Outsourced software development, and IT outsourcing in general, are becoming increasingly popular. There are plenty of IT outsourcing success stories, and there is undoubtedly something you should learn from them. So, which is the best example of outsourcing? We’ll go over the top 10 IT outsourcing case studies in this article.
IT Outsourcing market overview
The COVID-19 epidemic has resulted in a significant increase in remote work. According to Gartner, by the end of 2021, 32% of professionals in knowledge-intensive positions (i.e., engineers) would be working remotely, up from 17% in 2019. By the end of 2022, remote workers will likely account for 52 percent of the US workforce.
65% of successful companies include outsourcing in their model.
As of March 2020, 16 million Americans were working remotely. According to Gartner, roughly 74% of CFOs intend to relocate at least 5% of previously on-site personnel to permanently remote employment following the quarantine.
According to the Whitelane poll, Dutch companies would offshore IT talent in 2021 to save money (67%) and provide excellent team scaling flexibility (19%). It is obvious that remote work and outsourcing are viable solutions for keeping and flourishing their businesses.
Which of the following is an example of global outsourcing? Aside from IT personnel, many organizations outsource their HR, accounting, and payroll departments to keep their operations lean and hyper-functional.
Given the worldwide tech talent scarcity, outsourcing is becoming an increasingly appealing alternative for organizations. It solves various issues ranging from lowering software development costs to overcoming the difficulty of obtaining qualified professionals.
Which is the best example of outsourcing? – 7 successful cases
There has never been a better moment to outsource work to other companies to save money and time on initiatives that will benefit your company. So, what is the best example of outsourcing that will help you completely grasp the magnitude of the trend?
Today, we’ll look at 10 successful outsourcing examples of how organizations develop their operations and outpace competition on the global market by collaborating with outsourcing teams. Then you can start thinking about what you would like to have done outside of your company.
Slack is one of the well-known tools whose success may be attributed to outsourcing since the company engaged the Canadian design firm MetaLab to develop the beta version into a popular product.
In July 2017, the firm secured a $250 million investment worth $5 billion through outsourcing website or logo design online and mobile apps. Slack’s most recent valuation, in August 2018, was $7.1 billion.
Slack’s narrative is rightfully regarded as one of the most remarkable instances of IT outsourcing. The Slack team obtained helpful input by depending on MetaLab, which helped them design a product that reached 15,000 users within two weeks of its introduction.
In May 2018, the number of users had surpassed 8 million, with prominent corporations such as IBM, BBC, and Oracle embracing Slack in their everyday operations.
WhatsApp needed to keep operating costs low because it had little startup funding (the seed round was $250,000).
The corporation looked to Eastern Europe for technical ability to manufacture and promote the product.
WhatsApp hires offshore software developers from Russia. According to WhatsApp Co-Founder Jan Koum, the business employed offshore developers from Russia because of “good engineers there.”
Most in-house personnel were devoted to customer service and operations, while development was handled overseas. Though WhatsApp initially outsourced most of its technical employees, it eventually transferred some contractors to the United States.
Skype was a pioneer and market leader in the field of internet video. With software clients that function on cellphones and PCs, practically everyone has used or is familiar with Skype. Skype, like WhatsApp, recognized that product development was not the most critical factor in its success. Instead, Skype needed to locate the necessary expertise and abilities at a reasonable cost to continue developing the program while keeping prices down.
Skype chose Estonia (East Europe) as a source of talent and hired numerous developers to work on the product. As time passed and these developers exhibited success, Skype added them as partners, further solidifying the partnership. Skype’s plan worked, as Microsoft purchased the company for $8.5 billion in 2011.
Reasons for outsourcing include cost reduction, capacity concerns, and access to a pool of talents and abilities.
Lesson learn: Skype offers a similar experience to WhatsApp, focusing on identifying talent worldwide. Both firms have demonstrated that the most crucial criterion, rather than geography, is the availability of skills.
Google began as a basic search engine but has now grown into a giant that provides hardware and software services and advertising services and employs people worldwide.
Today, Google has practically become a metaphor for the internet itself, and its name has become a verb used by everyone when discussing online searches.
Google is a technological corporation with both its strength and core competency. They have been one of the largest outsourcers for many years and outsourced non-core tasks such as administration and IT labor.
However, Google recognizes that, despite its scale, it cannot accomplish everything. Reasons for outsourcing include gaining access to a pool of talents and abilities, addressing capacity challenges, enhancing quality, and lowering prices.
To that purpose, they have also outsourced development work, email assistance for goods such as AdWords, and other tasks. These people are easily integrated into their in-house support staff, giving clients faster response times at a lower cost.
Because of the sheer size of Google, it is impossible to quantify how widely particular IT positions have been outsourced when it expanded into software development, IT infrastructure management, and other areas.
Lessons to learn: Google knew that size doesn’t matter when it comes to outsourcing. Google maximized its budget usage by identifying what work could be outsourced and what needed to be done in-house. All of this makes Google an ideal outsourcing case to demonstrate the benefits of outsourcing.
Several names spring to mind when discussing online eCommerce enterprises. Of course, there are Amazon and eBay, but one firm that has swiftly risen to prominence is Alibaba. Alibaba is another company that outsources, but unlike Amazon and eBay, Alibaba is situated in China; therefore, the obstacles of outsourcing are pretty different.
The majority of organizations that outsource do so for financial reasons. This is frequently done to lower-cost nations like India, China, and the Far East. However, the paradigm transforms when the firm is located in that location. Alibaba recognized that, while local manufacturing and resource costs could be kept low, the talents required for growth were not accessible at scale in their area.
With this in mind, Alibaba began seeking partners and outsourcers early in their growth across various initiatives and discovered many of the capabilities they need in the United States. By outsourcing web development to the United States, the site blossomed and developed incredibly.
Reasons for outsourcing include gaining access to a larger pool of talents and abilities, boosting quality, and focusing more on core business.
Lesson to learn: The essential idea to take away from this is to be aware of your needs. Knowing what talents were missing in their location, Alibaba could swiftly discover resources elsewhere capable of completing the jobs that needed to be completed.
Basecamp is well-known among project managers and anyone looking for a solution to keep projects on track. It began tiny, and despite its prominence in the project management area, they have maintained a modest footprint of in-house resources.
Basecamp recognized that attempting to do everything on their own was not the best strategy for the organization. While others were utilizing their product to handle projects and work, they saw that they were experiencing internal workflow and client support issues. To address this issue, Basecamp chose to outsource some critical operations so that their employees could focus.
With Basecamp, improving the app was a task that needed to get done, but Basecamp understood that others could also perform that task. In this outsourcing example, Basecamp continued driving improvements into the product by using remote developers, which helped it grow. Simultaneously, the internal staff focused on internal processes and organization, ensuring the company thrived.
Reason for outsourcing: a greater focus on core business.
Lessons to learn: The critical point to understand with Basecamp is that companies need to know where their problems are. Basecamps’s case was not with skills development but rather their internal business operations and time. By outsourcing work to others, Basecamp was better able to run their organization.
A next outsource example is Citigroup. Citi has outsourced its IT operations since 1992. The corporation operates various offshore facilities in India, the Philippines, and Poland.
Furthermore, Citigroup reportedly cut 11,000 workers at its headquarters in 2012, at least a quarter of IT-related employment. The majority of their IT functions are now performed abroad.
Along with its “facilities of excellence” (offshore development centers managed by Citigroup), the corporation has ongoing agreements with several outsourcing firms, including TATA Consultancy Services and Wipro.
Bank of America, Barclays, Goldman Sachs, and J.P. Morgan are among the other financial titans that outsource tech skills.
Which is the best example of outsourcing? – Key takeaways
The list of successful examples of outsourcing we’ve supplied you with is only the tip of the iceberg to answer the question: Which is best example of outsourcing?
If you’re in the growth phase and aren’t sure what step to take next to drive expansion, don’t be scared to look into outsourcing.
Outsourcing can assist you in locating qualified candidates. It might help you in sticking to your budget. It may free up time for your brilliant team members who spend too much time on monotonous duties at home.
Outsourcing may be the solution you require to properly expand your organization and continue to compete on a worldwide basis.
In the long term, it is a form of art. The most stunning situations are frequently the product of inspiration – but they are also the outcome of a strategy. Once you know what you want to outsource and why, you can decide who to hire, and the good news is that trained specialists can assist you in finding the right individuals to drive your vision to success.
InApps – A reliable IT outsourcing company in Vietnam
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InApps Technology is more than a software development company with app and web development service. It is a dream of Vietnamese developers. Our passion for technology inspired us to start InApps with the desire of helping Startups and SMEs successfully utilize technology to growth hack their business.
At InApps, you have fully managed your software development project, collaborating with a specialized team of professional software developers.
Our process is straightforward:
- Describe your demands and staffing requirements; you may begin by hiring a single developer or a whole team.
- Using the tools and procedures you like, you may interview, recruit, and manage your software engineers.
- The team will begin operating under your command, and our retention program will help reduce turnover and keep your staff pleased.
If you are ready to try the potential presented by our approach, don’t hesitate to contact us using the form below to access available developers.
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