What is Outsourcing and Why is it Done?

Outsourcing IT services to the third party vendors has become more prevalent nowadays.  This service allows the business leaders to concentrate on the core part of the business operations.  There are many IT outsourcing companies in the market and choosing a reliable one among them is important to carry out your job without any discomfort.

Outsourcing companies offer a wide range of specialized service as per the needs of the clients. Initially information technology and business process companies were outsourcing their certain tasks. Now, improved technologies have made other sectors also to opt for this option. Offshore outsourcing companies in the developing countries is the best choice among the companies outsourcing their work because of the less operational and labor cost.

Software Outsourcing Companies

This type of outsourcing companies caters to the needs of the offshore and local business clients. It is essential for every company to offer international standard quality products at an affordable cost.  In this competitive world, the need for skilled professionals is vital to achieve the set of goals in the specified period of time. These companies consist of vast pool of IT professionals having enormous knowledge, which helps in increasing the productivity of the company.

software outsourcing companies

The companies who are seeking outsourcing firm’s services have benefited in many ways and they provide solutions to your complex business structure by means of innovative methodologies.  Offshore software development service providers provide an array of business solutions such as ERP, SCM, CRM, marketing software solutions, business intelligence software, and sales force automation software. The outsourcing company not only helps you to provide better strategies for the business plan, but also helps to meet your goals on time.

A contract is signed between the outsourcing company and the client and it describes about the total cost of the project, time frame and other technical details about the software project. The company allocates a team of professionals as per the project and the client also evaluates whether they are skilled enough to carry out the job. The final software product is engineered according to the requirement and full satisfaction of the client.

The risk involved in outsourcing business

A company usually outsources their works to cut down the costs which may reduce certain overheads and generate more profit. Like any other business dealings, it requires lots of research and planning.  You must be aware of the risk involved in the process.

Sometimes a wrong choice of customer will not only take away the time, but also your money. Often language and cultural differences may hinder the business relationship which can delay the works. The cost of setting up an outsourcing project is high, so you have to take a decision on the contract after considering the pros and cons of it.

Before signing a contract with a company watch out for following things:

  • Analyze the client database well starting from their official website and the years of experience in this field.
  • There might be some hidden charges like infrastructure development and travelling costs. Check whether all the information is included in the contract or not.
  • The terms and conditions specified by the client must closely match your interest. If not so, then it is better to cancel the contract.
  • Must be in a position to handle intellectual property issues 

Outsourcing policy 

Before commencing the outsourcing work, it is best to form a strict outsourcing policy to reduce the losses. The IT outsourcing companies must always try to concentrate on the competitive functions of the customer. Offshore companies at all times have a problem with fluctuating currency conversion rates and it determines the profit and loss of the business deal.

A strong outsourcing policy helps to achieve your business goals in a specified time.  Clear communication and planning will help you to outshine your business dealings.

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About the Author: Shameem

I am Shameem, Software Engineer, Web Addicted, Living in Chennai, India.


  1. Great info Shameem. I have read many posts of yours and you write very well. keep up the Good work and thanks a lot for sharing this info.

  2. Outsourcing is always seen as an easy way to get the things done while saving the capital in the process. What people need to take care of is the fact that it comes with its upside and downside. I am glad this post have them both and hope more people will now know what needs to be done before taking it up.

    Thanks Michale for the Share.

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