Running an IT department can be a major drain on your business's resources. This is largely due to the need for specialized equipment and the extensive process required for hiring and training staff. Moreover, it's important to consider that software developers earn a median annual salary that exceeds the national average by over $64,000 in the USA. Software outsourcing development presents a practical solution to these challenges. It allows you to either bolster your IT operations or entirely replace them with external expertise. Opting for external software developers can bring significant benefits, including the potential to boost your business's revenue.
In this article, we'll explore the benefits of IT outsourcing services while also considering the associated risks and costs. This comprehensive approach will help you make a well-informed decision about whether outsourcing fits your business strategy.
What Is IT Outsourcing?
IT outsourcing refers to when you allow a third party to conduct some of your IT tasks. This third party could be an individual software developer or a team that works for a company. You could even use multiple IT companies at the same time. These companies can be onshore, nearshore, or offshore. These categories indicate the location of the company in relation to your own. For example, a Californian software company would be onshore if your business is in the USA. Meanwhile, a Mexican third party would be near-shore, and an Indian software company would be off-shore.
The Types of Outsourced IT Services
A software company can be incredibly versatile in supporting your business's IT needs. Whether you're looking to outsource all your IT tasks, delegate a single project, or enhance your existing IT team, these companies are equipped with the skills to complement your business at any level required.
Once you partner with a software company, you gain access to a broad spectrum of outsourced IT services tailored to meet diverse business needs. These IT services include:
Software Design Consulting - Expert advice on crafting software that meets your specific requirements.
Project Management Outsourcing - Professional management to ensure your IT projects are completed on time and within budget.
Infrastructure and Architecture Design - Designing robust IT frameworks that support efficient operations.
Full Stack Software Development - Comprehensive development services covering all software stack layers.
DevOps Strategy & Consulting - Streamlining and enhancing the collaboration between software development and IT operations.
AI & Machine Learning Development - Developing cutting-edge artificial intelligence solutions tailored to your business needs.
Discovery Consulting - Identifying opportunities and challenges in your IT environment to better tailor solutions.
User Interface Design (UI) - Crafting intuitive and aesthetically pleasing interfaces for your software applications.
User Experience (UX) Design - Ensuring your software is user-friendly and designed with the end-user in mind.
Testing and Support - Rigorous testing and ongoing support to maintain software quality and functionality.
Cloud Application Development - Creating and deploying applications in the cloud for scalability and flexibility.
Infrastructure Migration - Moving your existing infrastructure to new, more efficient systems or platforms.
However, you should keep in mind that software development companies may only specialize in one area or another.
The Benefits of IT Outsourcing
Outsourcing offers modern solutions to a variety of industries. According to reports, 37% of businesses outsource IT services. To understand why it's such a popular solution, consider the following benefits it offers:
Wide Range of Talent
When you outsource your IT services, you gain access to the skills of various software developers. These developers could have specialities in the project you wish to create or have long experience working with specific software. Moreover, it gives you the chance to find the talent to work on a project whose required skills aren't necessary for your core operations.
Cost Savings
Your internal developers may not have enough work to make their full or part-time employment viable. In that case, hiring, training, and retaining a developer can have a high cost that exceeds simply outsourcing the tasks. Outsourcing these services may cost less for you ― even if your business is in the software industry.
Increased Productivity
One of the advantages of IT outsourcing is that it can help you increase your productivity. It increases your production speed while maintaining the output's high quality. Outsourcing allows you to get as many developers as you need to create a product quickly.
Meanwhile, when you work with only an internal team of developers, you have to hire the ones with the right skills and train them to work in your system. Then, the number of developers limits your project's timeline.
Superior User Experience
Another benefit of outsourcing IT services is the superior user experience it allows you to generate. Since third-party software developers have expertise in specific areas, they can ensure that the output provides an excellent user experience. This will also improve your end users' engagement with the product.
Business Scaling
As your business grows, your current IT team may not be sufficient to complete all tasks within a reasonable timeline. That's when external developers can help you. They'll augment your team, optimize your operations, and help implement projects. Then, you'll have the chance to take on larger projects, grow your revenue, and always feel ready to take the opportunities that present themselves.
Faster Development
IT outsourcing benefits your business by leading to faster product development. Your project progresses faster since there's no need to train external developers in using specific programs and coding languages. Moreover, as new technologies emerge, you can simply hire external developers who have learned how to use them instead of training your internal team.
How Much Does IT Outsourcing Cost?
According to reports, using external software developers can reduce the cost of IT services by 60%. However, this cost depends on the location of the third-party company, their experience, their specialty, and the volume of the work.
Let's explore the cost of outsourcing IT based on location.
Nearshore Countries | IT Outsourcing Cost |
|---|---|
Canada | $35 – $140 |
Argentina | $20 – $90 |
Mexico | $20 – $90 |
Brazil | $25 – $100 |
Colombia | $15 – $80 |
Offshore Countries | Outsourced IT Pricing |
|---|---|
Ukraine | $30 – $81 |
China | $25 – $40 |
Kenya | $20 – $45 |
India | $18 – $45 |
Software developers make $23.08 – $79.81 per hour in the USA. Yet, when we compare this hourly wage to the near- and offshore wages, IT outsourcing costs seem equal. However, you need to keep in mind that for the near- and offshore companies, these are total costs, while when you hire an internal developer, you need to consider benefits, equipment, and the training they'll undertake. Moreover, highly skilled developers will cost less in offshore companies compared to their USA equivalents.
Now you know that the benefits of IT outsourcing include access to a larger pool of skills and increased productivity. In addition, the output from this process can lead to a better user experience and a faster development timeline. You can even consider outsourcing your IT services as a revenue optimization strategy. It reduces your expenses by minimizing costs related to hiring, training, and equipment. Choosing one of the best outsourcing software developers, such as Divelement, is crucial to optimize your IT needs, ultimately scaling up your business cost-efficiently.