In the fast-paced world of business technology, IT staff augmentation services have become a smart move. Among the many options, software outsourcing shines. It brings specialized skills, cost savings, and innovation. This article explores why outsourcing, especially for software, is a game-changer for businesses aiming for digital transformation.
The Importance of IT Services
Information technology (IT) services are the services that small and big enterprises rely on to handle all the software and hardware they need for managing their data and daily operations efficiently. These services include cloud, network security, software development, SaaS, data storage and analysis, troubleshooting, and technical support.
As digital technology becomes the mainstay of every industry that wants to scale and improve customer experience, IT professionals have become in demand. In fact, studies show that the need for IT professionals still exceeds the supply. Suppose a business or organization do not have an IT department or has one that is overloaded. In that case, it must have external teams to fill the expertise gap and ensure its technology infrastructure remains up-to-date and secure.
Today, getting specialized IT services like custom software solutions has become the top choice for businesses that want to scale up or down, meet regulatory standards and stay ahead of the competition. According to the US Bureau of Labour Statistics, the demand for software developers will rise by 25% from 2021 to 2031, much faster than any other job. There will be more than 150,000 openings for software developers during that time. This further highlights the importance of IT services for today’s business environment.
In general, it is hard not to find a business that will not need IT experts to update their computer systems, create websites that work well for marketing or SEO efforts, build custom apps that provide tailored solutions, maintain security measures to protect sensitive data, establish efficient connections with remote branches or clients and do many other things too.
IT Outsourcing Statistics and Trends
Getting IT services from outside experts is called Information Technology Outsourcing (ITO). Big companies such as Google, Apple, and Facebook have been seen to engage external experts to enhance their workforce.
As remote work reshapes traditional work environments, Information Technology Outsourcing has become even more accessible, convenient, and flexible, allowing small and big companies to tap into external expertise without geographical constraints. The world of outsourcing is mostly IT-centric, as it makes up 72% of all global outsourcing contract values.
Perhaps what makes IT outsourcing a growing industry is the shortage of software engineers in developed countries. Some countries, like the UK, have tried to bridge the gap by offering tech visa opportunities to international professionals. But that’s just a partial solution. Technology’s complex and evolving nature requires ongoing expertise and support that can be efficiently provided through IT staffing agencies. With IT staffing agencies, no need to spend on rent or employee training. It’s cost-efficient. As such, 41% of organizations have plans to increase their spending on software outsourcing.
Benefits of Outsourced IT Services
Although the shortage of local talent was a major reason businesses outsource software development offshore, its cost advantage has made it a sustainable option for businesses that want to remain competitive and fortify their market presence. When Deloitte asked respondents why they outsource software development to offshore companies, 70% cited saving up costs as the primary decision driver.
Lower Labor Cost
Businesses and even IT staffing agencies can tap into a global talent pool and source skilled software developers from regions where the cost of living and wages are comparatively lower. For instance, it’s common for software developers based in countries such as India, Ukraine, Poland, and Nigeria to have lower salaries than their counterparts in countries like the United States and the United Kingdom.
There’s also a cost advantage in hiring for only a fraction of the time required to get things done. In addition, outsourcing grants you the flexibility to grow or shrink your team as your workload fluctuates–more hires at peak times and fewer at low-demand periods. This adaptability gives you the optimal workforce size to manage varying workloads and maximize efficiency and resource allocation.
Save Operational Expenses
Fixed costs are higher when you hire permanent software developers, mainly if you’re located in a developed country with high living standards and wages. Instead of establishing an internal team with niche skill sets, companies go for software outsourcing to reduce operational costs, such as:
- Recruitment and Training: You’re not obliged to engage in the entire hiring process, and there’s no necessity to develop training programs for outsourced staff.
- Retaining specialized staff: Permanent employees come with ongoing retention costs. However, outsourcing will give access to technical skills when needed without incurring long-term retention expenses.
- IT system maintenance: Outsourcing shifts the responsibility of maintaining IT systems to service providers, reducing in-house maintenance costs.
- Hardware and software licenses: Outsourced projects often come with the necessary tools and licenses, eliminating the need for additional purchases.
Save Project Time Costs
Outsourcing companies or IT staffing agencies have a track record of improving time to market. That’s why companies turn to them when internal team resources are stretched thin or when project deadlines are tight. For example, when IT staffing agencies hire software developers from countries with different time zone, there’s an opportunity to cover more working hours in a single day.
During off-hours, teams from another time zone can complement your internal team. The global team can pick up where yours left off, move forward, and provide a new progress report when you return to work in the morning.
Summary
All said, make the time to research potential IT staffing agencies or tech outsourcing partners that can identify your true development need. Analyze diverse vendors, discuss contractual terms, and try to attain maximum benefits for your company.
