Outsourcing Software Development

By: Segiy Sergienko, 5 Sep 2016
4 minutes

Reading Time: 4 minutes

At present time it is hard to imagine the IT businesses without outsourcing parts of their information technology functions, and follow-on costs savings. Outsourcing seems to be an effective and widespread option to reduce the costs for IT companies and according to the IT research and advisory company Gartner, global spending for IT outsourcing was projected to reach $287 billion in 2013. Taking into account the fact of annually growth in the IT market we can imagine the scale of the phenomenon.

The benefits of outsourcing seem obvious, touted by experts across numerous industries as the answer to cutting costs for business functions ranging from information technology to accounting, marketing, and human resources; it seems possible that you could run an entire company without ever hiring a single employee.

What is outsourcing?

Outsourcing refers to the way in which companies entrust the processes of their business functions to external vendors. IT outsourcing is a phrase used to describe the practice of seeking resources — or subcontracting – outside of an organizational structure for all or part of IT (Information Technology) functions. An organization would use IT outsourcing for functions ranging from infrastructure to software development, maintenance and support. For example, an enterprise might outsource its IT management because it is cheaper to contract a third party to do so than it would be to build its own in-house IT management team. Or a company might outsource all of its data storage needs because it does not want to buy and maintain its own data storage devices. Most large organizations only outsource a portion of any given IT function.

So what are the benefits of outsourcing for successful companies?

For many companies, reducing operating costs is a key goal of IT outsourcing, but not all companies realize such savings. One reason managers may not realize the expected gains from IT outsourcing is that they narrowly focus on only their IT costs. However, outsourcing IT can also help to reduce other expenses such as sales and general and administrative costs, which are often four to five times IT costs. When managers think of IT outsourcing as a mere substitute for internal IT investments, this narrow focus hides many potential cost benefits. We are pleased to summarize some of the most important benefits of outsourcing:

  • Reduce and control operating costs. When you outsource, you eliminate the costs associated with hiring an employee, such as management oversight, training, health insurance, employment taxes, retirement plans etc.
  • Improve company focus. It is neither practical, nor possible to be a jack of all trades. Outsourcing lets you focus on your core competencies while another company focuses on theirs.
  • Gain access to exceptional capabilities. Your return on investment is so much greater when you outsource information technology to a firm that specializes in the areas you need. Instead of just the knowledge of one person, you benefit from the collective experience of a team of IT professionals. Outsourced IT companies usually require their IT staff to have proper industry training and certifications as well.
  • Free internal resources for other purposes. You may have someone in your office that is pretty good with computers or accounting, but most likely these were not the jobs he or she was hired to do. If they are spending time taking care of these things, who is doing what they were hired to do? Outsourcing allows you to retain employees for their highest and best use, rather than wasting their time on things that may take them longer than someone who is trained in these specific areas.
  • Resources are not available internally. On the flip side, maybe you don’t have anyone in your company who can manage your IT needs, and hiring a new employee is not in the budget. Outsourcing can be a feasible alternative, both for the interim and for the long-term.
  • Maximize restructuring benefits. When you are restructuring your company to improve costs, quality, service, or speed, your non-core business functions may get pushed aside. They still need to be handled, however, and outsourcing is an optimal way to do this. Don’t sabotage your restructuring efforts by failing to keep up with non-core needs.
  • Functions that are difficult to manage or out of control. This is definitely a scenario when outsourcing to experts can make a big difference. But don’t make the mistake of thinking you can forget about the problem now that it’s being “handled.” You still need to be involved even after control is regained.
  • Make capital funds available. By outsourcing non-core business functions, you can spend your capital funds on items that are directly related to your product or your customers.
  • Reduce Risk. Keeping up with technology required to run your business is expensive and time consuming. Because professional outsourced IT providers work with multiple clients and need to keep up on industry best practices, they typically know what is right and what is not. This kind of knowledge and experience dramatically reduces your risk of implementing a costly wrong decision.

Why choose a ukrainian it outsourcing service provider?

According to the report been published by Ukrainian Hi-Tech Initiative, a leading association of Ukrainian software development and IT outsourcing companies, “Exploring Ukraine IT Outsourcing Industry” the volume of software development and IT outsourcing services Ukraine has provided has grown ten fold. The export volume of Ukraine’s software development industry reached at least $2.5 billion in 2015; the number 3 export sector. This is just a fraction of the country’s potential, taking into account its large and skilled workforce.

Messages to take home

Ukraine has the largest and fastest-growing number of IT professionals in Europe; it’s IT engineering workforce is expected to double to over 200,000 by 2020.

Ukrainian outsourcing companies offer a wide range of engineering capabilities, with most companies having already switched to agile development over the past few years.

The majority of local and international companies report that the country’s political turbulence has had no or little impact on existing business – but such factors are hampering growth.

The US market is the main destination for Ukrainian IT firms, with an estimated 80% volume of exported services.

The English proficiency level among IT professionals has grown significantly over the past few years, but remains lower than that of some other CEE countries.

How sirin software may be helpful for you?

Sirin Software provides a broad portfolio of commercial runtime tools, services, and support to enable the development of embedded software that span industry standards and application segments. We will design, develop, integrate and deploy full-cycle software systems for a large variety of embedded applications, as well as web and mobile solutions across different platforms. While developing software products we use modern best practices and proven technologies. We quickly and thoroughly complete all tasks set by our customers while exceeding expectations. Our finished products fully satisfy customer requirements while maintaining scalability for the broadening of system functions in the future.