In this modern digital world, we are witnessing extensive changes in human being’s behavior, the way businesses operate, and customer preferences. With the advent of emerging technologies, web and mobile app development services industries have opted for different strategies and IT outsourcing models to continue their market services.
Among different services, information technology outsourcing has created a high buzz recently and is gaining attention from the business community. According to Wikipedia, Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity or could be done internally. It sometimes involves transferring employees and assets from one firm to another.
IT outsourcing helps businesses in multiple ways, such as providing easy access to domain experts can become a part of your services, promote growth, maintain operational control, offer continuity and risk management.
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Types of IT Outsourcing
Outsourcing encompasses different definitions. Essentially, it is moving your in-house structure to save money, increase efficiency, or scale teams faster. However, this can be achieved in different ways and with other IT outsourcing models.
Offshoring is often interchangeably used for Outsourcing. However, both terms are different and not interchangeable. So what is offshoring?
Offshoring means outsourcing IT services to a distant geographic location to benefit from lower labor costs, more favorable economic conditions, time zones, or a larger talent pool. There is a time difference of at least 5 or 6 hours which provides uninterrupted support or constant updates.
Nearshore outsourcing is similar to outsourcing software development or other IT functions to a location. However, the location is closer and, in most cases, the same time zone. Nearshoring enables much smoother communication compared to offshoring.
Also called homeshoring refers to delegating several business processes to a different location within national borders. Usually, the chosen area has relatively low labor and operational costs.
Occasionally, the term “homeshoring” is also used to describe a situation in which employees work from home.
This effectively means outsourcing business processes to different vendors, thus mitigating the risk in vendor operations.
In this blog, let’s discuss why organizations require IT outsourcing companies for their project as well as the current trends, which helps them to meet the present market requirements.
IT Outsourcing Models
Full Process Outsourcing
In this model, an outsourcing company takes over the entire development process, with complete responsibility for the team, process, management, and quality. This type of Outsourcing works best when you don’t have technical expertise for the project or are swamped with projects in the pipeline.
Here, an Offshore IT company offers a dedicated team of developers that becomes a natural extension of the in-house team, sharing risks and responsibility for the quality. This model provides a fast team ramp-up based on your needs. It also results in saving time and resources on project management.
Hire Developer or Remote Resource
A vendor provides you with remote professionals that you manage directly on a full-time, part-time, or hourly basis. This model works best when you need expertise in niche technologies, meet sudden development deadlines or adapt to changing business needs.
Change in Outlook towards IT Outsourcing in the New Normal
The outsourcing industry took a severe blow during the early phase of the coronavirus pandemic due to travel restrictions, lockdowns, and quarantines. However, companies now have realized the way to respond to the crisis, ensuring business continuity. Companies are determined to create a response mechanism with resilience to overcome disruptions in the future.
The concerns over remote work delivery by outsourced teams have been answered. Companies have now naturally accepted that remote developers can achieve results without compromising productivity using the latest tech stacks, security policies, and compliance. The focus has now shifted to digital and workplace transformation.
In wake of the tumultuous times brought by the pandemic, IT outsourcing is playing a critical role to ensure business resilience and adapt to new dynamics.