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Reducing Cost With Outsourcing

Peter

Feb 27

Cost reduction is one of the many benefits related to outsourcing. Going for an outsourcing team can save you more money rather than temporarily hiring several employees. Hiring individuals temporarily may fill the short-term needs of certain projects, but in the long-term, it fails to save money. When it comes to in-house hiring, the need for specialized and quality team members can be expensive and take a lot of time. And as we all know, time is money. This is the reason why many companies choose to outsource their tasks or projects to another firm in order to avoid having to spend a fortune on additional resources.

How does outsourcing actually reduce costs?

It is true that companies can save up to 30% on operating costs by outsourcing their IT projects. These savings don’t only take into account the contract itself. It also includes all the money that the company spends in the transition process from working in-house to outsourcing.  Outsourcing companies also give cumulative discounts to long-term partners. This depends on the quality of the relationship between the company and the outsourcer.

Business Discussion Talking Deal Concept. Outsourcing contract. Addria software development Balkan

Outsourcing to Croatia or outsourcing to Serbia can also increase the percentage of the cost. Not only because of the relatively cheaper labor but because of the skilled IT experts that can deliver a high-quality product in a reasonable time. Addria has got an ambitious team with a diverse set of skills and years of experience in outsourcing IT projects. Experience and reliability are valuable factors that increase general productivity which contributes to savings.

Also, hiring and forming in-house can be pretty expensive. There are always additional costs for additional training. Not to mention that hiring and building a productive team can be extremely time consuming. Outsourcing companies always have a pool of proficient and talented developers with enough experience to immediately tackle any new projects.

Team of developers working on an outsourcing project. Web development Outsourcing.  Addria software development Balkan

How much can a company save up?

Optimizing through moderating capital and re-evaluating budgets can always reduce some costs. Since the needs of in-house departments can change, tracking the ways in which money is being spent can help a business cut cost up to 10%. But according to Harvard Business Review, reducing cost up to 20%-30% while outsourcing is possible. There are many tasks, like building a custom CMS, that are very time-consuming and expensive to be done in house.

Cost is important, but what else?

As previously mentioned, cutting costs is the reason companies opt to outsource most of the time. But there is much more to outsourcing than just the amount of dollars being saved. The other three important factors are quality, time and communication with the outsourcing partner.

Companies sometimes make a decision about choosing their partner based on the lowest offer. The cheapest doesn’t always mean the best. Quality should never be overlooked, even though cost-cutting is the most common reason for outscouring. After all, your product represents your company. If your product is not fast enough, confusing or full of bugs, customers will surely lookout for something better. Hiring the cheapest team will save you money today, but will cost you customers later.

The way you communicate with your partner can also influence the productivity of the project development. Communication should be as straightforward as possible. More time means more money. So, the more time you spend planning and communicating, the longer it takes for the project to be finished.

Companies making an Outsourcing deal. Addria software development Balkan

There’s one more trick outsourcing has got up its sleeve - time zones. If your outsourcing partner is on the other side of the globe, continuity in your work could increase. When the workday in the US is done, it is about to begin in the Adriatic region.

As mentioned before, Addria has year-long practice and experience in outsourcing web and mobile development. Our motivated team of developers and designers is always ready to work with you on your dream project.