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3 Common Misconceptions About IT Outsourcing

3 Common Misconceptions About IT Outsourcing

Outsourcing has become a common practice in the IT industry due to the numerous benefits that it brings. However, there are still some companies that hesitate to hire an outsourced development team due to the common misconceptions about IT outsourcing.

In this article, we will review the biggest misconceptions about outsourcing and will explain why they are incorrect.

Myth #1: Outsourcing is too expensive

Probably the most popular myth about IT outsourcing is that it’s too expensive. This misconception often prevents companies from partnering with outsourcing providers. But as a result, companies might end up paying even more. How does it work? Let’s have a look.

First, when you hire an outsourcing company, you get a team of qualified and experienced professionals who do not require any training. Nor do they require any additional spendings such as vacations, sick leaves, etc. However, if you choose to assemble an in-house development team, you will have to pay not only their salaries but all additional expenses. As well, the in-house team might require training since your developers may not be familiar with the needed technology. As a result, you will spend more time and money on hiring and training an in-house team instead of hiring professionals who can do the needed work in a short period of time.

Second, the hourly rates of an international outsourcing company can be much lower than the hourly rates of your local developers. In this way, you can receive high quality without overpaying for it.

Myth #2: Outsourcing is for big companies only

This point can be related to the one above. When considering outsourcing, many small or middle-sized companies think that outsourcing is suitable for big companies only due to high costs and scope of work. That’s not true at all.

Today, there is a huge variety of outsourcing companies to choose from, be it a one-stop provider or a development agency that focuses on one or two technologies only. It is possible to find a suitable outsourcing company for the project of any size and complexity. As well, you can find a company that specializes in the needed technology or has experience with projects similar to yours.

And, as stated above, outsourcing is not as expensive as many people believe it is. Thus, it makes sense to estimate the costs and see which option (outsourcing or in-house) will be more beneficial for you.

Myth #3: Outsourcing implies the loss of control

Another common misconception about hiring an outsourcing IT company is the loss of control that you will face once you handle the project to the third-party providers.

There are, of course, certain risks that you might encounter when working with a third-party company. However, you can successfully avoid them if you follow certain rules:

  • Prepare the documentation that describes in detail the management of sensitive information and access to it. 
  • Prepare the documentation that states your intellectual property and the conditions on which the third-party company might use or manage it.
  • Negotiate and document the allocation of roles, levels of responsibility, and planned deadline. 
  • Negotiate and document planned deliverables and deadlines.

If there is a project aspect that you worry about, it’s best to write it down in the contract. In this way, you will be legally protected from a number of risks.

As for the control over the project, outsourcing companies usually offer great flexibility in terms of communication and project monitoring. The common practices are regular meetings and calls and regular reporting on the project status and the tasks. By establishing regular communication with the team, the client can rest assured that the project is carried out as intended.

What else you need to know about outsourcing

In addition to the above-mentioned misconceptions, there are other issues related to outsourcing that have to be considered.

First, there are certain pitfalls associated with outsourcing and they include the difference between the time zones, possible communication issues, risk of low code quality, and others. Note that such issues arise due to the lack of research from the client’s side and incompetence from the side of the outsourcing company. In order to avoid them and mitigate the risks, one has to set strict search criteria and ensure that the selected company fully corresponds to the quality standards.

Second, there are certain costs in outsourcing that many clients are not aware of. When choosing an outsourcing company, the client might consider the possible costs of software developers and QA engineers - but there are also business analysts and project managers, for example. As well, every new implementation and product updates will add to the overall cost too.

Thus, when planning the budget for the project, it is important to consider all possible spendings. To ensure that you did not miss anything, it’s best to discuss the project with the team’s manager and discuss all possible spendings and possible budget allocation.

Conclusion

Outsourcing is a great practice as it provides clients with:

  • Wide choice of experienced professionals: you can choose the exact specialist that your own team might lack, 
  • Flexibility in development: the team will adjust to your needs and will adapt the development process to the changing requirements,
  • Low cost: outsourcing is very cost-saving,
  • High quality: outsourcing companies usually specialize in a certain area so you will partner with experienced professionals.

Thus, if you approach outsourcing wisely, conduct thorough research, and invest time and effort into communication and negotiation, you will successfully mitigate the biggest risks associated with outsourcing and will receive a high-quality product within the needed time frame.

Got any questions left about outsourcing? Contact us and we will gladly walk you through the process of working with a certified outsourcing company.