maintenance of databases.
- Creation and promotion of company websites.
- Hosting services provided.
- Training, consulting of employees of the customer company.
List of reasons for using outsourcing, in other words, what we need outsourcing for:
- Optimization and cost reduction;
- Insurance of computer equipment operation and quick troubleshooting;
- All questions and problems are solved by professionals;
- Flexible cooperation and payment options: subscription or one-time support;
- Configuration of the computer network for company tasks;
- Performance analysis of IT systems. Achieving maximum performance;
- Data security, order, and documentation of all work.
Whom is it useful for?
- A new company that needs a stable operation and network development;
- Companies with serious tasks and projects;
- Stable development companies.
But all companies need one thing from outsourcing is that everything works.
The development of computer technology today has even led to cloud service computing. The specialists of the service center appear on the serviced object only if it is necessary to replace the defective parts. In all other cases, the problems with the operation of the information infrastructure are solved remotely.
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Advantages and disadvantages of IT outsourcing
Advantages of IT outsourcing
There must be a good explanation for why so many companies use it, right? So, there are several reasons why companies or enterprises decide to outsource some of their businesses.
- Examination: sometimes a foreign business has special equipment that makes them better to perform the task within the outsourcing organization
- Reducing costs: outsourcing abroad is more attractive to save labor, jobs, and equipment
- Staff flexibility: outsourcing will allow seasonal or cyclic operations to use additional resources when you need them or refuse them.
Disadvantages of IT outsourcing
- Language or cultural barrier: this may be a problem in communication and understanding between a customer and a contractor, especially when it is necessary to explain the problem and its solution quickly.
- Different time zones: this may be a problem in communication and coordination with a customer.
- The potential loss of quality if you do not spend time on clear control. In this issue, I highlighted the pros and cons of outsourcing, to my mind. You can read some additional information from other sources and compare them. But in any case, you have to consider carefully all pros and cons and decide to be or not to be a part of software development outsourcing.
Preparation and steps
The third important issue of my article is preparation for a project and four recommended steps to do it well.
Steps of preparing projects
- Establishing roles and responsibilities. To make sure that everything goes as planned, point people in charge. Everybody of your team will know their exact responsibilities and roles, when and whom they should provide a regular report to. As a result, you will succeed in building a transparent workplace, that grows the productivity of the team.
- Planning of tasks. The second important step in preparing the project is planning. It’s a good idea to start your collaboration with a blueprint together with a customer. You establish terms and expectations from the very beginning.
- Get the required access. Create a list of documents and things to which your team should have access.
- Selecting tools. The next important step is to prepare collaboration between your business team and external provider. The best way to do it is to identify the tools using during the process of development:
- pick up a project management solution tool, like Trello or Jira. Make sure that every one of your team knows how to use it;
- select a time and account tracking tool, like Toggl or Harvest to record time spent by the team of developers for the outsourced task;
- choose a Google Drive or Dropbox. It allows sharing the documents with your team in order to save time in finding specifications or documents.
So, we found out that outsourcing is the transfer of tasks, and functions, or a part of them to those who can do it better, cheaper, and faster.
Outsourcing is useful for any company: small or large, new or stable development company. Outsourcing has several types of activities, I described in more detail IT outsourcing. I told about the services it provides and the pros and cons for both: the contractor and the customer. Also, I described the phased preparation for the new project. I hope, this guide can help you to grasp and master the information about outsourcing.
Maybe you want to read some more information about IT. If yes, I would like to recommend this article: “Software developer vs software engineer”.
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