What are the disadvantages of IT

Advantages and disadvantages of IT offshoring and outsourcing

The pros and cons of IT outsourcing have been discussed for many years. Still, it is difficult to give a clear answer as to whether or not a company should outsource software development to a party other than offshoring.

First, let's find out the difference between “Outsourcing”, “Offshoring” and “Nearshoring” as it is also very important to understand that these three terms are different and not synonyms.

Outsourcing - this term means that some operations and work are carried out by another company instead of your employees.

Offshoring - this means that you are entering into a contract with a third party company in another country so that this company can carry out / provide various types of operations / services.

Nearshoring - means the outsourcing of business processes (mainly IT processes) to companies in a nearby country, which probably also has a border with your country. Roughly speaking, nearshoring is a special type of offshoring. For example, the nearshoring countries for Germany are Belarus, Poland, Ukraine, etc. For the USA, these are Mexico, Brazil, Argentina, etc.

Now that we can understand the difference between the terms, we can move on to the advantages and disadvantages of software development outsourcing.

Benefits of IT outsourcing

Reduced costs

In fact, those companies whose management choose to outsource IT choose this option because they can actually save money. The cost of software development is quite high these days, especially when you need someone with a high level of expertise. And if you do not need such a specialist all the time, you can only pay for what you need and only when you need it.

A wide range of qualified resources

Every time you hire someone, you are only acquiring the skills that person has, and while the person is genuinely qualified, they may lack the expertise required for a particular project. So when you choose IT outsourcing (and offshoring) you are opening up a wider range of talent around the world.

You no longer need to hire employees

Outsourcing IT is a great alternative to hiring additional staff in-house, especially if you feel that hiring is not absolutely necessary. You only pay one contractor and consequently have extra cash for other business expenses.

They give your internal team more freedom

When you outsource some work it automatically means you are giving your own team more freedom. While the work is being done by a remote team, your developers don't have to work long hours and they can really focus on their own tasks. This allows the company to go first class in delivering its core product.

Disadvantages of IT outsourcing

The corporate culture is negatively influenced

When running a business it is very important to consider not only the advantages of IT outsourcing but also the disadvantages. It is often said that a remote team can negatively impact corporate culture.

As long as the work culture in the company is positive, employees will continue to work productively. So it is of the utmost importance to maintain such an atmosphere. So don't be afraid to talk to the affected employees.

You can lose control

When it comes to IT outsourcing, even if you yourself provide guidance on what to expect, you need to give up some of the control. Because the contractor is off-site, it can be difficult to maintain the level of control you expect.

Problems with communication

Obviously, it is more difficult to arrange frequent communication with a remote team than with an on-site team. It also depends on the person who handles the communication on the outsourcing side, on their communication skills and reliability.

As long as the way of communication is the same and the time intervals in communication work well - then you don't need to worry and there will be no problem building a friendly and productive relationship. In other cases, the communication process can lead to problems and disappointments.

Nevertheless, you can discuss all of these questions (frequency of communication, communication channel, etc.) before entering into a contract. And this problem becomes quite an obstacle when your remote team is in a different time zone and the time difference is 8-10 hours.

Problems with quality

While IT outsourcing has many benefits, it is only worthwhile if the work done is of high quality. If the results are not what you expected, it can lead to complete frustration.

Of course, this does not mean that the external team cannot cope with certain tasks. However, it is recommended to discuss the expected quality in advance.

Conclusion on the advantages and disadvantages of IT outsourcing

As you can see, there are many advantages and disadvantages of outsourcing software development. The key to success is as follows: Research and analyze all the pros and cons before embarking on something that you can only regret in the end. That shouldn't be an easy decision. Also, think not only of the profit your company will make from IT outsourcing, but also of your employees, since offshoring also affects your on-site team. If you are ready to outsource IT, don't hesitate to contact us.

One of our C-level managers who encourages our company to achieve new development goals. He focuses on the quality of the work done, ensures that work with clients is proactive and motivates the team.