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IT Outsourcing

As the lack of IT expertise and developers has become increasingly evident, the outsourcing of IT development has started to play an even more important role and become a competitive alternative to employing developers locally. Thanks to fast-growing competence within IT and development in a number of offshore countries, it is possible to find and engage developers and outsourcing companies that can often get started on a job both more quickly and at a reasonable price without compromising quality.

Ten Advantages of IT Outsourcing

  1. Cost control
    Outsourcing can convert IT costs into variable costs, enabling you to budget efficiently. In other words, you just pay for what you use when you need it.
  1. Reduce labour costs
    It can be very expensive to employ and train IT staff, and temporary employees do not always meet your expectations. Outsourcing allow you to focus your resources where you need them most.
  1. Access to expertise
    It is difficult to keep up all of the necessary IT competence inhouse. Make sure to supplement yourself with the expertise that your outsourcing partners have.
  1. Update your inhouse skills
    There are benefits to having regular new blood in an organisation for a second opinion on problems and challenges. Although your employees may be quite competent, there is a risk of eventually becoming blind to some of the problems in your own environment. It is stimulating for staff to have new influences from external parties.
  1. Increase efficiency and competitiveness
    Organisations that try to develop all of their IT services themselves often have higher development costs and a longer implementation time than an organisation that outsources certain parts.
  1. Quickly implement new technology
    An outsourced IT department often has the resources to start new projects immediately. It may take weeks or months to employ the right programmers, train them and give them the support they need when dealing with the same projects internally.
  1. Focus on your core business
    Companies have limited resources and each manager has limited time and attention. Outsourcing may help your company to stay focussed on your core business and not get distracted by complex IT decisions.
  1. Reduce risks
    There is a certain risk associated with any investment. Markets, competition, official provisions, financial conditions and technology change very quickly. Outsourcing providers assume and manage a lot of this risk for you, with specific industry knowledge, particularly as regards security and compliance. They are generally much better at deciding how to avoid risks in their areas of competence.
  2. Get a better gearing on your IT budget
    Most small companies cannot afford to match the internal support services maintained by larger companies. Outsourcing can help small companies to act ‘big’ by giving them access to similar technology and expertise as a large company.
  3. Security
    Have you checked whether your firewall has been updated? Do you have a DMZ installed? Do you audit your workstations and servers? Has your company implemented PCI security standards and worked to maintain these standards? The right partner can help you keep track of things of which you do not have full internal control.

Offshore Development vs. Nearshoring

There are several terms within IT outsourcing that it is good to be aware of. There is often talk of offshoring vs. nearshoring. Offshoring means that programmers or other resources are engaged further away from the company, often on a different continent. Nearshoring, on the other hand, means that these resources are located slightly closer, often on the same continent or in another part of the same country. Both options have their own specific advantages depending on different factors. Offshoring is commonly used for outsourced operations abroad, but in Europe it is common to talk about nearshoring in countries such as the Ukraine, Estonia, Latvia, Lithuania and Poland. Countries further afield, such as India, Pakistan and Vietnam, are often referred to as offshoring.

At Developers Shore we have chosen to hire developers and engage freelance programmers and partner companies from the Ukraine where we have our Head Office in Kiev. The Ukraine only has one hour’s time difference from Sweden and it only takes around two hours to fly there from Stockholm, which makes things easier. Find out more about why we work with the Ukraine.

Outsourcing vs. Outstaffing

There is a contentious issue within offshore software development regarding what is the best in terms of IT outsourcing and IT outstaffing, and the difference between them. In other words, what would be most efficient: engaging an external dedicated team abroad or ordering a complete development project from an outsourcing provider?

Let’s start by explaining the difference between outsourcing development and outstaffing programmers.

An outsourcing provider usually works with a project-based business model, which means that the customer often gets help with the entire project from start to delivery. The customers themselves rarely has access to the development team and people performing the work. Those participating in the project may be involved either full or part time, depending on the project’s needs and they may be working on several projects at the same time.

Outstaffing is a type of remote employment or staffing, where team members perform all of the tasks in close dialogue with the company (the customer) on a daily basis, but are officially employed by another company, an IT agency, outsourcing agency or recruitment company. The latter acts as an employer, and is responsible for salaries, equipment, HR issues, benefits, etc. while the customer primarily gives the

team members tasks and assignments. In practice, the goal is usually to be long-term employees and an extension of the local team. In summary, the biggest difference is that outsourcing relates to full project support, while outstaffing provides employment and maintenance for individuals.

Developers Shore is working not only on building long-term customer teams (outstaffing) but also on outsourcing projects together with a large partner network of the Ukraine’s best IT companies. In addition, Developers Shore operates one of the Ukraine’s primary agencies and networks of freelance developers who can work both full-time and part-time in the short and long term according to the customer’s needs.