The primary purpose of outsourcing software development and other related operations, such as network management, data center operations, network management, etc., to overseas destinations, is to increase the technological capacity of a company at a lower cost. But this is not the only value for a business. The know-how and talented people with unique expertise, almost instantly accessible through outsourcing, enable rapid business growth. The outsourcing provider usually already employs professionals and puts a team together to match the needs of a specific project, or cherry-picks and hires software engineers, UX/UI designers, etc., with the necessary skill set. Modern outsourcing models allow different levels of involvement in the project management for the client, including full control. We have previously mentioned the difference between outsourcing and out-staffing as its form, as well as dedicated and augmented development teams. In this article, let’s look at the main pros and cons of IT outsourcing – offshore software development in particular, and the reasons why Ukraine is among the most promising IT hubs in the world and a go-to place to implement business ideas.
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10 Benefits of outsourcing software development:
1. Possibility to focus on core competencies
If software development is not a company’s primary business line, organizing an IT department might be a significant distraction. Vendors spend years building expertise and establishing processes to achieve high software development efficiency. Outsourcing frees up a vast amount of time and allows focusing on key business goals, implementing strategies, marketing, sales, or whatever is critical at the moment.
2. Little recruiting effort
Recruiting highly qualified specialists often requires much effort and may be quite lengthy, let alone using the right approach – screening procedures, interviewing techniques, technical tasks, etc. Therefore, it is better left to experienced professionals. As a result, after several rounds of selection, the client is offered the best candidates to make a final decision.
3. Affordable high quality
Due to tough competition, in many countries, there are lower rates for IT specialists, whereas the development quality remains as high as in North America or Western Europe. Besides, the price includes all operational costs, with no overhead expenses.
4. Access to the global talent pool
There are incredibly gifted people everywhere, and IT recruiters are working up a sweat to get top tech talents for clients worldwide. The retention of such employees is always among priorities. When one project ends, valuable specialists usually remain employed and are kept “on the bench,” even if they temporarily don’t bring profit to the outsourcing provider.
5. Out-of-the-box solutions
Vendors invest in mastering cutting-edge technologies, the most effective software development methodologies, and management techniques, which means they are ready to create a competitive product. They often have invaluable experience in different industries, are used to challenges, and prepared to provide a fresh perspective and come up with creative solutions.
6. Dedicated employees
If you have a negative experience of dealing with freelancers, a dedicated team is what you need. These are full-time employees that will not leap from one project to another, depending on where the payment is higher. In case a client is not satisfied with a specialist, the outsourcing provider offers a quick and free replacement, which will not disrupt the process.
7. Scaling own team
It might be hard to predict how a product will need to be developed to meet market demand. With outsourcing, you can quickly upsize your team or downsize it, if it is economically justified.
8. Greater flexibility
If the market situation changes or you are not completely satisfied with your current outsourcing partner, you can find another one, which is much easier than reorganizing your company’s internal activities.
9. Limited commitment
If you need to design several features for the ready product or launch a new one in a few months, signing a short-term outsourcing contract is a great option. After the work is done, you will not have to fire anyone and pay off compensation.
10. Shorter time to market
In a volatile business environment, timing is often critical for success. Sometimes you must access additional human resources right here right now to be the first to create an MVP, present it to potential investors, and bring your innovation to market. With well-established processes and an agile approach to software development, it is realistic.
10 risks of outsourcing software development and how to avoid them
1. Leaks of confidential information
Sharing sensitive information with third parties is always a risk, which may cost too much. However, if you sign a nondisclosure agreement with the outsourcing partner which has an established industry reputation, it is reduced to zero.
2. Wrong time estimates
It’s a widespread problem: it turns out the product is not working as expected, and it will take hours and hours you must additionally pay to fix everything. How to safeguard yourself against this situation? Again, cooperate only with reputable companies and meticulously sign a contract that stipulates penalties for not meeting the deadline. Also, as we explained before, sometimes it is worth investing in the Discovery phase to get a realistic assessment of the timeframes and budget for your project.
3. Low qualification, skills mismatch
Some outsourcing providers may intentionally overestimate a software developer’s level to sell them at a higher rate. A team lacking knowledge or experience is also a big threat to your project. The solution is to participate in the recruiting process actively and pay attention to certifications and training to make sure you get what you pay for.
4. Poor quality of software
It is a decisive factor for the success of any project. Glitches, especially those discovered after the product launch, bear huge reputational risks. Before signing a contract, make sure that the vendor’s QA processes meet the highest standards, also, perform independent code reviews and regular functional testing.
5. Unrealistic expectations, undefined metrics
When you voice your vision of what your product might look like, how it should function, and when you want it to be ready, unscrupulous providers might distort the truth just to get the contract. Ensure you clearly define product metrics and successful business outcomes and include them as part of the agreement.
6. Lack of interaction due to different time zones
Team interaction and mutual understanding is another success cornerstone. Different time zones might impede effective workflows. The solution is collaborative technologies: various teamwork tools, such as Jira, which support the effective exchange of information. Vendors also adapt their employees’ working hours to the client’s operation times to ensure live communication.
7. Misunderstandings due to low English level
English is the lingua franca of the business world. If your overseas team members have inadequate knowledge or an accent that is hard to grasp, it may lead to frustration. Have a personal talk with each of your potential new employees to avoid any language-related communication gaps in the future.
8. Low motivation
Your new employees realize they are hired temporarily and will probably be fired when the project is over. It may influence the overall motivation and productivity of the team. Choose the vendor with a low turnover rate and a defined policy on employees’ retention.
9. Cultural differences
The attitude to criticism, way of resolving conflicts, level of honesty, and many other factors that constitute a business culture may differ from country to country. The client and the vendor must be on the same page, and the best approach to ensure it is an open dialogue with the team.
10. Lack of trust
Trust is hard to gain, especially if the outsourcing partner will have to deal with commercial secrets. It requires not only determination but also specialized knowledge of data protection. Check how security measures are organized, whether employees have adequate training, and what guarantees the vendor provides.
10 reasons to hire software developers in Ukraine
With over 4,000 companies on the market, and more than 200, 000 engineers, Ukraine is one of the major European IT outsourcing hubs. Below are the main reasons why you should consider it as a destination for implementing your project:
- 1. Highly skilled specialists with a university education, many Senior-level.
- 2. The vast majority of them have previous experience of working on international projects.
- 3. Strong motivation for excellence, which is part of the established industry culture.
- 4. Relatively low software development rates.
- 5. Many IT companies invest in the future by offering free training courses to employ the most talented graduates later.
- 6. Many companies follow global technology trends and use the best software development practices, which results in excellent quality.
- 7. The high overall level of English; often it is an integral part of a career development program.
- 8. Many outsourcing providers conduct cultural awareness and communication training to ensure smooth interaction with clients and prevent any misunderstandings with the team.
- 9. The business activities of IT companies in Ukraine are legally regulated, including employment and taxation.
- 10. Ukrainians have a European mindset and the same values.
How does it work with Blackthorn Vision?
Blackthorn Vision has been in the Ukrainian outsourcing industry for more than a decade. Over this period, we have considerably evolved to respond to the challenges described above. We have developed a strategy, found our solutions, and established the processes that allow us to be competitive and create successful products for our clients.
1. Powerful tools
2. Continuous improvement
Blackthorn Vision is Microsoft Gold Partner – a title that obliges our employees to earn annual certification and grow professionally. Moreover, our internal competence groups foster knowledge sharing, so we all together keep a finger on the industry pulse.
3. In sync with clients
We have ample experience of working with North American clients. How do we overcome time zone differences? Firstly, we adjust working hours to overlap with those in the US or Canada. Secondly, we listen to the client’s expectations and together make a detailed action plan on task implementation, demo-meetings, etc. Thirdly, we use such tools as Jira and Microsoft Azure, which make project workflows transparent and predictable.
4. Fluency in English
Blackthorn Vision provides free English classes to all employees. Furthermore, apart from other hard and soft skills, it influences career opportunities and salary levels. Thanks to awareness of possible interaction pitfalls, we have fine-tuned the English training to improve the language command and equip our team with the basics of business communication etiquette.
5. Swift recruiting and team building
Depending on the project needs, we create a dedicated team or augment the client’s one with our specialists or by hiring additionally. With hundreds of candidates in our database, recruiting is fast and effective. We build a close-knit team in no time by using established selection procedures, onboarding, retention, and motivation programs.
6. Round-the-clock monitoring
We understand that your project is your precious baby, ensuring everything is under control and going as planned with no pain points by 24/7 management.
7. Well-deserved reputation
Blackthorn Vision has got a good name. Statistically, our average cooperation time with a client is six years, which characterizes us as a reliable and trustworthy outsourcing provider. Partnership with recognized market leaders and Fortune 500 companies also testifies to high professionalism and exceptional client focus of our team.
8. European mindset
Our offices are located in Europe’s very heart, and we share cultural DNA with many forward-looking democratic nations.
9. Truth as religion
Fulfilling promises is the essence of our corporate culture. That is why we never give any to our clients before we know what and when we will be able to deliver. In most cases, we carry out thorough pre-development research to provide exact time and budget estimates.
10. Values behind the success
We believe that the right values are behind any achievement. Openness and mutual trust solve any problem. Rewarding passion for new ideas and initiative support growth. We equally cherish our clients and the people we employ, and they stay with us.
- Originally published.