Outsourcing through the eyes of the customer and the provider. Dispelling the myths

New concepts always raise concerns about their use. IT outsourcing is often used in modern business, but not all organizations are familiar with it. Despite the fact that the prices for outsourcing are quite acceptable, many businessmen doubt its effectiveness. Let’s try to dispel the widespread myths about this concept.

myths about outsourcing

Save time and money for your business by working smarter, not harder. Outsourcing is also the right opportunity to close the need for specialists who are not in your company when you need a certain expertise or a quick task solution.

1) A specialist from IT outsourcing company cannot cope with the problems with the speed of a specialist from the state

This myth is based on the belief that due to the constant presence of the specialist/developer/manager at the firm’s office, he will be able to fix the problems in a shorter time than the outsourcing specialists. In practice, the problem is solved much faster through a specialized firm, because a whole team of experienced people is working on solving complex problems. Some problems are resolved remotely. In addition, professionals in their field will do their work in such a way that you won’t need to fix anything at all.

2) IT companies do not guarantee the quality of work

This is completely wrong. A contract is signed with the customer, as well as guaranteeing the quality of services. Turning to such specialists, you can not worry about the temporary absence of a developer or project manager due to his leave or dismissal.

Also, for example, regular employees do not often face unforeseen problems, so they do not have the experience to solve them quickly while outsourcing companies solve such problems on a regular basis, and their employees constantly acquire new experience and improve their professional skills. That is why the quality of service outsourcing company is often higher, and the actions are aimed at the result.

3) After signing the contract, there is dependence on the outsourcing company

Often there is a situation when a staff member made settings that are clear only to him, so the company became dependent on his services. Such an employee may at any time want to start working with another company. Experts of IT-company mainly work remotely, and the settings correspond to the generally recognized standards, which are understandable to any connoisseur in IT.

4) IT outsourcing is very expensive

Outsourcing IS cheaper. But there is an important point that shows that the price is not always decisive if you need certain developers with the necessary experience, skills, and knowledge. In other words, if you want to buy an F-class Mercedes, do not try to buy it in the KIA Salon in the hope of saving. No offense.

accounting in outsourcing

5) IT outsourcing companies can steal commercial information

Yeah, as well as your own employees. Statistics show that most cases of leakage of commercial information are due to the fault of staff members. A specialized company has no motive to pass on information to someone else because in that case, it will damage its reputation. In addition, after applying to an IT company, the company has a much more reliable information security system, especially if no one has dealt with this issue before.

Let’s take a look at the some following facts

The 2016/2017 European IT Outsourcing Study, conducted by Whitelane Research, investigates more than 4600 unique IT outsourcing contracts held by over 1500 of the top IT spending organizations in Europe. The total combined annual value of the contracts included in this study is more than €40 billion.

Key findings from the European Study include:

  • 80% of all respondents in the study confirm that they will continue to outsource at the same rate or more, with 43% citing that they are planning to outsource more.
  • Cost reduction is the most important driver for organizations planning to increase the level of outsourcing within their organization (62%), followed by a focus on core business (58%) and access to resources (46%).
  • The service provider community continued to show a strong overall performance, with clients remaining satisfied with 89% of contracts. Still, there are differences between the performances of the 25 IT service providers ranked in this year’s study, and our full report contains more detailed information, such as the service providers ranking by IT domain as well as by 11 different KPIs across four dimensions.
  • TCS and Hexaware occupy first place on the ranking as the suppliers with the highest level of satisfaction with a joint score of 79%, followed by Cognizant (76%), Computacenter (75%) and Accenture (74%).

If you want to get the full report, check it here.

How the outsourcing company sees the new customer. 3 more myths

And now it’s time to sort out the fears of the outsourcing company and the developers in particular.

  • We do not know what we want yet – we need something. Offer us 5 variants of prototypes. And better 8. Then we’ll ask again

Specialists on the part of the customer and the developers conduct a series of meetings at which the customer talks about his problem, and the developers offer options for solving it. So the parties understand what they need to do.

Rarely, but there are extremes when the customer makes absolutely unrealistic demands, or cannot decide what he wants. It is obligatory to sign the contract on the terms of time & material and try to designate the most specific tasks. What ends such a project is often unknown – a sort of Schrödinger code.

  • The work costs exactly as much as I, the customer, is ready to pay for it. At the same time a little

There is a developer for each customer. Ordering the cheapest, bargaining for pennies, the customer will receive the corresponding product. And so everywhere, not only in IT.

After years of experience it becomes clear: if you sell your services at a low price, your customers will be miserly, greedy, meticulous customers. Why agree to work with unpleasant squawkers if there can be solid companies with profitable projects instead?

developer in outsourcing

All you need is to study the market and match the average price. Excessive dumping is an argument for good customers in favor of not working with you. A low price will scare away those who are ready to pay a lot a priori.

  • 100500 edits are normal. I pay money – I rule everything and everyone

Edits are closely related to the approach to evaluating projects: time & material and fixed price. Many deservedly do not like the second approach; with it more often the cheap developers agree. If a serious company has to work with the fixed price, then they must be 100% sure that they will make a profit from this project, and the terms of the contract will not change. When working with an adequate customer the discussion of the fixed price, as a rule, doesn’t go. Sometimes simple work with small risks allows a fixed price, but it is worth noting that it is on the temporary basis, and after – time & material.

If the customer does not know what he wants, but is adequate, and pays for the work (even if the new actions contradict the old ones), then why not?

Mistrustful customers who do not want to work with hourly pay, lose more. Because the developers put in a fixed price a lot of risks. The price doubles, and even triples.

Even if sometimes we do not agree with the request of the customer or even consider it ludicrous, we are still trying to find the right approach to each customer, the present or the potential one. It’s called focus on customer and years of experience.

Let’s summarize  

Our employees from year to year work on various projects of any complexity, and they know all the pitfalls and how to avoid them. Our extensive expertise extends to such areas as Сomputer Vision, Machine Learning, Healthcare, Data Science, IoT and Industry 4.0.

We at Softarex Technologies sincerely believe that the customer-provider relationship should be equally convenient and beneficial to both parties. Therefore, we immediately voice our principles, outline the area of responsibility, document the timing and services that we take on ourselves. We do not put pressure on cheapness and do not use the tricks that some of our competitors like so much.