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How do Startups Benefit from Technology Outsourcing?

Having an in-house tech team can be costly, more so if you operate in a developed market, that not only burdens the organization but also restricts it from adapting to fast-paced changes – be it downsizing or scaling up. Technology outsourcing can eliminate this.

How do Startups Benefit from Technology Outsourcing?

Wednesday May 20, 2020,

5 min Read

Times we live in are extremely exciting for any startup company. They are not bound by technological inhibitions and can achieve whatever they set their mind to. However challenges still remain.

If you have an idea of how do you bring it to fruition?

What if you’re not a technologist yourself or don’t know the one you can partner?

Does that mean you can’t bring your idea to life?

Not really. The best way to test ideas is to do them without much investment at all – a company offering nearby delivery set-up a WhatsApp group to get people to place orders and when they saw a whole lot of people wanted the service they went on to build an app.

When you reach this stage you still may need help, but this time professionally. Thankfully perspectives on the way businesses need to operate has seen a major paradigm shift we are now well and truly in the ‘gig’ economy.

A few decades ago, just the thought of an entrepreneur working with someone halfway across the globe would’ve been dismissed, because it sounded ludicrous and impossible back then. Today, it’s not only easy but effective to operate as distributed teams.

According to the findings of Deloitte’s 2016 Global Outsourcing Survey, companies currently outsource 72 percent of their IT function and plan to increase it further.

This is completely understandable, as the success of top tech companies such as WhatsApp, Slack, and Skype can be credited to outsource development.

For instance, when Skype launched its operations in 2003 in Luxembourg, its founders hired a development team from Estonia.

They communicated their vision and made available resources they had to the technology outsourcing team. In two years, eBay acquired Skype for $2.5B and was eventually acquired by Microsoft for $8.5B.

What is it about distributed our outsourced teams that allow companies to maximize gains? Let’s look at some reasons for the same:

  1. Higher scalability

When you are sure that your idea is showing signs of taking off, you automatically focus your energy towards scaling up your business. But scaling your technology team to keep up the pace can be tough.

Moreover, you’re not really sure if you’ve hit the traction train i.e. you’re not yet sure if you’re definitely on to something. This is where having a technology outsourcing partner with a distributed team helps – because these are contractual terms and typically have resources on the bench, hiring is quick and scalable.

Having an in-house tech team can be costly, more so if you operate in a developed market, that not only burdens the organization but also restricts it from adapting to fast-paced changes – be it downsizing or scaling up.

Technology outsourcing can eliminate this and allow startups to remain lean and nimble.

  1. Clearer focus

With the technological-front handled, startup founders and stakeholders can focus on more important tasks surrounding growth and functioning of their business.

Technology is only one aspect of any business, and it should be leveraged to scale up, and not hinder progress. Outsourcing tech allows organizations to have a clearer focus on business, eventually helping them drive better strategies, and grow.

  1. Level playing field

Outsourcing gives startups a boost towards success because it provides them with access to professionals and tools that may only be available to larger companies. This becomes more true for non-technical founders who may otherwise find taking their idea to market rather difficult.

From brainstorming with a mobile app developer on functionality feasibility to letting outsourced experts drive User Experience strategies – a good outsourcing partner can help across multi-skill sets.

These outsourcing experts even work on a per-project basis and can deliver quality results at par with solutions from large companies.

  1. Improved efficiency

Outsourcing tech allows startups to focus on important aspects and layout better plans of action, and that too, quickly.

This is because outsourcing providers have everything in place to get the job done – people, processes, tools, equipment. This allows startups to channelize energy on crucial tasks, improving efficiency.

  1. Cost Effective

More often than not, it is quite a task to get such people onboard who are not only technologically equipped but fit well within your culture and vision, let alone that they may be expensive experiments.

When outsourcing, startups don’t need to invest in carrying out extensive interview procedures and catering to the needs of employees (from training to salary and benefits).

Furthermore, most startups today focus on a mobile app for their platform, and in-house mobile app development teams can be even more costly. Outsourcing tech will allow you to cut these costs while achieving your outcomes.

A study by Intetics reveals that outsourcing can help companies save at least 60 percent of their overhead costs.

Technology can become a niggling monkey on any business stakeholder’s back. While Outsourcing is not about getting the monkey off your back, it about partnering someone that can tame that monkey – and hone it to deliver all the tricks for your trade.