In the past few years, the word “outsourcing” has become more and more popular. This concept is understood as a series of actions for the transfer of the selected processes by the company to an organization specializing in the field of these tasks. Outsourcing is characterized by long-term cooperation, in contrast to one-time services.
What is it outsourcing?
Outsourcing is an abbreviation for external – resource – using, which denotes a business strategy based on hiring an external service provider. The main goal is to reduce costs, but the idea is that if there is something that someone can do better than us, then it is worth taking advantage of it. IT outsourcing means the transfer of IT services to a specialized external company that is responsible for the efficient and, above all, the efficient functioning of the infrastructure.
Full outsourcing – Comprehensive IT outsourcing involves the creation of an external IT department, consisting of a team of specialists in various IT areas. This solution ensures maximum cost savings and constant access to professional service. An external IT department provides support, especially in critical situations that are critical in terms of business operations. A dedicated team proposes and implements innovative solutions that are responsible for the safety and reliability of the company’s infrastructure. Full IT outsourcing is a great alternative to a full-time IT professional who often lacks the skills to create a stable and efficient work environment.
Partial Outsourcing – Flexible IT service is a great solution for small, medium and public sector representatives looking to perform specific tasks. Partial outsourcing consists of servicing selected areas of the IT infrastructure, provided that the selected areas have some kind of autonomy. This enables selective but free management of servers, backups, local area network or standard support. The partial model will work for organizations that have their own or specialized IT solutions that, for various reasons, cannot be fully entrusted to an external company.
- reduction and stabilization of IT equipment maintenance costs,
- access to IT specialists,
- early warning of failures,
- quick response in case of failure,
- constant monitoring of the most important servers in your network,
- Fast assistance to your employees with day-to-day hardware and software problems.
- IT outsourcing, like any other solution, has its advantages and disadvantages.
It outsourcing – advantages
The management of a modern enterprise, regardless of its size, always requires the use of IT systems. Of course, the degree of development of the IT infrastructure depends on the size of the company, as well as the industry and the type of its activities, but the efficient and fast transfer of data electronically everywhere is the backbone of modern business. However, IT support requires the establishment of an internal IT department within the company of experienced IT professionals who will professionally oversee the hardware, systems, and software used. Such a department generates large and sometimes huge costs and is also housed in the company. Enterprises that are optimizing costs and want to focus on their core business can order IT outsourcing. What are the advantages of such a solution?
- Reduced IT support costs,
- Elimination of personnel problems,
- Saving time,
- Easier access to the latest technology,
- Experienced staff guaranteeing a high level of service.
It outsourcing – disadvantages of the solution
IT outsourcing also has disadvantages. Many people depend too much on an outside company. However, the main problem is the risk of starting cooperation with an unreliable company – this can even lead to leakage of confidential data. Therefore, it is worth choosing a company carefully for outsourcing.
Choosing an IT service provider is not an easy task. We highlight the most important aspects of this choice and offer support questions that you want to know the answer to before making a final decision.
If you are interested in establishing cooperation and want to better understand IT outsourcing, its advantages and disadvantages, we invite you to consult with our engineers for free. We will help you solve your problem and offer the best solution.
Why outsourcing became so popular?
The popularity of IT outsourcing is confirmed by the latest research in the computer economy. They say that the history of IT outsourcing has long roots. World-renowned companies choose this form of cooperation because of the opportunity to expand their capabilities with minimal investment, reduce costs and increase functionality.
The study also presents the following data for 2017 (based on an annual survey of US and Canadian IT organizations) according to which:
- 41% of organizations outsourced data center operations;
- 43% of companies use outsourcing to solve their IT security challenges;
- 53% of organizations outsourced application development (up to 56% in 2018).
IT security outsourcing is growing the fastest of all outsourced functions in terms of the percentage of outsourced work, with 48% of respondents reporting that they will increase the amount of security work they outsource. Undoubtedly, one of the most common outsourcing areas is application development. The frequency has increased slightly after a notable decline in 2016. Due to the low cost and service success of outsourcing application development. In 2019, 43% of surveyed organizations increased the share of outsourcing of this service, while 47% left the volume of work on application development at the same level.
Statistics also show that outsourcing services are preferred by companies regardless of size. According to Computer Economics, 57% of small / medium organizations and 53% of large organizations outsource their application development to external companies.
In addition, it is important that companies from different business areas choose outsourcing services. Manufacturing companies outsource application development at an above average rate, which is 63% of application development outsourcing. Financial services companies outsource application development with 60%. Medical service companies, with a 10% share, are the least likely to outsource application development.
The above data confirms the fact that outsourcing is a global business trend that allows you to increase the profitability of an enterprise.
Companies that have successfully used IT outsourcing include huge startups such as Basecamp, GitHub, Alibaba, Slack, and Skype. And this is not surprising, because according to the latest research, outsourcing can reduce costs by up to 60%. With the budget constraints typical of many young startups, these numbers can play a significant role.
How to choose outsourcing service – eastern europe, ukraine?
When we talk about quality IT outsourcing, we mean the transfer of the client’s information systems to us at iTizzi Custom Software Development Company for servicing (for example, software development, creation of websites or applications).
Around the world, these IT tasks are most often outsourced. Several countries have managed to become the largest providers of such services. For example, Asia and India have earned a reputation for being a cheap but substandard resource.
If you want to opt for IT outsourcing in India, according to Christophe Delsol, you may have to face a number of challenges. The most significant of these are time zone differences, low employee motivation, cultural differences, and poor quality of education.
Another notable problem is the little experience of most developers. According to the 2018 Stack Overflow Developer Survey, 78% of Indian developers have between 0 and 5 years of programming experience. While in the USA only 48% of specialists have similar experience, and in the whole world – up to 57%. Accordingly, most of the developers from India are at a low level. Another important fact: most Indian developers are willing to write code that they themselves consider unethical.
As you can see, IT outsourcing services in India have many disadvantages. Another promising region for outsourcing is Eastern Europe. At the moment, it is rapidly gaining popularity.
In Eastern Europe, the largest outsourcing countries are Poland, Czech Republic, Belarus and, of course, Ukraine. The latter is the leader in this region, and IT outsourcing brings the country more than $ 2.5 billion annually. More than 100 research and development centers of such world high-tech companies as Cisco, Oracle, Rakuten, Samsung operate in Ukraine.
According to the estimates of the IT Ukraine association, which unites outsourcing companies, the volume of Ukrainian software exports in 2017 increased from about $ 3 billion to $ 3.6 billion. And for the current year, the forecast is $ 4.5 billion. The industry is forecasting nearly double growth by 2025.
It outsourcing in ukraine: kiev, dnepr, lviv
In the face of intense competition between other countries of Eastern Europe, Ukraine benefits from a number of factors. Below is the most compelling list of them.
Strong fundamental European education
There are 402 universities and colleges in Ukraine. More than 36,000 technicians graduate annually. Three quarters of Ukrainian IT infrastructure representatives have higher education.
European culture without a language barrier
Ukraine is a multicultural democratic country that is actively moving along the path of European integration. Therefore, the study of English is mandatory in most schools and universities in the country. According to a 2018 study, 34% of IT specialists in Ukraine speak English at the Intermediate level, 33% – Upper-Intermediate, 12% of respondents have the Advanced level.
Focus on R&D
According to our data, there are over 1000 IT companies and 2000+ startups in Ukraine. Many world famous software campaigns originated in Ukraine: Jooble, DepositPhotos, TemplateMonster, GitLab, PetCube, Mobalytics, Preply, Attendify, CleanMyMac, Grammarly, InvisibleCRM, Looksery (acquired by Snapchat in 2015) and Readdle.
The best ratio of price and quality
The result of the excellent quality of training is high-quality code, satisfactory work of the development teams and a high percentage of successfully completed projects.
The popularity of Ukrainian outsourcing was due to the ratio of low prices and quality work. Hourly development costs averaged $ 95 in New York, and up to $ 109 in San Francisco. An hour of work for a Ukrainian developer varies from $ 25 to $ 49, depending on the technology required by the customer and the experience of the programmer. This is several times lower than the indicators of any European country.
It is also worth paying attention to the fact that if the key indicator when choosing a contractor for you is the price, that is, regions with very low hourly wages (up to $ 10). Unfortunately, this price is guaranteed to mean extremely poor quality code. The low cost of outsourcing can mean slow development speed and lead to additional costs in the form of bug fixes.
The number of transactions in Ukraine is growing every year. Compliance with GDPR and information security has become the main trend in the direction of development for the vast majority of Ukrainian IT companies. This is confirmed by the dynamic growth in sales of Ukrainian IT outsourcing.
Dominance of service-oriented business
44% of Ukrainian IT companies use outsourcing. 10% specialize in outstaffing. This characterizes the country as a service-oriented region. An important fact is that most outsourcing companies, including iTizzi Custom Software Development Company, are now positioning themselves as customer-centric products. Thus, they make every effort not only in the development, but also do everything to help the client make money.
As you know, the most productive employee is the one who participates in the project and is completely satisfied with his work. According to a survey by DOU, one of the most popular portals of Ukrainian programmers, the overwhelming majority of developers like their work.
At the same time, almost 30% of the surveyed developers and testers have work experience from 3 to 5 years. Professionals with such work experience are in the middle category. Those with work experience of 6-10 years are top-level specialists.
Unlike India or China, outsourcing in Ukraine, Vinnitsa, Odessa is not an obvious option. Since the country’s population is relatively small, Ukraine is practically invisible on the technological map of the world. However, many large tech startups are actively choosing developers from this country. The reason is a high level of education and good training. Due to low competition, the cost of rates for Ukrainian developers is still very low, despite the high quality of the services provided. Companies that have conducted a detailed study and comparison of the pros and cons of outsourcing in different countries have already made their choice in favor of software development in Ukraine, at iTizzi Custom Software Development Company.
The team is aimed for result:
We are dedicated to delivering the best possible results to meet your business goals.
Fast resource distribution:
Our company invests heavily in training to have a development team dedicated to enhancing their technical and business knowledge. Resources may be allocated for a new project soon.
No hidden costs:
No additional fees or charges. Everything is spelled out in the contract.
Dedicated development team
Scale your team however you want and work with professionals.
Our technical stack is constantly growing. It currently includes languages and tools suitable for enterprise grade software and MVPs.
Delivery on time:
We provide reasonable estimates and set realistic deadlines based on previous experience.
Integrated business process:
Structured Workflow + Defined Team Roles + Performance Analytics = Maximum Risk Reduction.
We are pleased to stimulate the growth of our partners, which leads to our own growth. This is why we design each product as our own. To deliver high-level solutions, we combine our team’s knowledge, methods and skills based on key principles:
- HIGH QUALITY. We provide a first-class software development experience that empowers our customers rather than providing a cheap replacement for full-time employees.
- BUSINESS RELIABILITY. Transparency, honesty, protection and security of intellectual property rights are at the core of our customer relationship strategy.
- EDUCATION. We accumulate the necessary experience and knowledge in the subject area to create a synergy between technology and business.
- CONTINUOUS COMMUNICATION. Fluency in English is a must, we respect our partners’ time zones and are always ready to arrange for team members to travel.
- PARTICIPATION. Our top priority is to deliver results that allow your business to grow and scale.
- WE HAVE A SOFTWARE QUALITY MANAGEMENT SYSTEM. Delivery quality is an important part of our cooperation with clients. ITizzi has implemented a policy to ensure that the customer is provided with a product that meets their requirements.
- LOVE FOR CODING. Our specialists live, breathe and dream of technology. We not only help customers create new products, but also create a community of innovators who strive to change the world for the better with every line of code.
- OUR PARTNERSHIP goes beyond technology. We are deeply involved in the daily life of our clients. And we’re always ready to go the extra mile to develop the best product in your niche.
DO YOU HAVE A BRILLIANT IDEA FOR BUSINESS DEVELOPMENT?
LET’S DISCUSS YOUR PROJECT!
Development & Creation of Startups
Build your startup from scratch - complex projects. Modern design. A revolutionary code technology that makes application development fast and affordable. Dedicated PM. Full stack approach. Streamlined process.
AI & Machine Learning Development
We strive to be at the cutting-edge of machine learning on code. We can take your app to the next level with the latest state-of-the-art solutions.
Blockchain & Cryptocurrency Development
If you’re looking for someone to help you launch your DApp, Exchange or Wallet or to provide Smart Contract development, R&D or consultancy - this is our domain.
Custom Software & Web Development
Set your business apart from the competition. Our developers and operating teams work together to provide you with a highly accessible and reliable infrastructure and thus speed up the delivery of your product.
Mobile App Dev. for iOs & Android
Smartphones, tablets, wearables - follow your users where they are with carefully crafted mobile apps. Reach customers via Android, iOS, or cross-platform solutions. Software design and development.
FinTech. Digital Marketing
As an experienced company in the field of digital transformation, we help companies improve software, web services, implement intelligent management tools and use analytics data to be more efficient.