Edited on 07.05.24
“Do what you do best and outsource the rest” is the business principle first formulated by “the father of modern management,” Peter Drucker, in the 1990s. This approach to business management works to this day.
Content:
- What are IT outsourcing services?
- Types of IT outsourcing services
- Examples of frequently outsourced IT services
- Fields we work in
- Why do companies outsource IT services?
- What are other ways to delegate IT services apart from outsourcing?
- How do you outsource IT services?
The need for rapid, cost-effective scaling is driving a boom in IT outsourcing for leading technology companies. Instead of the stress and expense of building and maintaining large in-house teams, they’re turning to outsourcing as a solution.
Hiring and managing full-time IT staff can be a challenge, especially when you need specialized skills that might not be readily available in your local market. Outsourcing eliminates that headache.
The numbers speak for themselves: according to surveys, almost 92% of G2000 companies benefit from IT outsourcing, and the demand is only growing. This isn’t just about coding – IT outsourcing encompasses a wide range of services crucial to tech companies, including:
- Consulting
- Software design and development (desktop, web, mobile)
- Quality assurance
- Software maintenance
- Ongoing IT support
In this article, we’ll break down the benefits of IT outsourcing for businesses and explore the most in-demand services tech companies are delegating to third parties.
WHAT ARE IT OUTSOURCING SERVICES?
IT outsourcing services involve partnering with a specialized company to handle specific IT functions or processes. This is a strategic solution for businesses that might not have the resources to build a complete in-house software development team quickly.
Here’s the benefit: By outsourcing, companies can focus on their core strengths – the activities that generate profit. Routine IT tasks are handled by experts in the field, resulting in greater efficiency and control.
The beauty of outsourcing is its flexibility. Businesses can choose to outsource specific tasks, entire projects, or even ongoing maintenance. This allows them to scale their IT resources as needed, ensuring optimal speed and money saving.
TYPES OF IT OUTSOURCING SERVICES
So you’ve decided to try IT outsourcing – a smart move! But before diving in, a key decision awaits: where will your outsourced partner be located? Each option – nearshore, onshore, or offshore – presents unique advantages and challenges.
Let’s explore your options:
- Offshore outsourcing involves partnering with a company in a different country, often with significant cost savings. The upside? You can tap into a wider talent pool and potentially benefit from a more favorable economic climate. However, time zone differences, language barriers, and cultural considerations can add complexity.
- Nearshore outsourcing is a happy medium. You partner with a company in a nearby country, offering similar time zones and potentially shared cultural nuances – all with some cost savings compared to onshore options. The downside? The talent pool might be smaller than offshore options.
- Onshore outsourcing. Here, you partner with a company within your own country. The benefits are clear: easier communication, similar time zones, and a shared cultural understanding. However, you might face higher costs and potentially a smaller pool of available talent depending on your specific needs.
But wait, there are two main ways to categorize IT outsourcing services: by location and by service type. Here are some of the services and IT functions delegated to IT vendors:
- Software development. This includes outsourcing the entire software development lifecycle, from concept and design to coding, testing, and deployment.
- Application management. Outsourcing the ongoing maintenance and support of existing software applications.
- QA and testing. Enlisting external experts to test and ensure the quality, functionality, and performance of software.
- IT Infrastructure Management. Outsourcing the management of a company’s IT infrastructure, including servers, networks, and data storage.
- IT security services. Hiring external specialists to handle cybersecurity threats and vulnerabilities.
- IT Help Desk support. Outsourcing first-line technical support for employees experiencing IT issues.
Let’s have a closer look at what IT services companies usually delegate to their vendors.
EXAMPLES OF FREQUENTLY OUTSOURCED IT SERVICES
About half of all IT services outsourced worldwide are software development services. This category includes web, mobile, and app development. Let’s examine them in more detail.
Software development
Outsourcing software development can be strategic, but navigating the process smoothly requires careful planning. Here’s a roadmap to guide you:
- Define your needs. Before diving in, clearly define the software you want to develop: its purpose, target audience, and functionalities.
- Choose an outsourcing partner. Research potential partners, considering factors like their expertise, experience in your industry, communication style, and cost structure.
- Clearly communicate your requirements. Provide your chosen partner with detailed documentation outlining your project goals, expectations, and timelines.
- Establish a development process. Collaborate with your partner to define the development methodology (e.g., Agile, Waterfall), communication channels, and project management tools.
- Quality assurance and testing. Integrate regular testing and quality checks throughout development to ensure the software meets your expectations.
- Deployment and maintenance. Plan for a smooth launch of your software and establish ongoing maintenance procedures with your outsourcing partner.
Web development
In 2024, a website is no longer a luxury – it’s essential. Statistics show that about 40% of people bounce from poorly designed websites. That means a bad website (or no website at all) can seriously hinder your business growth. Technical issues and a lack of user-friendliness can be deal breakers for potential customers.
But building a website can be a challenge. It takes time, resources, expertise, and often a dedicated team.
That’s where MWDN comes in. We specialize in crafting intuitive websites with clean code and SEO-optimized structures. We have the experience to handle ambitious projects, like the Better Chains website – a testament to our capabilities. We cooperated with this project for five years and used a combination of technologies like Android, iOS, PHP, and Angular to deliver a user-friendly experience with an attractive and clear design.
Application and mobile development
Did you know that 85% of smartphone time is spent on apps? No wonder mobile apps are a game-changer for modern businesses! These powerful tools can be built specifically for iOS or Android or across both platforms.
MWDN is your one-stop shop for mobile app development specialists. We find tech talent who can handle everything, from crafting a user-friendly prototype to launching your app on the App Store and Google Play. Our focus is on creating an exceptional user experience. Take Gett, for example – this native mobile app MWDNers developed for a leading corporate ground transportation platform boasts over 10 million downloads and a 4.2 rating on Google Play. It’s a testament to the power of user-centric app design.
Software testing
Testing is the cornerstone of great software development. It’s like a final exam for your product, ensuring it functions perfectly before reaching users. But who wants to spend hours manually testing everything? That’s where automated testing shines.
Automated testing leverages specialized tools and scripts to run tests without human intervention. This saves time and catches bugs efficiently. The best part? It compares the results to your exact requirements, ensuring your vision becomes reality.
Here’s the catch: finding the right tools can be tricky. In fact, 26% of companies struggle with that very challenge.
MWDN is here to bridge the gap. We hire QA engineers who offer comprehensive software testing services, including robust automated solutions. They ensure every function behaves flawlessly, delivering a product that’s 100% in line with your vision.
No matter the size or complexity of your project, MWDN has a vast pool of specialists to guarantee a flawless product. Let’s discuss how automated testing can take your development process to the next level!
Creative design
They say you never get a second chance to make a first impression, and that’s especially true online. According to studies, 94% of a user’s initial website impression is design-based. In other words, good design is essential for grabbing attention and winning over customers.
That’s why design is at the core of our strategy at MWDN. Our talented graphic and UI/UX designers specialize in crafting exceptional web and mobile application designs. We create user experiences that are not only visually stunning but also clear and functional. This ensures your website or app will stand out from the crowd and keep users engaged.
It’s not just about aesthetics, though. Take NicaS software, for example. This powerful medical software combines rich functionality with an impressive design. Complex medical data is presented in a clear and accessible format, empowering healthcare workers to make informed decisions quickly and easily.
R&D services
Companies across industries increasingly turn to R&D outsourcing to accelerate development, access specialized expertise, and optimize costs. But what does R&D outsourcing look like in 2024?
The pressure to bring products to market faster is more intense than ever. R&D outsourcing allows companies to tap into a global talent pool, enabling them to access cutting-edge technologies and expertise that might not be readily available in-house. This translates to faster development cycles and a quicker ROI.
Rising R&D costs are a constant concern for businesses. Outsourcing can help companies control these costs by leveraging a flexible talent pool and potentially lower labor rates in certain regions. This allows them to invest resources more strategically in core areas of their business.
Gone are the days of one-size-fits-all R&D outsourcing. Companies are increasingly seeking partners with deep expertise in specific industries or technologies. This targeted approach ensures a better understanding of the client’s needs and a more efficient development process.
Successful R&D outsourcing hinges on strong collaboration between the client company and the outsourcing partner. Clear communication, shared goals, and established workflows ensure a seamless project experience.
Fields we work in
It is always better to hire IT vendors who have hands-on experience in your specific field. Here are some of our favorite niches:
- Medical IT and healthcare
- FinTech
- GameDev
- Logistics and IoT
- Telecommunication
- Cybersecurity
Medical software development
In healthcare, where every detail counts, staying organized and efficient is crucial. Medical software steps in as your powerful ally, helping you to:
- Automate and streamline tasks. Say goodbye to tedious paperwork and repetitive processes. Medical software automates workflows, freeing up valuable time for patient care.
- Access patient information instantly. No more scrambling for charts. All your patients’ data is readily available at your fingertips, allowing for informed decisions and improved care coordination.
- Leverage the power of AI. Advanced software can analyze data and assist in diagnosis, leading to faster and more accurate treatment plans.
- Connect and collaborate. Streamlined communication between doctors, clinics, and patients fosters better teamwork and a more positive overall experience.
Implementing medical software requires a careful touch. The healthcare field has specific regulations, and solutions should cater to unique needs.
That’s where MWDN’s 20 years of experience comes in. We understand the complexities of healthcare IT and create user-friendly, effective software and web solutions for a wide range of medical professionals, from hospitals to private practices.
A shining example is NicaC CS, a non-invasive system monitoring patient health. This innovative tool, built with cutting-edge technology, has been successfully operating for over a year. It’s a testament to our ability to deliver solutions that make a real difference.
With MWDN tech specialists, you will be able to:
- Organize and manage patient records.
- Get real-time insights into patient conditions.
- Enhance diagnoses and improve communication within their teams.
FinTech
We also have completed staffing for several financial, banking, and tax projects. Staff augmentation for FinTech projects comes with its own set of nuances compared to traditional IT projects. Here’s a breakdown of some key peculiarities:
- Stricter regulations and compliance. The financial services industry is heavily regulated. Any staff you augment your team with must be familiar with relevant financial regulations and data security protocols. They’ll need to undergo additional training to ensure compliance.
- Domain expertise is critical. FinTech projects often involve complex financial processes and technologies. Augmented staff should have a strong understanding of FinTech, including areas like digital payments, blockchain, or cybersecurity specific to finance.
- Security clearance requirements. Depending on the project’s nature, augmented staff might need security clearances to access sensitive financial data. This adds an extra layer to the selection process.
- Communication and collaboration. FinTech projects often involve integrating new technologies with existing systems. Augmented staff must effectively communicate and collaborate with your internal team to ensure a smooth integration process.
- Focus on UX. FinTech applications need to be user-friendly and secure. When augmenting your team, consider the UX expertise of potential candidates to ensure the final product is intuitive and easy to navigate for end-users.
- Data sensitivity. FinTech projects often handle highly sensitive financial data. Augmented staff needs to be aware of data privacy regulations and best practices for data security to minimize risks.
The FinTech market is constantly evolving, which helps us keep up with innovations and stay up-to-date with the latest trends and technologies.
Logistics and IoT
The world of logistics is undergoing a significant transformation, driven by the increasing adoption of IoT. Imagine a network of interconnected devices – sensors, trackers, cameras – seamlessly collecting and sharing data to optimize every step of the supply chain. That’s the power of IoT in logistics.
We have learned it from cooperating with great companies like Pointer and Hi-G-Tek, who chose MWDN as their strategic partner in hiring and managing top specialists in IoT development.
WHY DO COMPANIES OUTSOURCE IT SERVICES?
The rise of remote work, driven partly by global events, has unlocked a surprising benefit: the ability to access valuable skills from anywhere in the world. This trend is fueling a surge in outsourcing, with many small businesses and large organizations building successful, long-term partnerships with outsourcing and staffing firms globally. In fact, 37% of small companies already outsource at least one core function, and global outsourcing spending comprised $731 billion in 2023.
Close talent gap
The US Bureau of Labor Statistics predicts that demand for developers, testers, and quality assurance professionals would increase by 22% between 2020 and 2030. According to a McKinsey survey, 87% of companies already have or anticipate having shortages in their IT teams in the near future. Outsourcing also helps cover the burgeoning need for talent in many countries. Opting for outsourcing the customer gets access to a wide pool of talents who have knowledge of the local market and can ensure the rapid growth of the product in this area.
Mitigate labor costs
The logical question is, why not engage specialists from your country once the need for developers arises? Well, not everyone can afford it. The priority of any business is savings. Outsource software development services are good options in this regard. Instead of adding local expertise with a higher rate to their teams, many businesses are looking abroad to acquire resources at lower rates. According to our internal observations this option saves businesses up to 60% on labor cost.
Ensure business continuity
In the turbulent conditions of the modern business environment, ensuring business continuity is another factor that prompts businesses to choose outsourcing. Economic conditions, government regulations, and competition change frequently. With a team that works all over the world, the business takes less risk.
IT outsourcing ensures uninterrupted work of the entire staff of specialists. That is, regardless of the time, day, calendar holidays, or weather conditions, the customer is guaranteed the services of a qualified specialist to solve the problems that have arisen.
Focus on the strategic aspect
Outsourcing eliminates the need to pay for mandatory social packages, sick leave, and vacations provide employees with jobs, conducts training, education, certifications, and much more. The transfer of IT infrastructure support functions to narrowly focused specialists significantly increases the efficiency of the enterprise as a whole. This allows concentrating on those areas in which the company specializes.
Get the most professional resources on the market
Outsourced providers are concerned about their image and involve in their teams the most professional engineers, recognized, certified specialists in the field of IT with extensive experience in all areas of this field. They also have a large stock of ready-made IT solutions accumulated over the years of work, which can be partially or fully reused. Such ready-made solutions will allow you to minimize material and intellectual costs and optimize the work process of your company as a whole.
What are other ways to delegate IT services apart from outsourcing?
While outsourcing is a popular choice for delegating IT services, it’s not the only option. Freelance platforms and staff augmentation companies are the alternative approaches to consider.
Freelancer platforms offer flexibility and expertise and can be very affordable. However, finding qualified freelancers can be time-consuming. Communication and project management can also be challenging. Check out reliable platforms like Upwork, Fiverr, or Toptal if you consider hiring freelancers for your project.
Staff augmentation brings on temporary, skilled IT professionals to bridge specific gaps in your in-house team. This is ideal for short-term projects or situations requiring specialized knowledge. Staff augmentation can help you easily adjust your team size as project needs evolve. Staff augmentation vendors handle recruitment, payroll, and other HR aspects, minimizing your administrative burden.
The best choice depends on the nature of your project. For well-defined, short-term tasks, utilize freelance platforms to find specialized skills quickly and cost-effectively. For ongoing needs or complex projects, consider staff augmentation to gain access to experienced professionals who can seamlessly integrate with your team.
How do you outsource IT services?
Growing a business takes the right ingredients, and often, that includes a helping hand. MWDN, a globally recognized leader in outsourcing and outstaffing, connects you with the best and brightest tech talent around the world.
Here’s why MWDN is your choice for top-tier tech professionals:
- Seasoned experts. We provide access to a pool of highly experienced developers, engineers, and other IT professionals across various specialties.
- Industry expertise. Our extensive experience spans several domains, including healthcare & medtech, telecom, travel & logistics, language learning, and more.
- The perfect fit. We offer the most flexible hiring approach in the market, allowing you to actively participate in the recruitment process and find the ideal candidate for your needs.
- Transparency and control. Maintain complete visibility and control over your project with clear communication channels throughout the entire process.
- Cost savings. Enjoy significantly reduced labor costs (up to 60%) without sacrificing quality.
MWDN boasts over 150 specialists across 20+ tech fields, with top talent in Israel, Ukraine, the USA, Canada, and other key destinations. Our expertise extends beyond just development, encompassing web and mobile design, R&D, and other relevant domains.
