6 myths around third party services in the it industry
When undertaking IT projects, companies consider multiple options when it comes to the actual development. Decision makers must base their call on time-to-market and productivity, without losing sight of performance and quality. One of these alternatives includes outsourcing or managed services, nonetheless companies’ biases tend to play against this method.
Here below, we share some of the myths and truths around third party services in the IT industry:
1. “It’s more expensive”
Decision makers believe that outsourcing software development generate higher costs as opposed to hiring an inhouse team, especially when technology is part of the core business. When the requirement is thought of as long term, the cost of maintaining a team is covered by upgrading and support activities thus getting an outsourcing partner out of the table. However as the company grows, tech requirements expand along demanding more capability in terms of development across different technologies and timeframes. It is on this maturity level that it is wise to play the “outsourcing card” with a staff augmentation approach. If the company has a core leadership team, sub-hiring developers for a definite project might be less expensive than incurring on high recruitment and maintenance expenses. No to mention the opportunity cost related to the agility that a third party specialized in IT recruitment might provide. When it comes to MVP development, hiring a local end-to-end team might be more expensive than hiring a third party with a hybrid model (mix of local and nearshore) that assigns and manages resources in accordance to the stages of development.
2. “There is no control”
Perhaps one of the most popular, companies have a strong perception of losing control whenever they consider outsourcing. When it comes to IT, this reduces to the partner’s service methodology. Broadly speaking, different agile methods like Scrum are applied in order to optimize feedback and integrate the client’s team throughout the development cycle. This is normally done by delivering periodic deliverables, encouraging the client to review and approve them prior to the start of every stage via collaborative tools.
3. “Work is not effective”
Not having control on development might be related to not having a fluent and effective service. Yet, this is where third parties generate the most value. As they focus on building the right team or assigning the best developer to a project, they generate a complementary expertise in regards to maintaining them and comply with the timetable. In this order of ideas, IT partners apply different strategies to reduce the risk of termination or rework by, for example, monitoring performance using tracking tools or assigning an IT leader to developers. Moreover having a strategic long term partner helps exploit the learning curve better and proactively train a talent pool based on the co-developed know how.
4. “There is no commitment”
Another strong myth would be that external teams are not as committed to the project as employees. Although is only logic to believe so, our experience as an IT service provider has proven this myth to be wrong. For instance, in NativApps we focus in understanding the cause of the project and the client’s business process in order to consult as opposed to only providing resources. Moreover, we invest on generating a collaborative working environment in order for the projects know how to remain on the collective and not on the individual. Again, this demystification depends on every partner service character.
5. “Communication is going to be hard”
Technical leaders might be reluctant to agree on outsourcing a project because of the idea of virtual communication. Not being close to developers is associated to lower responsiveness. Although sharing corporate culture and space fosters collaborative work, when it comes to IT much of the work is done virtually. Technology has evolved enough to provide digital spaces for co-creation as videocalls applications, cloud services to manage shared information and follow-up channels. Thus, IT leaders have control over the project in real time.
6. Outsourcing = India
Being a super power and pioneer in technology services, India ranks first in the top of mind of decision makers. Their national investment in promoting their wide ranging IT talent, makes it difficult to see beyond their borders. However, there are emergent service providers in geographies like Latinamerica that are compelling given natural advantages such as time zone and cultural similarities that generates proximity and facilitates long term partnerships between companies and third party service providers.
Now that we have addressed these 6 myths, are you ready to start co-develop your IT projects? In NativApps you will capitalize on all the benefits of nearshore outsourcing and develop a strategic relationship to develop optimally all your digital products; you will receive daily reports, constant consulting and a full dedicated team to your project. Get to know us!
