Outsourcing myths debunked: What you need to know

Do you want your business to grow faster, but are hesitant to cooperate with external IT teams because of many misconceptions about them? In this article, we will debunk the most popular outsourcing myths. You will learn the truth with real examples and get practical recommendations on how to choose the right outsourcing partner.

The most widespread outsourcing myths: Are they true?

There are a lot of preconceived notions about outsourcing. Further, we will overview the 6 most popular ones. What are the most widespread myths about cooperation with partner companies? Are they true? If not, why? What are some real examples that confirm the truth or falsity of popular myths? Find out the answers to all these questions in the article below.

Myth 1: Businesses choose outsourcing only to reduce costs

This misconception appeared because saving the budget is indeed a very common reason for outsourcing. According to the statistics, 59% of business executives state that cutting costs was why they had chosen to turn to external specialists.

The truth

Cutting costs is not the only reason why organizations cooperate with non-staff professionals. Here are some other benefits of outsourcing thanks to which companies choose this work format:

• Becoming more flexible and adaptable. 21% of all the organizations that order the services of partner IT companies assert that the reason for this is gaining more agility and adjustability to market changes. Preferring an external team to an internal one allows you to get instant access to a variety of skills and technologies, change the scope of ordered services, and adjust the overall strategy of work if necessary. All this allows the business to be more adaptable to changing conditions and, consequently, more competitive.
• Getting access to diverse expertise and skills. Good outsourcing companies usually have a wide range of employees with a variety of skills on their teams to meet the needs of any client. If your in-house employees are not competent enough to perform some specific tasks, you can always turn to external partners.
• Bringing innovation to business. Collaboration with external teams gives an opportunity to bring fresh ideas and perspectives to the fulfillment of IT tasks. In addition, outsourcing companies often keep a close eye on the latest technologies to stay competitive. If you've been looking to bring innovation to your business, working with a partner IT company may be a good solution.
• Speeding up the workflow. You can get as many specialists engaged in your project as you need. In doing so, you don't have to spend time researching, hiring, and onboarding new in-house employees. In addition, if your project is urgent, some companies offer cooperation with IT specialists from different time zones to work 24/7. Moreover, many outsourcing teams use the latest technologies to automate some tasks and optimize workflow. All of this gives the opportunity to bring your business ideas to life faster.

A real-life example

GitHub, a platform known to every IT-related person, ordered the services of outsourced professionals. The reason for this was not to make the work process cheaper but to speed it up. Wanting to get the MVP version of the product as soon as possible, the company decided to turn to external backend specialists who were ready to complete the tasks as shortly as possible.

Myth 2: Outsourcing professionals’ work is cheaper but of lesser quality

This myth appeared due to the fact that some organizations that want to cheapen work processes very much, turn to unreliable and low-quality outsourcing companies, the only advantage of which is a very low pricing policy. Therefore, many have begun to believe that cooperating with external specialists is always a compromise in quality in favor of a low price.

The truth

More than half (54%) of organizations say that they didn’t lose in quality after choosing to outsource their tasks. And some of them even state that it has become better.

So, if you choose an experienced and reliable partner, you can even improve quality rather than lose it. Good outsourced IT companies are meticulous about the quality of their work. They:

• have strict quality standards;
• conduct rigorous quality control at every stage of the work;
• always keep their customers informed of the work they have done;
• are open to making edits and adjustments to cater to the clients’ needs as accurately as possible.

A real-life example

A well-known American chemical and pharmaceutical corporation had a challenge related to the quality assurance of its IT products. As a solution, they chose outsourcing quality assurance to establish and improve their testing processes.

The experts from Devico have developed a well-designed and stable test infrastructure based on keyword-driven methodology with more than 1700 tests that support 4 browsers. The testing platform helped enhance the quality of products and shorten the time the QA phase takes. Learn more details about this case here.

Myth 3: It is impossible to control the work of an external IT team effectively

The reason for this myth is the fear of some companies to trust professionals who are located far away. Many conservative managers believe that only those employees who are in the same office with them can be effectively supervised. They are afraid that the work of remote employees, who are often also based in another country, may have unpredictable results.

Truth

If you choose a responsible IT company that values its reputation and build the right relationship with it, you will be able to effectively control the work at every stage. To do this, choose a partner with multiple positive reviews from other customers. Also, when selecting a company, clarify in advance how communication takes place during the work. Before you start collaboration, make sure to sign a contract in which you will agree on all the details of the workflow and communication.

When you have already started cooperating, do not forget to always stay in touch, hold regular meetings, and request progress reports. In this way, you will always stay on the same wavelength and will be aware of the work done, which will allow you to rest assured that you are going to get the best result.

A real-life example

Devico, one of the most reliable software development outsourcing companies, cares about organizing a convenient and effective communication process with customers. Partnering with us, you will be able to easily manage an external IT team, thanks to:

• regular meetings (weekly or daily);
• detailed project reviews;
• commercial performance reviews.

Myth 4: Cooperating with a partner company is very risky and offers no guarantees

This myth has emerged due to the fact that assigning IT tasks to external professionals can really be associated with some risks, such as:

• communication issues;
• barriers, such as language or culture;
• problems with data security.

However, are these risks so scary, and can they be mitigated? Let's find out whether the myth that outsourcing is so risky that it should be avoided is true or not.

The truth

Managing outsourcing risks is real. The main thing is to use the right methods for this, such as:

• Choosing a partner carefully. Before starting a full-fledged cooperation, make sure that the company is reliable. Check testimonials and success stories from other clients and try to start cooperation with a small pilot project.
• Signing a detailed contract. Specify in the contract all the details of your future cooperation: what services and in what volume you are going to order, in what amount and how often you are going to pay for the services, how and with what frequency you are going to communicate, what are the deadlines of your project, etc. Also, if necessary, you can sign an NDA to protect the confidential information you share with the outsourcing company.
• Building the right relationships. Maintain comfortable and regular communication with your partners to stay on the same page. Communicate both in writing (via messengers or email) and verbally (via audio or video calls). Hold regular meetings to discuss work issues. Request reports to track progress and improve the results.

A real-life example

Outsourcing risks may be higher if the client company operates in a specific area, such as, for example, fintech. However, even this does not stop many large organizations from cooperating with external specialists.

Bank of America is one of the companies that outsource software development and other back-office tasks. It cooperates with large and trustworthy outsourcing companies that perform tasks in good faith and guarantee the security of sensitive data.

Myth 5: Outsourcing part of the work has a negative impact on in-house employees

Some HR professionals and managers believe that working with outsourced specialists can demoralize in-house employees. It is believed that they may feel unappreciated, unnecessary, and not competent enough, which will contribute to their faster burnout and lower productivity.

However, this is not true. Practice shows that outsourcing part of the tasks, on the contrary, increases the productivity and efficiency of the in-house team. Why and how? Find out further in this article.

The truth

Outsourcing some of the routine second-priority tasks can free up in-house employees for more creative and strategically important work. For example, the in-house IT team can be engaged in product development, while outsourcing partners can do testing and support.

Not having to spend a lot of time on routine, boring tasks will help in-house employees stay energized and prevent them from professional burnout. In this way, you can increase productivity and optimize processes. This will have a positive impact on the whole company.

A real-life example

MINT, an AdTech company from Italy uses the services of outsourced specialists to improve and optimize its work processes. It has its in-house IT team, however, so that full-time employees can fully focus on development, the organization has decided to hire external professionals to take over quality assurance.

It was important to the company that the QA specialists from the outsourced team were able to work within an agile methodology. When they chose Devico, they were not mistaken. Devico's experienced QA specialists work closely with MINT's in-house developers to ensure that the code created during each sprint is bug-free.

Thanks to the coordinated work of in-house and outsourced specialists, the company continues to grow and achieve success. It was listed as one of the most interesting digital companies by Business Insider and has received the Best Digital Platform award at the Italian event called NCDigitalAwards.

Myth 6: Only large businesses should choose to outsource

Some believe that this model of work is suitable only for those businesses that have such a huge scope of work that there is a need to engage external specialists in addition to the in-house ones. However, this is completely not true. Many small businesses and even startups use this format.

The truth

Outsourcing is beneficial for companies of all sizes. For small businesses, it offers a great opportunity to optimize resource allocation and save budget. Additionally, using external specialists to perform IT tasks allows in-house employees to fully focus on core business operations and thus accelerate the growth and development of the company.

For startups, using this format of work is a great opportunity to gain time and get ahead of the competition. Outsourcing teams can develop a project in the shortest possible time, thanks to:

• clearly optimized processes;
• using the latest technologies;
• automation of some tasks;
• if necessary, even involving specialists from different time zones to work 24/7.

So, outsourcing IT tasks gives an opportunity to save time and budget, as well as focus on business goals. It can bring success not only to large organizations but also to small businesses and startups.

A real-life example

MemoMeister, a German SaaS startup, decided to turn to an outsourcing company to develop the project from scratch. This was quite advantageous for them, both financially and for reasons of tight deadlines.

7 engineers and a software architect from Devico developed a high-quality and well-thought-out document management platform. They took into account all the client's wishes and implemented all the necessary features. The company has launched its project according to the plan and already has its first success in the form of thousands of users in Germany and other countries around the world.

Cooperating with an outsourcing partner: Step-by-step recommendations

We have already dispelled popular myths about outsourcing and discussed its advantages with real examples. However, to experience only the benefits and positive aspects of this work model, it is important to choose the right partner and build a correct relationship with it. How to do this? Find step-by-step recommendations further in this article.

Step 1: A careful choice

Choosing a reliable IT company for cooperation is the very first and, at the same time, the most important step. To make your cooperation successful and problem-free, give due attention and time to finding and evaluating the right partner. When making your selection, pay attention to the following factors:

• testimonials, success stories, and recommendations from other clients;
• the spectrum of services the company provides;
• the expertise and skills of its team members;
• the technology stack used;
• pricing policy.

Step 2: Setting clear expectations

To get a fully satisfactory result, you need to set clear expectations and goals. Think about:

• what kind of tasks you would like to outsource;
• how and in what period of time they can be accomplished;
• how results can be measured (establish specific metrics to evaluate success).

If you have difficulty in defining your goals due to a lack of IT expertise, you can seek IT consultation. Experts can help you turn business ideas into a clear plan of action.

Step 3: Signing a contract

When you have already selected a suitable partner for cooperation and defined your goals, there comes one more crucial step: to sign the contract. To avoid any misunderstandings, as well as to minimize risks, it is essential to document your agreements. In the contract, specify all the points that are important to you, for instance:

• what scope of services you are going to order;
• what is the price of certain services and what is the budget for the whole project;
• how often and in what form you want to receive the results of the work;
• how your communication with partners is going to be organized;
• what success metrics you are going to use and what metrics you are aiming for;
• what the project timeline is.

In addition, if your industry is related to sensitive confidential information that your partner will have access to, you can additionally sign an NDA. This will help avoid risks associated with data leakage.

Step 4: Establishing and maintaining relationships properly

To ensure that the process of cooperation and the results of the work don't disappoint you, it's important to engage with your partners in the right way. Here are some recommendations on how to do this:

• hold regular meetings;
• keep in touch via messengers;
• request regular reports;
• assess the intermediate results with the metrics you’ve set;
• give detailed and timely feedback to improve the work process.

Conclusion

There are a lot of misconceptions about outsourcing that can prevent some companies from choosing this work model. However, the majority of them can be easily debunked if we look at some cases of successful cooperation with external IT specialists. Multiple outsourcing success stories provided in this article prove this.

If we study the experience of many companies, we realize that:

• While many people think outsourcing is only about saving costs, it brings multiple other benefits, such as saving time, gaining more flexibility and scalability, getting instant access to diverse skills and expertise, adding innovation to business, etc.
• While some believe that choosing this work model can lead to a loss in quality, in fact, in many cases the quality remains at the same level and sometimes even improves significantly.
• While it is often thought that it is impossible to control an outsourced team effectively, it is real to do this in the case of choosing a reliable company and establishing proper relationships with it.
• While some companies are afraid of outsourcing because of some risks, it is easy to mitigate them if you know the right methods for this.
• While some organizations think that outsourcing can hurt the in-house employees’ morale, in reality, it can even improve it.
• While there is a myth that this work model is only for large companies, it brings multiple benefits to small businesses and startups.

Discover all the advantages of outsourcing with experienced and reliable professionals from Devico.