Offshore outsourcing has become one of the increasing trends nowadays. Individuals, entrepreneurs, enterprises and companies hire remote workers to get their project completed at a reduced cost.
At the same time, outsourcing helps enterprises frees up time and focus more on core business process.
Meanwhile, I have found many of my clients having a lot of perplexities regarding outsourcing IT projects including Web and Mobile app development and they often keep asking some fundamental questions?
Considering their concerns, I just searched through the internet, and I found that there are many who are quite hesitant to hire remote developers or Web & Mobile App Development Company in India.
I found that the sole reasons for this issue are entirely different. So, I took the task to explain things in details. I have tried my level best to give a closure look to our clients regarding the outsourcing web development projects to foreign countries including India.
1. What Does It Mean When an Organization Is Outsourcing?
Outsourcing, also known as “contracting out”, is a way to shift tasks, projects, jobs or process to the external workforce for a considerable period of time.
In simple term, it’s a practice of acquiring services and goods from the foreign supplier at the reduced cost that in turn improves efficiency and saves maximum on expenses.
There are some other reasons for outsourcing as well. We’ll understand them later in this article.
So, it is clear that the sole reason for outsourcing is to reduce operational cost.
According to brandongaille, 46% of the company (that includes top companies like Facebook, WhatsApp, etc.) outsources the project to get it done at a reduced cost while 12% do this to get world-class capabilities.
2. What Are the Types of Outsourcing?
As outsourcing involves obtaining goods and services from foreign countries. It is not just IT projects that individuals or companies outsource rather it can be anything. Outsourcing can be divided into four main types. For example;
Big IT companies such as WhatsApp, BaseCamp, Google, TransferWise and to name just a few outsource their projects to a foreign company to get the IT project developed at the reduced cost.
Similarly, there are hundreds of such companies who out hire professionals from other countries to overhead expenses.
It involves a practice when a company hires the third party outside a company or hires an individual from other countries.
For example, if a company offers design service and they get an application development project, they outsource the work by hiring a party outside the company.
Hiring a professional for a specific period of time helps a company save a lot.
Do you think Apple manufactures all the equipment that it needs to make devices? Of course not! The IT giant also outsources things such as display and some other hardware equipment to other countries.
Commonly, manufacturing companies to outsource to get things done at reduced cost.
What happens when you get projects more than your workforce? You are left with two options: either increase workforce or contract out the projects to foreign companies.
Simply, the companies having multiple projects, hire an external workforce to complete the projects.
It helps them two ways: earn benefits and reduce expenses.
3. What Are the Reasons for Outsourcing?
Outsourcing now is a strategic step for a business to gain a biz advantage and beat the competition.
Companies outsource business process in India to reduce overhead to produce quality products at cost-effective rate. Companies outsource for many additional reasons.
One of the top reasons for outsourcing is to lower the expenditure on fixed rate. At the same time, the external workforce can be cheaper when you outsource your projects to India.
We have explained everything in detail (in this post) regarding the benefits of hiring professionals from foreign soil -especially from India. Here’re the top 10 reasons for outsourcing.
Reduce and Control Costs
According to the data, 44% of companies believe that outsourcing helps them reduce and control cost.
Access to Resources
Outsourcing helps companies access the resources which are unavailable internally and satisfy customers.
Utilize Internal Resources
When a company outsources projects, they frees up internal resources that can be utilized in additional tasks.
Profound Focus on Business & Customers
28% of business individuals believe that outsourcing helps them improve business and satisfy maximum customers.
Access to World-Class Talent
Outsourcing projects are the way to get access to world-class talent and deliver the same output with quality work.
When a company outsource, the party not just only helps to complete the project, but it also helps mitigating risk.
Fasten Time/Resource-Consuming Task
Outsourcing helps companies fasten their time and resource-consuming task, and that establishes credibility.
4. Is Outsourcing Cheaper?
Of course yes! The reason for outsourcing is to get things done at the lowest price while delivering the same level of outputs.
As far as quality work is concerned, companies hire professionals from outside after getting the full assurance that they will get quality work within deadline.
I have given some of the top reasons as to how outsourcing is cost-effective for business, especially from India.
Cheaper Labor Cost:
India is the largest outsourcing hub with $150 billion marks. There are many positive aspects here that make companies happy to outsource projects, especially IT projects including Web and Mobile application development to India.Besides, when you look at the cost of development from one country to another, you will find that there’s a massive difference.
If you hire developers from outside USA, it will cost you average $25 to $80 while the developers in India are paid $15 to $50 per hour. But, it doubles up the cost when you hire developers from the USA for the same projects. Developers in the USA are paid between $50 to $250 per hour and it can go even higher in certain case. Importantly, when a company hire US developers, they actually outsource that projects to India (hidden truth).
Cut Operating and Labor Cost:
When company outsources projects, it overhead their labor and operating cost. Developing an application is costlier than outsourcing it.No doubt, a company needs to pay even for outsourcing and it will save a tremendous amount of cash. At the same time, you have to spend some handsome bucks on the training of the employee, or you need to hire an experienced employee. For example, if you have hired fresher, it won’t help if assign him an essential task.
5. Why Is Outsourcing Important?
Outsourcing is significant for many reasons. For example, it makes your business process easier and enhances productivity.
It helps startups, and entrepreneurs expand their businesses while satisfying a large number of customers together. They can outsource project focus more on the core business projects.
Outsourcing is essential for companies, especially start-ups. For example, start-ups struggle for many things such as effective workforce, good infrastructure, ample amount of resources and much more.
Therefore, outsourcing can help them access all these benefits. They will be able to provide top class services to their clients at the reduced cost.
6. What Are the Advantages of Outsourcing?
I have talked about almost questions that our clients keep asking regarding outsourcing. However, there’s a significant question that I don’t want it to go untouched.
So, let’s find the significance and benefits of outsourcing. Business has plenty of benefits of outsourcing.
Focus on Core Business Process:
When a business has projects more than its capacity, it can negatively impact business. Outsourcing, on the other hand, will help entrepreneurs enhance their productivity.
Outsourcing also keeps business free so to focus more on strengthening the company and letting your employee become more productive provide attention on the main tasks.
When a company outsources, then you are supposed to get more productive and efficient work with higher quality. You don’t have to spend big bucks to satisfy your potential customers.
The outsourcing companies in India provide the same or even more excellent value of work at the reduced cost. That helps a business two way: enhance credibility and retain customers.
Enhances Business Reach:
What happens when a business provides the satisfactory result to their clients within the deadline?
Here, a client turns the biggest advertisers. The company gets more new customers. That adds feather into the cap.
That’s the most significant advantage of outsourcing. Business and competition run parallel to each other. The challenge is that one has to stay tight and competitive to remain in the limelight.
Outsourcing is the way to make the business rule the roost.
Additionally, outsourcing helps business be more flexible and agile and readily adopt new emerging challenges. In technology, there’s new tech trend each day and outsourcing makes industry capable of beating the trend.
7. Why Choose India over Others for Outsourcing?
Let’s come to core points as many of my clients have also raised this question why they should outsource to India.
Pricing may be the one factor for others, but there are many other things that compel business to outsource IT projects to India.
Let’s understand some of the top reasons as to why it benefits to outsource Web and mobile app development projects to India.
India is the land of talents. When it comes to IT, Indian developers and designers are making world records in this field. At the same time, they offer guaranteed solutions the reduced cost.
It is all because they are highly dedicated and efficient to provide services with the best of their ability.
India is the second largest populated country in the world, having a large number of IT professionals. You can get highly efficient services at the lowest possible price.
Indian government is pro-IT and has implemented a number of fruitful schemes that help companies including IT industries get more benefits when they outsource in the country.
Tax or levy is extremely less as compared to other countries. At the same time, development companies are also charging decidedly less that make your projects quite affordable.
That’s the winning points. You can hire developers and even Development Company at the lowest possible price. I have explained and compared in the paragraph written above about the amount paid to the USA and Indian developers separately.
You can refer to this. Even after having a sky of difference, Indian developers provide the same level of outputs without cutting the quality.
8. What to Look in a Development Company before Hiring?
Well, this is unfortunate that some of the clients who outsource projects to India have to face some issues. Well, I have solved it. I have some healthy suggestions for you so that you never get trapped by fake companies or developers. Here are the tips.
If someone known to you refers to any development company, then you should consider this first. That’s the best options to hire the reliable company.
When your contacts refer you any company that means they know how the company works and that’s the best reliable source you can ever have.
If you are searching for development companies online, then keep the expertise of developers and company on top of the priority list.
The company having good experience can understand your demand correctly and help you get the best result.
When you look for outsourcing, make sure that the company has a proper channel to communicate and how easily promptly they are ready to get talk when needed.
Ask the development company whether their working atmosphere is secure. Alternatively, do they provide you security guaranty? You must ensure that your project is safe. Ask for signed documents and then proceed further.
Make sure that the company has experienced developers who work on trending technologies.
Here is an Infographics of IT Outsourcing 2020, you should go through.
When it comes to outsourcing, there is a sense of fear. No doubt it should be, as only then you take care of precautions that you should. Always think twice and get assured from your side before you proceed.