Why Outsourcing is Important To Increase Your Profit Margin?

By Ronak Patel   |   6 September, 2019
Why Outsourcing is Important To Increase Your Profit Margin?

Outsourcing is evolving day in day out. Most of the top companies such as Microsoft, Intel, Infosys, TCS and even Google outsource most of their complex projects. The reason is simple: it saves lots of money, time, efforts and resources. This is considered today as a very strong business strategy. With the marketplace turning out to be more competitive, outsourcing can be considered as a smart decision, which can save the business from closing up permanently.

The businesses which are looking for ways to achieve efficiency in terms of quality and costs are opting for outsourcing options to countries like India. For companies, this speeds up the product development along with boosting efficiency and cutting down costs. Moreover, this also helps companies to increase productivity, bandwidth, and output. So based on their different needs and requirements, the companies can scale up or down the projects all the while tailoring their approach. This also makes it possible for the companies to offer services to their clients who are actually outside their expertise and core offerings.

78% of business owners across the globe are satisfied with their outsourcing partner. – Deloitte 2016 Global Outsourcing Survey

Even though many businesses are already opting for outsourcing services for their business, there are some for whom this is a new concept completely. Such businesses need to have a complete understanding of this term and know how it can positively influence their business.

What is Outsourcing?

Outsourcing refers to the term where the company handovers its tasks to some external party and entrusts them in completing it. The work is either outsourced to a party within your local area or to someone outside your country. Companies outsource different kinds of tasks to the external party, which can include web app development, call center services, inventory management, etc.

Why are businesses moving towards outsourcing?

If we look at things, it can be seen that outsourcing offers a competitive advantage in a number of ways and for the same reason more number of companies are trying to take advantage of the same.

Outsourcing companies for product development are said to have more types and number of capabilities. They work towards building a core set of competencies and work towards mastering it. This way, they can easily crack even the toughest challenge that they face in their domain and thus offer a wider range of services.

Frequent innovations and advances in technology make it profitable for the firms to outsource and they can have the best of everything without having to keep up with the latest trends.

New technologies pop up every now and then and so, if the companies plan to keep up with them, then they will have to spend more amounts of money to stay ahead of the numerous technologies. With product life cycle cut short and shorter time to market making the headline, businesses can gain a competitive edge in the market by keeping up with speed.

 

 

62 billion U.S. dollars is the total global IT revenue reached in 2018.

 

Different Types of Outsourcing

There are some outsourcing types to name a few and they are:

Internal Outsourcing

Internal outsourcing is the process where you hire local labour to increase your staff. This can include hiring a part-time employee, finding someone for a junior position or an assistant. The main reason why businesses plan to go for outsourcing is to help the current employees in terms of sharing their workload. This is a widespread practice followed by businesses from time to time and this has proved to be a good tactic in handling many issues coming in the way of business growth.

Onshore Outsourcing

Onshore outsourcing is the process where business processes are outsourced to a single person or a company which is located within the same country. Here the services of the people are bought to take care of routine tasks like maintenance support service, inspection tasks, etc. The core reason to have Onshore Outsourcing is that the people to whom you are outsourcing can meet to you in person without spending much.

Offshore Outsourcing

In the case of offshore outsourcing, the work is outsourced by the company to a party which is located in some other country. Businesses outsource their business processes as well as other services to an individual or an offshore outsourcing company to get the work done. The core benefits of having offshore outsourcing is the cost cutting due to the easy access of developers in that country.

Types-of-Outsourcing

Benefits of Choosing Outsourcing for your Web App Development Needs

No doubt, there are some reasons why businesses plan to go for outsourcing services to lend a hand in order to get the tasks done as expected. In the case of web app development needs, outsourcing development will let you have experts working for you as needed and you can have the skills and talents that are much needed for your project with ease. This will let you have a competitive edge in the market without having to shell out more money.

Why-Outsourcing
Some of the reasons why companies prefer outsourcing are:

Cost savings

More number of businesses now needs to move ahead with tight budgets. You can manage your web app development costs by choosing the right outsourcing Web App Development Company. Such a step will help you save your money on IT recruiting budget; again if you plan to go for freelancers, this will be a cheaper option compared to going ahead with paying someone a salary.

 

59% of companies outsource to reduce or control cost.

 

Moreover, if you choose to go for your outsourcing needs to countries like India, you will be able to enjoy web app development using agile technology and enjoy the same talent at a lesser price compared to what you will get from the outsourcing partners in the USA or Canada. The developers and designers in countries like India are capable of working efficiently and quickly at a reasonable rate.

Ease of scaling team skills

The needs of the web app development project may vary and it will never be constant every time. So, based on that knowledge, outsourcing services for web app development offers the ease to scale your team’s skills up and down as needed. This means you can set your budget based on what you want from the project. This way, you will have the freedom to use your budget in other important areas or use them in case you plan to expand your in-house team to reach your project goals efficiently. In other words, you can either let your experts go or have professionals in the areas where you have no experts.

Flexibility

Today we expect the team members to handle different responsibilities and carry on with a variety of tasks. You and your team can so focus on the most critical tasks that you need to run your business as you will not be spending more time hiring and training employees.

This means you will have more of your budget with you which you can then use towards marketing, sale and business development. Moreover, you will have the option to choose your developers on a project basis which will ensure that you will not have to take care of the development team once the product development is completed.

Access to right IT talent

No doubt, it is tough to find the right IT talent to take care of your project in the current marketplace. You can now easily find a pool of candidates who are well-qualified to take care of your project by choosing outsourcing for Web and App development. For the same reasons, it becomes possible for the company to start the development at the earliest, build quality solutions, make lesser mistakes and have the web app product developed for the users within a less amount of time.

 

28% to take help from talented professionals.

 

Access to domain knowledge

In today’s competitive world, businesses plan as a part of their growth strategies is to expand their business quickly into new markets. You may be having an idea for your app development, but when you work with web app developers with expertise and experience, you will be able to spot many opportunities emerging out of it. Web app outsourcing companies which are robust in nature will have extended development teams who are experts in different fields. Such developers will be able to help your business with future expansion easily because of their varied competency levels.

Time savings

In today’s digital environment with high competition, you cannot afford to have a place for errors and this means your product should reach the market as quickly as possible. It will become possible for you to reach your customers soon and overcome your brand challenges by hiring a web app development partner who has the experience to follow agile methodology and dedication to deliver high-quality products on time.

Reaching customer expectations 

You can now research and identify the persona of target customers by taking the help of a skilled outsourcing company. It is now possible for you to understand your intended audience in a better manner by spending time in the area of persona development. This way it will become possible for you to develop web app products which are desirable to your clients. It is a thing to understand that your website or app may easily fail in the market if you develop it without having proper knowledge of customers’ needs, wants and their expectations from you.

Here is an Infographics of IT Outsourcing 2021, you should go through.

IT Outsourcing 2020
Idea and Solution
Wrapping it up

Whether directly or indirectly, outsourcing is said to be offering immense advantages to the organizations. In case the company does not have the chance to go for outsourcing, then they will have to deal with everything on their own. This means they will have less amount of time to deal with building creativity and skills. Eventually, they will fail to have a competitive edge in the market. By choosing to outsource, the businesses can easily free up the time for many tasks into the hands of the experts which they would have to deal otherwise on their own. This will help them to concentrate on the core areas of the business and thus strategically move ahead.

Ronak Patel

Ronak Patel is a CEO and Founder of Aglowid IT Solutions, an ever-emerging Top Web and Mobile Development company with a motto of turning clients into successful businesses. He believes that Client's success is company's success and so that he always makes sure that Aglowid helps their client's business to reach to its true potential with the help of his best team with the standard development process he set up for the company.

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