What are the types of IT Outsourcing?
When we talk about outsourcing it is a wide term and there are few types depending upon the location of the company who has chosen a service provider to work with –
Offshore IT Outsourcing
IT companies have created offshoring as a cutting-edge industry by providing solutions for aligning market products and offering IT companies the capability of achieving advanced technologies.
As for the meaning of “Offshore Outsourcing” is concerned, it means outsourcing to far-off countries. IT companies located in distant locations or continents are being accessed for use of their consulting services to provide business solutions.
The cost and availability of IT companies with business solutions are some of the most important elements in offshore outsourcing. Offshoring is sometimes neglected because of concerns related to trust and stability.
Nearshore Outsourcing
Services companies are accessing outsourcing companies for the best enterprise solutions. The nation which is adjacent or closest to the business establishment is the nearshore outsourcing model.
Businesses generally prefer nearshore consulting companies because they have services near them and also outsource software developers that can communicate in the same language and also costs incurred for development are reduced.
Visiting offices is easier for the services provider as well as the company. But companies prefer nearshore outsourcing as their travel expense is reduced and good business relations can be entrusted.
Onshore Outsourcing
Onshore outsourcing is where the service provider can cater to the business requirements of a client’s company on their location.
This paradigm has resulted in a certain time constraint for IT outsourcing . In comparison to other types of outsourcing, the cost of big data consulting is reduced.
In this type of business development, the company gets limited to a particular location and also has a limited outsourcing partner
Other Types of IT Outsourcing Services
Multi-Sourcing
It is another way of integrating resources that are being outsourced. It’s a combination of IT companies with different services companies. Clients can outsource to many companies.
Outsourcing companies work on a strategy that has access to the latest technologies and has transparency in their working models.
Co-Sourcing
It is the form of outsourcing where the agreement is done between a group of companies with one service provider.
The co-sourcing business does not give complete responsibility to the third-party service provider.
Process Specific Outsourcing
This type of outsourcing is dependent on a process where any complex process is there and can generate high profits.
IT services companies prefer such services to become a leader in any one specific field.
Business Process Outsourcing
When an organization employs a third-party service provider for handling their business functions. Business Process Outsourcing (BPO) functions as per the third-party requirements.
Generally, this type of outsourcing is done for front office operations and backend services. This type of service offers business expansion with higher efficiency and more profitability of the business. The company works as per business model efficiency.
IT Outsourcing
IT Outsourcing is a process wherein a company can get benefits from the best IT services company without making any investment in hiring, training, or development.
Service provided by the IT companies can differ as per the need. App development and custom software development is used for IT outsourcing services. information technology services offer in-house development with core services related to software development services.
Project Outsourcing
Project management tasks are outsourced to service providers by clients with project outsourcing.
It can start from any phase of the project and can easily finish as a project management function. Such outsourcing also works on an assignment basis.
How much does it cost to outsource IT projects in India?
For outsourcing IT projects, India has become the first choice. The Cost of IT outsourcing in India varies from $15000 to $80000 depending upon the choice of developers.
The cost of outsourcing is less in India in comparison to other countries like the US and Europe. In India, developers are available at the rates of almost $200 to $250. Whereas, a developer in the Philippines might charge $30 to $150 per hour.
IT Outsourcing cost comparison
| S# |
IT Services |
India |
UK |
USA |
UAE |
| 1 |
Mobile App Development |
$20-$30
Per hour |
$65-$100
Per hour |
$100-$150
Per Hour |
$40-$60
Per Hour |
| 2 |
Web Development |
$400-$600
Per web design |
$1000 – $2000
Per web design |
$2000 – $3000
Per web Design |
$600 – $900
Per Web Design |
| 3 |
Software Development |
$30 – $50
Per Hour |
$80 – $100
Per Hour |
$100 – $150
Per Hour |
$50 – $80
Per Hour |
| 4 |
Game Development |
$19 – $40
Per Hour |
$80 – $120
Per Hour |
$100 – $150
Per Hour |
$50 – $90
Per Hour |
| 5 |
eCommerce Development |
$80 – $120
Per Web Design |
$150 – $180
Per Web Design |
$130 to $200
Per Web Design |
$120 – $150
Per Web Design |
| 6 |
Cloud Computing |
$80 – $100 |
$150 – $200 |
$200 – $250 |
$100 – $160 |
What is the salary of IT developers in India?
In India, the average salary of developers is $30-$40 per hour.
There are different models to choose from for outsourcing web development, app development, software development, and many more
Indian companies have their in-house development team to provide less costs to clients. The world’s best CMM level 5 companies are based in India. Not just India is home to many ISO-9000 certified companies like The NineHertz, Tata consultancy services, HCL Technologies, Wipro, Tech Mahindra, and many more.
What are the best practices for IT and software outsourcing?
The Information Technology outsourcing industry is growing rapidly around the world.
With increasing market competition and modern consulting services, Outsourcing has become more than just a cost-effective solution.
Companies in India are working with information technology with professional partnerships and have effective and transparent management and a top-rated development team.
Below mentioned are best practices for collaborating when outsourcing –
Practice due diligence
One must always make an informed choice when it comes to outsourcing. This means that you must have due diligence. Reading reviews, taking recommendations, and assessing the technical profile of an information technology company is a must.
Checking out the hiring process and knowing about the staff assigned to your project should also be done.
The client must make sure that the hired team is capable of getting their work done.
Security
Information technology services companies must ensure a secure network for their clients. The safety of client data and intellectual property is a considerable factor.
To know about the company’s cyber-vigilance clients must look at their safeguarding measures and information technology networks.
Your chosen software development company should have active monitoring tools, code testing, and a proper security management outsourcing partner.
Two-way Communication
The client should have active communication with an outsourcing company. Communication helps in aligning efforts and building a strong alliance.
Sharing your vision with an information technology services company will make them understand your business goals better and keep the team motivated.
When communication happens frequently all the parties engaged get motivated and things become clear.
Using phone and video calls with an outsourcing company can be done to tackle issues promptly.
Defined Project Scope and Schedule
Project requirements must be kept upfront. Service providers need accurate and complete information to present and get a quote of a good fixed price.
Vendors must get information that needs to be delivered and in the way which work has to be done.
The client must be clear about scheduled requirements and such requirements have a huge impact on project costs.
Selecting Industry and Domain experts
Make sure that your hired information technology services company is carrying specific experience as per your project experience.
Software company’s must-have such experience, especially when outsourcing complex software development projects.
Price Specification
Outsource buyers always evaluate between the highest bid and lowest bid. According to buyers, most successful projects are the ones where they are offered with good value and quality results.
Involvement and Commitment to the process
Outsourcing does not mean that the project is out of your hands while the software company is working on it. The process of development requires the involvement of stakeholders from the national stock exchange to give their input and help in making timely decisions.
The main obstacle that is faced by any IT firm is a delay caused usually from the client side in project advancement. So to ensure business growth clients must appoint a key person to handle all issues related to digital strategy and risk management.
What are the future trends in software outsourcing?
In 2022 and years to follow software outsourcing will continue to grow. And there will be new emerging trends in the future.
Below mentioned are a few future trends that can be expected to affect all the computer software companies in 2022 and afterward as well.
Increase in demand for Skilled Engineers
The demand for skilled engineers is expected to increase in 2022 and in the future as well. If we talk about employment there are almost one million unfilled tech jobs in the US alone.
Outsourcing companies are in a strong position because they already have large pools of engineers experts working for outsourcing.
The demand for engineers has increased amidst the Covid-19 Pandemic. Information technology companies in India are increasing their supply of engineers to meet demands.
Increase in Cloud-based services
Cloud services have been rising throughout the years, and if market trends are to be believed this will increase. The software outsourcing trend is due to cloud solutions that have many benefits such as increased scalability, speed, security, and lower costs.
With the increase in cloud services, more companies are moving towards a cloud-native development model. This has to lead to cost reduction in the long term.
High Demand for Data Science and Analytics
Software development services companies are beginning to emerge with their focus on big data and analytics, which means that this trend will continue to increase in the next five years.
Companies are offering outsourcing with artificial intelligence and machine learning. Information technology services companies are rising which means their demand for outsourcing is increasing.
The rise in DevOps and Agile Practices
More Information technology services companies are beginning to implement DevOps and agile software development into organizations which involve moving fast with small teams.
There is an increase in collaboration and communication between teams to create a more flexible development process.
To Utilize Time Zone difference
Companies in USA, UK, Europe, Australia, etc. can use the leverage of time zones that they have in India for more work
They can utilize four to eight hours of time difference to get work done round the clock.
Overlapping of time can be utilized for project discussion and reported working of projects.
Companies can have development teams working all the time.
What are the benefits of outsourcing IT services from India?
Outsourcing is one of the most beneficial business decisions across the globe, Outsourcing has lowered development costs and is presenting high returns.
Over the years countries like the US, UK, Australia are outsourcing their work to Asian countries like India & the Philippines. India by far has been the preferred destination.
Below mentioned are certain benefits of outsourcing IT software services from India –
Lower Costs & Higher Benefits
One of the most important reasons behind outsourcing is a monetary benefit. India has proved itself to be the most cost-effective.
Labor costs are very high in the US, UK, Australia, Canada, and Dubai compared to India.
Information technology services like mobile apps development, web design, and custom software development are affordable in India.
Communication
Another reason why clients prefer India for custom software development and outsourcing partners is the ease of communication.
Effective communication is the most vital factor for the better execution of plans and strategies. India can speak better English in comparison to its Chinese or Filipino counterparts.
Access to Skilled Workforce
Outsourcing business to India facilitates access to skilled resources with plenty of experience. Mobile app development, web design, and application development is done with the highest skilled resources.
India is experienced in handling critical projects. India has the availability of a skilled workforce.
Advances Infrastructure & Latest Technology
Indian agencies are focussing on the deployment of the latest information technology, software engineers are highly skilled and are working for the development of mobile apps and custom software application development.
Training products are conducted on a regular basis to ensure their employees are at the top of their game all the time. Make sure that there is no use of incorrect email addresses.
The demand of overseas clients is executed in a seamless manner.
E-Commerce Solutions
E-commerce is one of the areas where companies in India have gained popularity and major dominance. Amazon is the pioneer of E-commerce. They have chosen Indian cities such as Pune, Bangalore, Hyderabad & Chennai as their service centers.
The use of Artificial intelligence for software solutions is widely used. Mobile development for such companies is done by Information technology companies in India.
Productivity & Better Custom Support
Outsourcing increases productivity and customer support. Both of these factors are indispensable to efficiency and 100% customer satisfaction which also results in recurring business.
Software solutions of outsourcing partners have advantages, all the benefits must weigh while choosing the process of outsourcing.
