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18th November 2018

Software Development Outsourcing

Days, when companies could only hire tech experts from the same area, are past a long time ago. Today – thanks to all the technology and the internet, you choose from any tech expert around the world. Outsourcing has probably affected every possible industry today, but the most it has revolutionized the IT sector – in 2018 around 31% of all IT services are being outsourced. Developers in Silicon Valley are much more expensive to hire, so outsourcing might save your money significantly. And now companies are not only hiring remote developers, but they also hire entire dedicated teams and work with them remotely.

But other than saving money, what reasons might there be for outsourcing some or all of the company’s IT functions?  Among the main reasons for that is focusing on strategic business planning and leaving development to the experts. Also, in order to solve capacity problems, facilitate service quality and bring innovation.

Are there any IT spheres that are particularly attractive for outsourcing other than software development (64%)? According to Statista, software application maintenance (51%), data centers (40%), IT infrastructure (32%), and service/help desk (32%) are among them. There is also a growing demand for Business Process Outsourcing and Knowledge Process Outsourcing. Since more and more businesses every day set priorities in order not to waste their time and resources and focus on core business instead, a number of business areas such as customer service, accounting, call-centers, etc. become more and more outsourced.

Today a lot of non-tech companies are setting standards and aiming towards process optimization and innovation. Companies from industries like Finance, Recruiting, Real Estate, Healthcare, Legal and Media are now inclined to outsource software development as they find it more cost-effective than hiring an entire developing team full-time.

Automation as a growing tendency of the modern world has a huge impact on everything and outsourcing is not an exception. And what influence is it going to have on developing countries that are known to be centers for outsourcing? Will using cloud-based automation solutions exterminate outsourcing in the long-term? A.T. Kearney’s 2017 report ‘The Widening Impact of Automation’ claims that while some outsourced positions will be inevitably annihilated by automation, this phenomenon will eventually lead to uprise of new jobs demanding new skills and talent. According to statistics, every four jobs, replaced by automation, lead to one new management position. Artificial Intelligence, predictive analytics, deep learning, and robotic process automation obviously has the ability to implement and manage the data it merges. But the market will always have demand for talents capable of programming and processing solution, as well as making important business decisions.

There is no denying, that outsourcing has always been used as a cost-saving tool. Companies that choose to outsource save significant amounts of money because they don’t need to rent expensive offices, pay salaries, benefits, etc. But there is an underrated asset, that outsourcing grants you with, and it is extremely valuable. It is the time that you save and you can spend it on innovating, improving and growing your business.