Latest trend of Software and IT Outsourcing

Outsourcing software development to countries like Pakistan has become increasingly common due to its highly skilled workforce, cost-effectiveness, and favorable business environment. However, finding the right outsourcing partner in Pakistan can be a daunting task, especially for businesses that lack experience in outsourcing.

This article will delve into the latest trends of software and IT outsourcing, the benefits of outsourcing to Pakistan, and how to find the best outsourcing partner in the country.

Cost and Benefit Analysis

Hiring in-house teams is pretty expensive and requires considerable time and money to develop such a caliberious team that can bring fruitful results. Outsourcing, on the other hand, saves much cost and effort that goes into managing the whole project. There are a lot of benefits of offshore team outsourcing, for instance it helps businesses tap into a global talent pool. Moreover, it lowers labor costs, improves efficiency, and gains a competitive edge in an increasingly globalized market.

Comparative Analysis

In a study led by industry experts, outsourcing can reduce 15% to 20% cost. While both in-house teams and outsource teams have their own pros & cons and have several challenges, outsourcing has proven to be more fruitful in comparison to the project handover to in-house team.

Especially, when it comes to performance measure and quality control, outsourcing has many advantages over the other side.

Following are the key factors that helps us evaluate the performance in either of the two options:

Cost Factor: Hiring in-house team for working on IT projects is costly and requires huge capital investment. On the other hand, outsourcing is better for saving substantial costs than hiring a team for the project.
Time Factor: On average, the time required to hire a talented in-house team is four times that of the time it takes to hire an outsource team.
Risk Factor: In-house team requires consistent handling of issues related to the ongoing project, but outsourcing this task can relieve a significant amount of risk involved in carrying out the project.
Efficiency Factor: Outsourcing team members are much motivated because they get the opportunity to work at an international level. This in turn, enhances the focus of company management to its core functionalities.

In-house team may put extra bit of work pressure and may divert focus from the core functions of the company’s management.

Availability & Promptness: Outsource team can start working straight away, while in-house team may face a lot of challenges while initiating a project.
Level of Motivation: In-house team members need consistent training to keep them motivated. While, outsourcing team members don’t need as much extra motivation to perform better.

One of the major challenges you could face is finding the suitable resource through outsourcing is something like “ finding a needle in a haystack”

Of course, the success or failure depends on the selection of the outsourcing team that will work better or worse than expected. Therefore, the selection of the most caliber and talented team is the biggest challenge for the company that is seeking to outsource.

| Caution | - Outsourcing Can Be a Challenge- How?

You can risk your brand name with outsourcing, which is quite a sensitive issue. Here are some important considerations you should be aware of to ensure a successful outsourcing experience.

Customer Satisfaction- It takes time to make a trustworthy brand name that involves a long process of service delivery to customer satisfaction.
Their Trust May Decline- Once you attain the customers trust, you should make an effort to retain it. As customers trust the company but if they get to know the resources are contracted out they could lose their confidence, for so many reasons.
Quality Assurity- They can be insecure about their confidential and exclusive data and can't handle it in the right way. And yes, the difference in service quality could also lead the customers away.

A simple solution to this problem is, outsource only the necessary resources and don’t compromise on the skills level and talent you require. Check the communication barricade beforehand.

Why Outsource Software & IT Services When an In-House Team Is There?

Well, that question is valid. Firstly, the important point about outsourcing needs is not necessarily at the cost of firing in-house Software & IT professionals. Some urgent need of getting the project done in a short span of time might be one of the reasons that necessitate the need to outsource some talent.

Though the reasons for opting for the outsource option are manifold, we will discuss only the major ones here.

1. Significant Reduction in Cost and Efforts to Manage In-House Team

The cost and efforts to manage in-house teams and other expenditures will put significant savings to the company rendering outsource services. As mentioned earlier, in-house teams usually demand much higher compensation including ample increment each year.

Furthermore, the Admin or HR staff gets more burden to manage in-house teams and it is coupled with multiple environment related problems. Savings in both costs and efforts are one of the major reasons why companies are switching to outsource Software development and IT services.

2. Getting started with the project straightaway

According to research, the average time it takes to hire IT professional ranges from 51 days to 56 days in the world. This seems too awkward to waste a huge amount of time when you need to begin a project on an immediate basis.

Outsourcing solves this problem quite sensibly and helps you to keep your clients satisfied with quick services.

3. Diversified Skills and Plenty of New Ideas Sharing

Projects that require unique ideas and plenty of expertise is one of the biggest concerns that company owners and senior management are expressing related to their junior staff. The trick is simple: More bountiful ideas generate when more skilled brains are involved.

Outsourcing provides this opportunity to hire a team of diversified skills to make unique product design and develop something new with more interesting features.

4. Work Efficiency and Performance Boost

Setting up 24/7 working hours enhances productivity. This is only suitable and possible for the organizations where the business is tending to expand. Especially in this modern era, where several small companies are emerging into medium and large size organizations, outsourcing becomes a necessity to meet the urgent need of skilled professionals.

Furthermore, this will pull down the burden from management who can focus more on performance building measures and, hence, overall productivity can boost substantially

Comparative Analysis of Outsourcing Rates

According to an authentic source, software development employees get annual pay between $80,000 to $130,000. While the statistics for IT staff is even higher. On the other hand, outsourcing the software development will cost on average $30 to $50 per hour in the USA.

While hiring the same outsourcing software developer from Eastern Europe costs $25 to $50 per hour. Hiring from Africa costs $20 to $40 per hour. The highest savings comes from the Asia Pacific region which costs $18 to $38 per hour. On average, outsourcing from the Russian Federation costs $33 per hour.

Outsourcing from Far East Asian countries costs $24 to $30. More specifically, Pakistan is on top of the figures that charges the least but provides world class outsourcing in software & IT services. Pakistan has tremendous potential to excel in the IT sector in the future. The 5G technology is just coming to Pakistan that will boost this country to the top in the Asian Pacific.

Global Outsourcing Trends

The strongest demand in IT revolves around some key players who have significant opportunities to work globally. They are developers who work on backend cloud, web, iOS, Android, and MySQL. Backend web/cloud developers have twice as much demand as developers of MySQL.

The 12 major countries that contribute on top outsourcing destination in software development are:

From Eastern Europe: Poland (average hourly rate $38), Romania (average hourly rate $44), Ukraine (average hourly rate $37), and Russia (average hourly rate $33).
From South America: Brazil (average hourly rate $47), Mexico (average hourly rate $39), Argentina (average hourly rate $41), and Columbia (average hourly rate $46).
From Asia Pacific: China (average hourly rate $24), Philippines (average hourly rate $28), India (average hourly rate $21), and Pakistan (average hourly rate $18).

Emerging Trend of Software and IT Outsourcing in Pakistan

Especially in the IT sector, Pakistan has become one of the favorite nations to provide outsourcing services. In the last four years, the IT industry has grown by 100%. In 2016, the country’s IT industry was worth $3.3 billion, which was increased to $3.5 billion in 2017.

By next year, it further increased to $4.1 billion. Last year in 2019, it was worth $6.5 billion. These statistics indicate that the figure will surely cross $7 billion in 2020. The revenue from e-commerce is expected to reach $1 billion by this year. From 2016 to 2019, the IT industry export has doubled its worth.

Pakistan's IT outsourcing industry is on the rise, with a projected steep increase in revenue over the next five years. Major software brands from the USA, UK, Germany, and China are increasingly seeking IT services from skilled developers in Pakistan, and the e-commerce sector has played a key role in the industry's growth, contributing to a total worth of $1 billion.

According to research, Pakistan is now ranked fourth globally as a top outsourcing destination, thanks to the immense talent of its IT professionals and its readiness for 5G technology.

What Makes Pakistan Favorite for IT Outsourcing Services

A large number of Skilled people has proven Pakistan to be a country that can become the top outsourcing service providers in Asia.
One major reason for Pakistan becoming the future of outsourcing hubs is the lowest Service charges. In fact, this meets the first major goal of outsourcing (i.e. reducing cost by a substantial amount).
Pakistan is the 4th largest English speaking nation. This fact put it at a prominent place on the globe. Quick and responsive communication is the key for getting the desired outsource team, so you can keep in touch with the team progress.
Perhaps one of the best reasons is that Pakistan already has fast and reliable internet services. With the initial successful test of 5G technology in this country, outsourcing services are likely to become top notch in the world-share by next few years.

Things to Consider When Choosing the Best Outsourcing Team in Pakistan

The process should be quick and responsive
They can think out of the box: talented and innovative
Must possess expertise and knowledge about their core work
They must have thrust to excel in IT as compared to industry expert
They must have a backup plan for any inconvenience or urgency
Must have team members of diversified background and experiences

At the End,

As a leading mobile app development and other software and IT solutions provider in Pakistan, SUAVE Solutions has such dedicated software development teams that have top-level expertise in providing software and IT solutions to companies seeking to outsource software & IT related projects.