Reasons For Outsourcing

Based on our experience, we have comprised a list of specific business objectives to pass some the project to an external service provider; and a number of reasons for an international collaboration.

Factors to change in-house software development for IT Outsourcing.

  • IT department restructuring. For particular activities there may be no responsible persons assigned; or there may be no person in-house, that is suitable for such role. Such activities can be outsourced – therefore, structure of IT department will be more rational and optimal, all the duties will be strictly assigned; 
  • Software- and Hardware cost reduction. The company can essentially cut costs spent on software and hardware updates; as well as other costs for infrastructure and facilities – these costs are beared by service provider; 
  • Retention of skilled workforce. This could be an issue when performing IT activities internally. First, salary increase can cause dissatisfaction for other workers. Second, experts need space for professional growth – which is also not always possible. Outsourcing frees from retention problems; 
  • Experience of outsourcing partner. Service provider already has experience with similar projects, this experience can be put to use.

Reasons for international outsourcing instead of regional outsourcing.

  • International expansion. Offshore/nearshore outsourcing could be a great idea for a first step to international market. Outsourcing partner can first help with the development of new product, and then also with marketing and sales. He can use his knowledge of language and his country to develop effective marketing strategy;
  • Time difference. One can use the time shift – for example, to perform software development and testing in terms;
  • International experience of outsourcing partner. Service provider has already gained valuable experience with partners worldwide; 
  • Useful expert knowledge for managing staff. Qualification of management is increased through the international outsourcing negotiations.

This is a base for an outsourcing strategy. However, every leader has his specific reasons to enter into outsourcing relationships. Not only considering current situation is essential, it is also important to specify the project scope, budget and deadline, and select an appropriate service provider.

 
 

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