Outsourcing is a shortcut of three words - outside, resource, and using, so it means, in other terms - taking over specific business processes by an external company.
That's a popular method to cut IT, accountancy, supplies, marketing, or training costs when the third-party service provider offers specialist services for business processes.
Thanks to that, the company can focus on the main goal and challenges while the external specialist does their job.
Outsourcing in the IT industry is the most desirable. It is used, among other things, for outsourcing software development or creating websites and applications. Companies don't have to hire an in-house team and be responsible for it.
Of course, not only new companies outsource their IT projects. Companies, which core business isn't based on information technology, also use outsourcing software development.
If you want to learn more about outsourcing, especially in IT, read our article "Why do Companies Outsource IT Projects?" in which we explain exactly why many companies decide to outsource their projects.
It's because non-IT companies prefer not to be responsible for IT business activities.
However, outsourcing is a generic name. It is divided into categories, depending on the location:
One of them is onshoring, consisting of outsourcing projects to companies from the same country. The main advantage of this is location. Onshoring significantly improves the cost structure and allows for great flexibility within the organization. Moreover, coordination and communication are more effective and efficient.
Nearshoring means outsourcing to nearby foreign countries. In general, that method doesn't have any specific advantages, apart from the close location of the service provider company, as mentioned above.
Offshore outsourcing (or just offshoring) is a strategy of ordering services from distant foreign firms and contractors, no matter where they are. The most significant advantages of this solution are quality, cost, and time savings.
Business models are plans that a company creates to generate income and maximize operating profit. Outsourcing has significant economic implications for any business. One method is saving money by outsourcing projects to cheaper companies in other countries. It is what all the most giants in the world do. For example, offshore production outsourcing works in manufacturing when the cost should be the lowest. Thanks to this, the margin of the product can be higher.
That is why many IT companies start working with programmers whose rates are meager. We cannot paint everybody with the same brush, but... Do lower cost and economy go hand in hand with high-quality coding? Not really. And many companies found out about it after the fact.
The main goal of IT offshoring is to increase the quality of the product by cooperating with much better developers from other countries. Not everyone knows that there are countries where developers' education are outstanding. But, it also works the opposite way around - there are countries where coding is on a low level. Most often, the price is adequate to the possibilities.
Where does such a difference come from? The foremost reason is the level of development of the country. It does matter because very often, developing countries aren't providing well-teaching conditions. That's why such developers do not know of the new technologies and current trends. On top of that, of course, there is inflation and the value of money in a given country.
However, software developers from highly developed lands stand out with robust knowledge of the newest technologies, well abilities, and high quality of work. And usually, products developed by better specialists are more successful. They are more perfected and professional, which means more users would love to use them.
Do you know that many popular platforms and solutions are created by using outsourcing services? At first glance, not everyone knows about it, but companies such as Skype, WhatsApp, or GitHub outsource their projects.
However, not always outsourcing refers to the whole project. Everything depends on the needs of the company. Sometimes, it is just developing a new website or re-coding and improving the existing app or platform.
Though, it happens that companies outsource developing the entire IT project from scratch. Usually, it is when someone has a great app idea in mind but doesn't have proper technology resources.
It just so happens that polish developers are at the forefront of world information technology rankings. Where did it come from? There are many IT universities in Poland, so programmers obtain engineering titles and increase their skills. Thus, the number of good developers increases.
Thanks to an excellent education, Poles have been appreciated by giants such as Google and Microsoft, who use offshore outsourcing here. That first-mentioned company is at the stage of opening a new business office in the center of Poland - Warsaw. It will be the most significant Google office in Europe. Inside, it will be developed and management Google Cloud service.
Interestingly, it's already the fourth Google technology investment in Poland.
However, it's not the end. Many information technology companies open their foreign investment in Poland. It happens because offshoring their projects here is a profitable and future-proof move for their businesses.
Moreover, Poland records the fastest technological advancements among the countries of Eastern Europe. There is a technological gap between current Poland and the 1990s. And there is still a rising trend. At present, digitization is ubiquitous at every services turn, starting from shops through public transport to government affairs.
Why is it worth it? The reasons are many, however every point to it, that Poland is a great offshore location.
Firstly, slight cultural differences from the USA. It means that Poles are hard-working people, such as Americans. They are very thorough and detailed, thanks to which their final product is continually refined to perfection. Moreover, Poland is famous as a creative and open country, which means nothing is impossible to achieve.
By the way, everyone knows that project downtime in business is never welcome and increases costs. Meeting deadlines and assumptions results from a great work organization that other countries cannot boast of.
Polish developers place a high premium on communication, both within the team and with clients. They are aware of the process's adaptability and are always looking for the most satisfactory answers.
Our experience working on joint projects shows that good communication is the basis of given cooperation; it solidifies the relationship and influences openness in solving possible problems.
More considerable trust in Poland than in other countries. Why? Where does it come from? The main reason is the development and digitalization of a country. There are many successful IT companies and famous business people here, recognizable in the world.
There is a reason why many foreign companies, such as Google or InApps, choose Polish programmers because they are proven and recommendable.
Many success stories in portfolios from offshore outsourcing contribute to that.
The next one is a suitable time zone. Why? After all, there is a several-hour time difference between the USA and Poland.
That's right, but it is an advantage. Central European Time allows convenient communication between Poland and other countries because work time partially overlaps with others. It's essential during the offshoring project.
Moreover, there's one more advantage: 24-hours work time. How does it work? A team from Poland can work when the American team is sleeping and vice versa! Thanks for that; the task gets done twice quicker. It is possible only in offshore outsourcing.
That's last but not least. One of the essential things in communication is language. Americans will not learn Polish specifically to cooperate with offshore developers. Of course, they don't even need it because English is the primary language of world communication.
But don't worry - Polish education is focused on increasing English skills from an early age. Kids start learning it obligatory in primary school when they have only several years old.
Thanks to that, the vast majority of nowadays the Polish nation is very well educated and has fluent English. It removes language barriers in the global labor market.
To sum up, offshoring is one of the most profitable business methods for companies. However, there is no question of saving money on technology providers. Why? Offshore outsourcing is a future-proof move for the company, where the overall profit counts, not the temporary saving of money.
Moreover, the IT industry is a competitive one, and the amount of competition is constantly growing. It means that companies must invest in good quality products and services, no matter how small their budget may seem at first glance. Low-quality technology deletes the possibility of good company success.
Nowadays, offshore service is the key to success in this industry. More companies realize that outsourcing their projects will help them keep up with competitors, but not everyone knows how these services can be used for many processes or fear it.
The main thing is to go with the time and the development of technology.
Milo founded mDevelopers in 2010, bringing his over 10 years of sales management, B2B solutions, and business relations. Milo acts as the general director, as well as a mentor and advisor. In everyday work besides managing the company, he supports the sales department in networking and building relationships.
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