IT Outsourcing Meaning
IT Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally, and sometimes involves transferring employees and assets from one firm to another. This is how Wikipedia describes it.
IT Outsourcing as a solution
IT Outsourcing offers the solution to this problem. In countries where ICT is booming and where you can earn more through IT Outsourcing than in other sectors, it is extremely popular to train as a developer. This offers opportunities for companies. Whether it is to bring the developers to your country or to work with them remotely, it can ensure that the companies can grow again.
Popular IT Outsourcing locations
The most popular IT Outsourcing locations in Europe are located in Eastern Europe. This includes countries such as North Macedonia, Serbia, Ukraine, Poland, Bulgaria and Romania. The capitals in these countries are mainly very vibrant IT Outsourcing locations. In Skopje, Belgrade, Kiev, Warsaw, Sofia, Bucharest, among others, you will find numerous organizations that provide the world with IT Outsourcing options.
IT outsourcing vs. Offshoring
When talking about IT Outsourcing we can devide the term in two versions. IT Nearshoring or IT Offshoring. These terms actually depend on where you are in the world. IT Nearshoring means IT Outsourcing ‘near’ you and IT Offshoring means IT Outsourcing to a country across the ocean. When do you choose Offshoring and when Nearshoring? Major differences to choose Nearshoring over Offshoring are:
IT Outsourcing services
Nowadays there are many IT Outsourcing suppliers and services that you can choose from. Which model suits you best? The two most popular are hiring remote programmers by the hour and hiring a dedicated team.
IT outsourcing per hour
If you are temporarily looking for remote developers, it is useful to look at hiring on an hourly basis. This is comparable to hiring a freelancer but for a lower rate and remote. We call this short term IT outsourcing. It is important to ensure good communication. Every hour counts, so to speak. Good documentation for task transfer is a must so that the production is as high as possible. Benefits of IT outsourcing per hour are:
Downsides of IT outsourcing per hour are:
IT outsourcing dedicated team
Are you looking for a more long-term solution in IT outsourcing then IT outsourcing dedicated team may be the model for you. This means that the team works only for you and that you manage the developers yourself. No project managers, no hourly rates. This is the most profitable way of IT outsourcing, especially for organizations that were actually looking to hire someone in their own country. Benefits of IT outsourcing dedicated team are:
Downsides of IT outsourcing dedicated team are:
If you want to calculate what a dedicated team would cost you, please contact us.
The benefits of IT outsourcing
IT outsourcing is an interesting solution to solve the shortage of developers in your country. It used to be only about cost savings, but this is not the only benefit that can be gained from IT outsourcing. Below is an overview of the three main reasons for using IT outsourcing:
The challenges of IT outsourcing
You are of course not the first company with an interest in IT outsourcing. Many companies preceded you. Learn from their experiences. What were their bottlenecks? How did they overcome these? Read below 3 experiences of organizations that have used the most popular model: hiring a dedicated development team:
Dependency of IT outsourcing-partner
When you hire people in a different location from a different supplier, you build up a dependency on them. After all, they often have the developers on their payroll and also have control over certain aspects. Therefore, make sure that you include clear agreements in the contract that are important to you in connection with the continuity of the cooperation. Try to keep dependency as small as possible, for example by including a period in which any lump-sum payment decreases with regard to the contract. Or a crisis plan should a supplier go bankrupt for whatever reason.
Working with remote developers ensures that project management must be top notch. For example, if you manage the developers yourself, the task transfer must always be well documented. This reduces errors and questions that save time. In addition, all IT projects are subject to many changes, so make sure that daily contact and progress check-ups are essential to keep production high. Make sure that all your internal processes are in order before you start IT outsourcing and preferably with someone who will manage the whole thing.
When working with confidential information it is always important to sign an NDA with both the IT outsourcing supplier and the developers themselves. It is also advisable to take a good look at what security measures the supplier uses. Both digitally and physically. Can someone just walk into the office in Macedonia? Is equipment stored neatly under lock and key? And what about the security of the network?
When it comes to very sensitive information, certificates and processing agreements must also be considered.
Example cases of IT outsourcing
What was your first view of nearshoring and how did that change with the collaboration with Personal Programmer?
My initial view was that of a bureaucratic process, slow and difficult. Partly determined by previous experience with outsourcing in India via a large IT party. The way I work now is completely different: short lines, direct daily contact with my three developers. Actually no different than that you work with a colleague in your country in another city.
Working remotely has its limitations. Which 2 or 3 were the hardest to overcome? And how were these solved.
The fact that you cannot stand behind a whiteboard together. That is still not solved. It means that for complex activities, such as creating a new design together, you still have to visit each other. I do that every so often.
Sometimes someone encounters a problem and then it is useful to solve it directly face-to-face together. That is sometimes difficult when working remotely, but Skype helps with this and daily contact (or more often) means that a problem never lingers.
What do you like about this way of working remotely?
It forces you to work in a more structured way. We use various online tools and with that you ensure that schedules and deliverables can be well defined and monitored.
What is your view of the quality and mentality of the developers?
Quality is great. Of course you have more experienced and less experienced developers, but my experience is that they are very eager to learn and continue (until deep into the night every now and then – without asking that of them) until something is done. I also program myself and it is nice to see the same mentality and attitude about certain things with the North Macedonian developers.
Which tools would you recommend to use in this way of working?
In addition to technical tools, we use the following tools to our complete satisfaction:
Trello for sprints and task planning
Slack for instant messaging
Skype and Google Hangout
Confluence for online knowledge management and documentation
JIRA for issue management
Our development and test servers are also on Google Cloud Platform.
What tips would you give to people who are going to work in this way for the first time?
Go there regularly, especially in the beginning: good to get to know each other so that communication is also easier afterwards. Otherwise it remains an unknown face on the other side.
Choose and use the tools well. Have a clear picture of what needs to be delivered. Perhaps a killer, but the people there, no matter how smart, cannot smell where you want to go. This is partly due to the distance. So make sure that you have a clear view of the projects yourself and that you can transfer that properly and translate it into realistic plans.
About Autorespond Nederland B.V.
Autorespond supports companies and independent service providers in their growth with user-friendly tools, good personal service and continuous product development. Autorespond offers since 2003 a SaaS solution for email marketing, billing and online payments. Via an online administration, their customers can manage all their affairs in an integrated environment around email marketing, CRM and online sales of products and services. All development activities are carried out in-house, with the realization by their programmers in Skopje.
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After 10 years of experience in the IT outsourcing business, we have perfected our service into a model that offers companies the most. Given the large shortage of programmers everywhere, many companies are looking for a long-term solution. Are you interested in IT outsourcing? Leave your details here and we will contact you as soon as possible to discuss the possibilities for your organization.