IT outsourcing is the practice of hiring specialists who are not officially employed by the company to complete specific IT projects. It has become very popular since it allows maintaining high-quality work while cutting costs significantly. Certain types of IT services operate mostly as outsourced, for example, data storage services.
Buying and maintaining data storage facilities and devices cost a lot of money, so the general practice suggests contracting a third party for this purpose. IT outsourcing allows companies to grow without taking major risks or making huge investments.
There are several types of outsourcing, which are offshoring, nearshoring and onshoring, that all have one thing in common – a third party performs certain business tasks for the client. The main difference between those types lies in the location of the third party whose services the organization intends to use. It can be either a local company or the one that operates internationally.
The Benefits of Outsourcing and Its Main Trends
IT outsourcing companies provide a variety of services which are essential for the companies’ growth and development. However, these are not the main benefits of IT outsourcing for the recipient of services. Here are the main advantages of hiring a third-party IT service provider.
The burden of expenses can affect even the brightest ideas that could potentially contribute to the world’s technological development. However, IT outsourcing allows cutting costs by hiring third-party vendors or outsourcing to countries with lower production costs.
Even though an organization may not be that big, IT outsourcing opens its access to the global talent pool. It can hire the brightest minds and the best professionals who are located internationally without spending extra costs.
IT outsourcing allows companies to operate more effectively without spending their time on selecting, interviewing, hiring or training new employees. These activities could be very time consuming, while an outsourcing vendor can complete the assigned tasks in a short period.
Time savings resulted from outsourcing activity allow the companies to reach out to new and potential clients faster and take new projects. Thus, the company’s turnover grows while third-party vendors provide high-quality products.
International outsourcing, namely offshoring, allows the client company to operate around the clock which, in turn, enhances its productivity.
The disadvantages of outsourcing are comparatively minor compared to its benefits. IT outsourcing companies often face troubles with the time difference, language barriers, different work habits and long travel distances that can be handled with the right work planning and organization.
Thus, being so popular and demanded, IT outsourcing has become an integral part of IT work process in companies across the globe. The outsourcing industry grows so fast that it is even hard to predict the upcoming changes.
Top IT Outsourcing Trends for 2019
We have collected several main trends that we believe will continue to dominate the industry in 2019.
Changes in the relationship between a client and an IT service provider
The focus will be shifted from price to process and people management. Cost reduction will still be an important factor for outsourcing, but the value delivered will be evaluated based on several components, including effectiveness and relationship building.
Multiple IT outsourcing providers
Companies will continue to enjoy a great supply of talented and professional third-party vendors and may use the services of several of them at a time. The trend that started in 2017 will continue to prevail, with the majority of businesses being interested in outsourcing their services to multiple vendors.
Alternative IT outsourcing destinations
India and China used to be the primary destinations of outsourcing for around a decade, but things change. Some countries in Central and Eastern Europe, including Ukraine, Belarus, Poland, and Romania, provide stiff competition to well-known destinations.
Innovative contract models
Clients and IT service providers are interested in changes that would stimulate their growth. New contracting forms allow for changing the format of business relations and help them make IT outsourcing more value-driven.
Outsourcing to the core
Businesses have started outsourcing their internal business processes and core business services to their vendors. As a part of the strategy, this allows for greater business growth and risks minimization.
Currently, most businesses are busy with migrating to cloud, and this provides an extra opportunity for data storage IT outsourcing services. Maintaining servers is expensive, so cloud outsourcing is growing in demand.
Why outsource to Ukraine?
Ukraine has been growing its IT outsourcing sector for around 20 years and earned a reputation for powerful software development, IT consulting and QA testing hub. Many companies that risked outsourcing to Ukraine in the 90s soon realized that they gained access to the pool of the world’s best engineers working at fairly cheap rates.
Many giant companies like Cisco, Oracle, and Samsung soon understood the potential of the Ukrainian labor market and opened their R&D centers there. Such IT outsourcing companies as Gravum have proved their competence in the most difficult IT projects. They offer their assistance along the entire product development lifecycle, providing a high degree of quality and effectiveness.
Today, the political and economic situation in Ukraine still impose certain risks. However, all of them are manageable and reducible. The education system in Ukraine is quite good, with its focus being slowly shifting to IT and technological programs.
It has always been cultivating math and engineering knowledge among other degrees, preparing thousands of talented professionals each year. Ukrainian IT specialists are great problem solvers who would do whatever it takes to present an impeccable product while working independently from other teams abroad.
IT outsourcing is itself the biggest trend in the global IT industry. Companies worldwide seek ways to outperform their competitors while adding uniqueness to their products. Outsourcing as a phenomenon continuously transforms and modifies, becoming an independent force that drives progress in the IT environment.
Moreover, the main destinations of outsourcing change, providing an opportunity for innovation and creativity. For example, Ukraine and other countries in Eastern Europe have already prepared two generations of highly talented professionals ready to complete any task at a moderate price rate. Their talent pool is ready to bring together their expertise in technology, user experience, and creativity to benefit your company.