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IT Startups and Offshore Web Development

Updated on December 18, 2015

Offshore Web Development: a Win-Win Solution for Startups

Although the rise of cloud computing may force IT outsourcing companies to adopt on-demand technologies and set new goals, the global spending on offshore web and application development has already surpassed $ 288 billion.

It’s time to consider outsourcing if…

  • Your business requires in-house IT staff, but cannot afford such expenditures;
  • IT is not on your annual expense budget;
  • Your tech startup craves for newest technology, but has neither money nor expertise in web and custom application development to successfully employ it;
  • Your IT project is of temporary nature.

If you agree with any of the above-mentioned statements, outsourcing is a win-win solution for your business.

The advantages of IT outsourcing

  • Staff and capital optimization;
  • Access to new technologies and top experts;
  • High quality service;
  • Calculable expenses (predetermined by contract and billing plan);
  • Focus on your core responsibilities;
  • Perfect (and fast!) product launch.

What tasks can you possibly outsource?

  • Web and application development;
  • Technical support (often referred to as “help desk”);
  • Email (handling and backup);
  • Malware protection;
  • Server and application hosting;
  • Infrastructure management;
  • Data storage and recovery;
  • Project planning.

Industries that outsource mobile app and website development

  • IT. Top vendors all around the globe face major financial challenges (the Cloud domination, the impact of Asian offshore vendors, etc.). In order to reduce costs of web development, tech companies tend to establish long-term business relations with third-party vendors from Eastern Europe;
  • Finance. Banks and real estate agencies rely on outsourcing in terms of data management, cost reduction and security. The new approach towards banking is determined by consumer expectations, technological advancement and the growing demand for connected solutions;
  • Healthcare. The US government revised Healthcare Organization funding, forcing medical institutions to seek new options to cut IT expenditures. Healthcare startups usually outsource app development (including electronic medical record solutions), provider services’ management, warehousing, telecommunication and security. By 2018, healthcare IT outsourcing market will be worth $ 50.4 billion;
  • Energy and utilities. Oil, gas and mining companies struggle to find a balance between operating costs, the ever-growing global demand for fossil fuels and resource depletion. Top market players tend to outsource software development, as well as infrastructure management, in order to reduce costs, drive quality and improve business environment;
  • Construction and engineering. As a rule, construction companies offshore IT and in-office routine activities;
  • Government. With multiple government services being delivered over the Web, outsourcing is the only way to cut expenses and relieve officials from software construction and maintenance duties;
  • Insurance. By 2020, the total revenue of insurance-related third party contracts in the USA will surpass $ 68 billion. The growth is largely driven by Obama healthcare reform (Obamacare):
  • Media and telecommunication. Outsourced tasks often include graphic content production, data protection and social media management.

Non-development services provided by IT outsourcing experts and companies

  • IT advisory and business analysis. Most startups come up with an idea that doesn’t solve any problem and subsequently fail. IT outsourcing companies provide assistance at all stages of product management, system analysis and facilitation. An expert will also help you define initial customer requirements. Even a minor shift in business strategy may improve your sales;
  • Usability review. Positive user experience predetermines success of any website or user application. It is essential to conduct a comprehensive usability review, paying attention to functionality, navigation, search and error management functions;
  • Code review. One of the key reasons to outsource mobile app and website development is the opportunity to detect and fix coding mistakes made by other vendors;
  • Digital marketing. The main difference between traditional and digital marketing lies in the heavy utilization of technology and media channels (common for the latter). The promotion of a website, service or application requires great content, strong SEO strategy and carefully planned advertising;
  • Software testing. In order to prevent software malfunction, vendors apply two types of tests (static and dynamic). The procedure allows you to detect mistakes in the code/technical documentation and check the results of running tests.

Looking for a reliable outsourcing company

Business tasks of a startup can be outsourced to a freelance developer or an offshore company. There are several pitfalls of outsourcing like disclosure of business data, unexpected costs and cultural differences. I shall cover the most common obstacles of offshore development in my next Hub (the topic is worth your attention, believe me!).

Let’s enumerate the benefits of working with a company:

  • Expertise in full cycle-project management (something freelancers often lack);
  • Outsourcing companies usually have in-house managers and employ various workflow enhancement tools;
  • Vendor teams offer two types of billing plans (“fixed price”, “time and materials”) and share legal responsibilities for potential failures.

Online platforms like Clutch, Elance and Upwork provide detailed information on the world’s leading offshore companies. Here are some tips that may help you find a great developer with great expertise in custom application development:

  • Choose at least 10 vendors;
  • Study their websites, paying attention to user interface, navigation and portfolio;
  • Reach out to the vendors who survived the selection;
  • Evaluate the quality of communication and data provided by sales department;
  • Negotiate the project, set clear goals, monitor your employees’ performance and achieve great results!

Why do IT Startups Fail?
Why do IT Startups Fail?


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