Are You Missing Out on Outsourcing Risks?

February 16, 2024


Many companies are now realizing the benefits of having an offshore software development team. In fact, the need to hire an offshore software development team has never been as high. But why is this?

Well, for one, the rise of Robotic Process Automation (RPA) has transformed the over-reliance of companies on local talent. It could be due to the emergence of the pandemic and the drastic toll on many businesses.

Regardless of the cause, outsourcing some of your company functions will cut unnecessary costs and avoid certain operational risks. Engaging an offshore team will equally give your company access to skills that aren’t available locally. This will further give your business a competitive edge and offload risks associated with projects.

For example, here at Cloud Employee, we’ve seen the immense improvement in our client’s operations in terms of workforce efficiency thanks to our premium offshore staffing solution.

That being said, there are specific outsourcing trends that your business shouldn’t miss out one. We’ve listed some of them below.

A shift from single to multiple vendor outsourcing

The pandemic crippled many business processes, and offshore companies were affected just like others. This phenomenon led to delayed projects and a truckload of canceled work. A lot of this can be attributed to single vendor outsourcing—which is when a company chooses one offshore company to handle all their software development functions.

Putting all your eggs in one basket can lead to unrest, especially when the offshore company hits a rough patch in their dealings. On the other hand, multi-vendor outsourcing is when the company chooses different offshore companies to handle development functions, designing, ML services, and cloud services. By using multiple vendors, there is a sure spread of processes. Even if one company sinks due to unrest, the others will deliver their services with no hitch.

The rise of digital outsourcing models

The traditional model of outsourcing is steadily fizzling out with time. As time goes by, there’s a more evident shift from human-performed functions to automated machines carrying out the same functions twice as fast. The only human input needed at this stage is to monitor the work at every step.

Process over price

When a company is outsourcing, the usual process is to get an offshore company that meets their pricing needs. This method has worked pretty well since the emergence of outsourcing until now. Nevertheless, there’s a handful of companies that are more result-oriented to the detriment of pricing. For the most part, they are now focusing on the results the offshore company offer and their working attitude towards the development process.

The emergence of new offshore companies

The pandemic has made it imperative for companies to outsource to cut down costs while maintaining productivity. Many companies have let go of in house staff and are contracting external parties to perform functions.

The rise of outsourcing during the pandemic has seen other countries picking up immensely. Ukraine, China, Poland, and developers in the Philippines are in high demand. This new development creates competitiveness among offshore companies and jobs in struggling places.

A shift from short term to long term outsourcing

A while ago, companies were only interested in outsourcing specific projects; especially those that were long-term. But once that was done, the silence hit, and there’d be nothing to do until something new came along. These days, companies are hiring offshore teams on a long term basis to perform wholesome functions that sometimes last for years before the contract ends.

New Processes Businesses Need to Implement To Succeed in Outsourcing

Generally, tech businesses are constantly faced with the risk of unforeseen events. Let’s use COVID-19 as an example; many organizations had to reconsider their stance on outsourcing.

Based on that alone, controlling an offshore software development team can be challenging. Some pitfalls associated with outsourcing include limited control over development processes, communication gaps leading to miscommunication, and, in certain instances, extra costs incurred to keep up with the development processes in person.

Below are some processes companies can implement to attain resilience while outsourcing post-pandemic;

  • When drawing up an outsourcing contract, ensure that there’s are strategies in place in case there’s a disaster. This will help smoothen the flow of work.

  • Monitor your outsourced projects using active dashboards. Remember how COVID-19 facilitated a rise in the work from home culture? This led to the disbandment of teams because they had to work on their own. To prevent this, look out for a suitable, real-time dashboard to help manage your projects.

  • Allocate resources for high priority projects as soon as possible and when the need arises. This will ensure that you are never caught unprepared if a crisis like COVID 19 strikes again.

  • Try as much as possible to digitize your processes through mobile apps. This ensures that you aren’t rooted in a particular location or restricted to a desktop. Also, you will be able to keep an eye on things wherever you are.

Altogether, it is essential to evolve with global trends, regardless of your industry. One such direction is outsourcing, which has been an outlet for companies looking to cut down costs. These days, it is an impactful business process that every company needs to indulge in to get competitive and result-oriented projects that meet global standards.

Also, bear in mind that outsourcing is evolving just like everything else. Specific trends associated with outsourcing are gradually fizzling out and adapting to suit the ways of the current business processes. If you’re not new to outsourcing, evaluate your existing contract to ensure you’re in the right place.

We hope you found this article useful. Here at Cloud Employee, we assist companies looking to hire dedicated offshore developers in the Philippines, who are skilled across many technologies. Talk to us, learn more how Cloud Employee works, or see our Developer Pricing Guide.