Outsourcing. Is it worth trying?

How many of us can recall the White House statement in 2013:

The Bureau of Labor Statistics projects that by 2020 there will be 1.4 million computer-science-related jobs available and only 400,000 computer science graduates with the skills to apply for those jobs”?

Many outsourcing companies rub their hands in delight when they saw the number of vacancies predicted and not possible to be covered. However, as is often the case with predictions, surely they did not come true. The BLS economists approve that their comparison is “wrong,” and the study only takes into account US college graduates in computer science. What about all Visa H-1B employees and recent immigrants who have graduated from colleges outside the United States, or people who have repurposed?

The outsourcing services market is growing every year and already amounts to $ 413 billion.

The demand for programmers still exceeds the supply on the market, that is why outsourcing is popular. However, some people believe that outsourcing is associated with great risks, so that, at times, even investors oppose the decision to choose an outsourcing company. Let’s consider all the pros and cons and put an end to this dispute once and for all.

One of the problems is that many companies do not want to associate themselves with remote work. Evidently, Covid has made them change their mind. Check out this excellent survey from Gallup about employees’ attitudes to working remotely. After lockdown having been imposed in almost all civilized countries, remote work is no longer a problem, but it is just the tip of the iceberg.

Some people believe that there must be few experienced specialists in outsourcing, that surely the experienced ones have been working in product companies already. This sounds very strange to me. The choice of the company is usually determined by the environment. Product companies can be made by people who have money to support a team. The venture capital market in emerging economies is going through hard times now. Many countries do not even have a good legislative framework for investment, although at the same time these countries have a huge IT potential (Eastern Europe, India). Competition in the outsourcing market is growing every year, which leads to an improvement in services and a decrease in prices. By the way, many of the outsourcing companies turn into product ones, so as far as I can judge this reproof is completely fended off =)

It is also worth taking into consideration the developing culture and business attitude in the country. Some programmers, having worked in outsourcing companies for a long time, start running their own ones. They adopt the experience of project management and development so that the quality improves every year. IT hubs, as well as special economic IT zones, are being created. The concentration of a large number of bright minds in such places leads to a high cultural and professional growth of the entire industry of the country.

Intellectual property theft or personal data leakage. If I wrote this article about 5 years ago, then this could be considered a serious problem, but now you can just do a little research before choosing a partner. You can view the intellectual property regulations by country. In addition, nowadays many companies operate in the American legal field, their head offices are located in the United States, and contracts are signed in several languages ​​with the advantage of the English version.

Communication problem. This, as it seems to me, is the main problem. Indeed, some companies that worked with outsourcing had difficulties in communication, a lack of understanding of the entire scope of the project led to costs increase and missed release dates. There are cultural and linguistic barriers, but each case must be discussed separately. Often, during a full development cycle, these kinds of problems may arise, however, you should read my last article on the discovery phase.

Since the beginning of the IT industry boom, English has been compulsory, so year by year there are fewer communication problems.

As you can imagine, managing outsourcing development is as much a skill as many others. And if you spend a little time on it, then you can get huge benefits:

  • Development costs reducing
  • Technical expertise and it consulting that your company does not have
  • Fast scalability

Create a small founding team on your side so as not to lose control over the development, and ask to use a VPN if security is your top priority.

Due to the dynamic nature of the outsource development environment, teams are made up of groups of people who offer different skills and are disbanded as the project is completed, so they are ready for teamwork.

Look for people who are sociable, open-minded, with good soft skills. Insist on knowing English. Communicating with your entire team, not just managers, will lead to better teamwork.

Do not hesitate to discuss your business problems and look for solutions together, because, as Socrates said, truth is born in dialogue.

Nikita Tretyakov co-authored with Olga Belonozhko.

Kernelics is an engineering company supporting clients with efficient full-cycle development