Learn Why Outsourcing Has a Bad Reputation. That’s simple!

This text is a prelude to an e-book entitled: “IT Outsourcing is expired. 15 reasons why tech-partnership is becoming more and more popular.” which is currently at the finals of works and will see the light of day soon. We cover this topic quite regularly because we have noticed some dependence in the software development industry.

Due to the constantly growing trend and popularity of the hyper-competitive market of software suppliers, a huge number of completely incompetent companies appeared on the market. The problem is that most of these companies/software houses/software providers offer classic outsourcing and this is how they position their business - which is often not true.

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Why is outsourcing being disliked?

There are huge differences, not only syntactically, but also physical differences in the cooperation models offered. Classic IT outsourcing is not the same as IT staff augmentation, offshoring, nearshoring or onshoring. Using the right term in the right context will naturally be very valuable to someone who wants to create optimizations in many areas of the company. But this dependence also works the other way around - that is, many companies, usually small, whose bargaining chip is the price - incorrectly choose the model of cooperation for their client.

This raises some dissonance, because when a client hears that offshoring is the best option for him to cooperate, because he will have frequent contact and time zone differences are not a problem - he thinks something is wrong. And rightly so!

In the case of onshoring, when the client is looking for huge savings and needs to resign from the local team and build an external team - nearshoring or offshoring will be a much better solution. Such misunderstandings that often occur are worrying and discourage the use of any form of outsourcing. What does it mean?

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IT Outsourcing stops working, the technological partnership takes its place

The greatest challenge of IT outsourcing is and has always been one thing - the dedication to solving problems here and now. Why is this not a perfect solution? For one reason - creating quality digital products, modern software development, building real remote and agile software engineers requires deep understanding.

Understanding a business sometimes takes months, understanding the intricacies of a particular industry can take years - this problem cannot be solved by one phone call or sending a long and concise presentation. In fact, it is a long-term process that requires daily conversations, establishing a great relationship where technological partners trust each other and know their needs. In this cooperation model “technological partnership” factors such as money fall into the background.

When two companies intend to cooperate in the long term and are aware of it from the very beginning, they prepare well. It is a necessary element to ensure that such cooperation does not end after several months of cooperation. Formalities, setting rates, determining the competencies of the parties are only the basics.

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There are no shortcuts!

There is a saying: “The poor man cannot afford cheap things”. True, outsourcing is much the same. When there is a need to delegate some software development to another company, and the key factor is the price, there is a high probability that it will not be quality cooperation. Ultimately, it won’t be good software either.

So, will choose someone more expensive to solve the problem? After all, the moment you choose two talented Indian developers that you found on UpWork, you say, “Yes, working with them will be as good as working with my local developers.” Of course, you might be right. After all, cultural issues and the ability to use the English language are not the main problems in IT outsourcing.

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Software development is not the same as …

The problem is that many founders approach software development companies as just another check-in task. This is not hiring an employee, closing a sale, or finding a new office. It’s a process that always takes a long time due to a multitude of factors:

• fixes and tests,
• software maintenance,
• changes in design,
• improvement of the dashboard from the admin side for new services and products.

Shifting responsibility on the developers whose outsourcing services you have used does not release you from the obligation to follow the project and daily communication. The biggest problems start when the contractor realizes that he has calculated the time for creating the project in the wrong way. Disagreements and misunderstandings arise when the decision-maker learns that it is not possible to deliver the project on time. To avoid such situations in the future, you should:

• not to make promises regarding the project that cannot be fulfilled,
• do not choose the cheapest IT outsourcing provider.

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Is outsourcing really that bad?

Of course not. Today, all businesses are in some sense based on outsourcing. Many entrepreneurs have no physical employees, no office or accounting. All the necessary elements can be outsourced and run your business by phone. Such a solution will work great as long as we look at this solution in the long term and we really get involved in it. The only question is whether it is still outsourcing or already a technological partnership.

Let’s assume that you have chosen a company that offers IT outsourcing and made a decision to create a mobile application. Quickly, it is best if they start cooperation within two weeks. This is a common example, this context is now useful to us.

1. There could appear security risks

When you start working with someone you do not fully know, who is also at the other end of the world and is not covered by the same security law - various problems may arise in this field. For example, a software provider based in the European Union will pay more attention to compliance with EU regulations in the field of GDPR than a freelancer from third-world countries.

2. Communication problems

Without establishing relationships, mutual understanding, it’s hard to talk about partnership, and ultimately communication that binds the entire process of software development together. In the case of onshoring, it is possible to meet and talk face to face. When we talk about taking advantage of offshoring, this situation is difficult.

3. Financial risk

Due to the lack of control, security problems, and poor communication, it is possible to break this cooperation and learn from mistakes - you will find a high-quality software house that will offer you a long-term technological partnership and will act as an advisor. These mistakes often cost tens of thousands or even hundreds of thousands of euros or dollars.

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Establish a technology partnership, avoid short-term IT outsourcing

This text is primarily an invitation to read our e-book, which was created recently - you will find there a lot of information that expands the topic of choosing a technological partnership over IT outsourcing. As a software provider, we believe in being uncompromising in creating technological solutions. We like to create digital products that create real change, make life easier, and optimize many things. Our experience shows that creating a great solution without great relationships is simply impossible.

Do you want to create an amazing product? So let’s start by establishing a relationship, let’s not talk about money.