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Hear the word outsourcing, and you'll hear two sections of crowd - one chanting why outsourcing is here to stay, while the other crowd up in arms against the fallacies of outsourcing. The Unites States has been the leader in outsourcing various business services. Of all services outsourced globally, US accounts for about 60% (Source: Price Waterhouse Coopers). And much of this business goes to outsourcing leaders like India.

Among the countries that provide outsourcing services, India continues to lead the race. Despite threats from new outsourcing hubs springing up around the world, Indian outsourcing vendors lead the pack. Once considered a hotbed of 'low-end' outsourcing services like call centers, it now provides high-end services in the areas of research, design and engineering. As of 2008, revenues from outsourcing were nearly 11 billion USD (Source: NASSCOM).

Outsourcing services by Flatworld Solutions

Flatworld has worked with companies across the globe in maximizing their business goals. Whether it is providing transcription services to a small medical center or taking up engineering services for a large manufacturing organization, our breadth and depth of outsourcing experience has resulted in several long term customer partnerships. Almost 60% of our business comes from repeat customers.

Here is a breakdown of the services that we offer -

  • + Call center services
  • + Data entry services
  • + Transcription services
  • + Engineering services
  • + Healthcare BPO
  • + Finance and Accounting services
  • + Software development services
  • + Photo editing
  • + Research & Analysis
  • + Creative Design
  • + Web Analytics

Outsourcing services for states in US

We have worked with different regions in the US and are fully aware of the culture that exists in the different parts of America. More so, our flexible shift system allows us to work seamlessly and serve the various time zones that exist.

Outsourcing from Arizona

We have worked on several projects with companies in Arizona. Our most notable ones have been in the areas of - Engineering services and in Analysis services.

Outsourcing from Dallas

Dallas has given us successful relationships with companies who have outsourced their bookkeeping and other finance and accounting services .

Outsourcing from Atlanta

We have experience in dealing with companies from Atlanta and surrounding regions. Many have used our call center services to maximize their customer relationships.

Outsourcing from Washington

Though Washington has been relatively low in outsourcing, we have had very fruitful partnerships working in high end outsourcing services.

Outsourcing from New York

New York has helped Flatworld grow from just another outsourcing vendor to establishing key partnerships worldwide with a plethora of IT and ITES companies.

Outsourcing from Los Angeles

We've had experience on working with several media and film companies providing services such as transcription, media editing and software development.

Outsourcing from Las Vegas

Las Vegas has been a revelation in terms of the huge number of partnerships that we've had with companies who have partnered with us for their accounting needs. We have also provided large scale finance and accounting services to firms across Las Vegas.

Outsourcing from New Jersey

We have worked with several healthcare firms as well as IT firms from New Jersey.

Outsourcing from Houston

Houston is one of the key cities that we've worked with. A large base of our customers comes from Houston and other cities from Texas.

Outsourcing from Kansas

Kansas has provided us with partnerships in the areas of IT, call center and other BPO services.

Outsourcing from San Antonio

Like other cities in Texas, San Antonio too has given us a big chunk of customer partnerships. We have worked with companies across various industries from San Antonio.

Why Flatworld is an ideal outsourcing partner for US companies?

Flatworld Solutions was already at the forefront of providing outsourcing services since 2002. At the beginning we offered just custom software development. But soon we began offering a wide range of specialized business process outsourcing solutions designed to meet rapidly increasing market demands.

Today, we are a 750 strong organization with multiple delivery centers spread across India, South East Asia and South America, UK and Philippines. Almost 80% of our business comes from the US. Our customers range from budding entrepreneurs to large corporations.

Some strong drivers as to why US companies can benefit from Flatworld's outsourcing services include -

We have leveraged the outsourcing advantages that other countries have to offer. We have global delivery centers in - India, Philippines, Kenya, Bolivia, US and Colombia. This has helped us not only create local talent, but also utilize near shore off-shoring benefits

In any outsourcing model the offshore partner supplements the operations of the outsourcing company with redundancies and back-up mechanisms. Flatworld employs a multi-tier backup system - where multiple copies of secure data are stored. In the event of any calamity or disaster, we can easily retrieve the data and get up to speed immediately

Outsourcing processes to an external third party ensures that an organization's internal resources are freed up for more mission-critical activities. Flatworld has worked with this premise with all our customer engagements. We have always been more than just a vendor and have established successful partnerships with businesses in the US

Lower cost outlay is a primary advantage of outsourcing. The costs of labor, infrastructure and systems in India are a fraction of what is available in the US. Through outsourcing, Flatworld has realized this fact and has worked its pricing in such a way that they can be reinvested for growing the core areas of your business

Contact us today and we'll be happy to help your business succeed through outsourcing.

Action. Passion. Energy. Results.

All converging towards business without barriers in the flat world. That’s Flatworld for you.


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The Ultimate Guide to Outsourcing IT Projects in 2023: Best Practices and Tips

Home » Blog » The Ultimate Guide to Outsourcing IT Projects in 2023: Best Practices and Tips

Outsourcing IT projects is a trend in full bloom over the last couple of years. 

If you haven’t dabbled into software outsourcing projects as an entirely in-house business developer, perhaps, now must be the perfect time to do so. 

Back in 2022, almost 59% of worldwide businesses cited cost as one of the main reasons for outsourcing it projects. It’s cheap, it’s feasible, and when assigned to the right team, outsourced projects garner better results than expected.

Top it off with remote job perks and the flexibility aspect of things, more and more people are either looking for outsourced projects as full-time jobs or businesses looking to go all-in with software outsourcing projects.

As a matter of fact, Gallup did a survey on outsourcing it projects and remote jobs in 2022. The discoveries of that survey were astounding – all the more reason to go for outsourced projects as a vendor, and someone looking for remote opportunities these days.

  • 5 in 10 people are working hybrid 
  • 3 in 10 people are working remotely 
  • 2 in 10 are entirely on-site. 

That being said, outsourcing it projects does have its limitations. Unfortunately, if it’s your first rodeo, the chances of you ending up with an incapable team, or a vendor who doesn’t work as advertised are higher.

Top it off with gaps in communication and commitment issues concerning deadline-oriented work, outsourced projects can become a nightmare to deal with.

Here are some of the best tips to get the most out of your outsourcing ventures.

4 Best Tips To Outsourcing IT Projects In 2023 and Beyond

software outsourcing projects

1. Determine Project Goals and Scope Before Outsourcing

Not knowing what your project scope is, or whatever the end goal is, never going to get you there.

Software outsourcing isn’t supposed to be done on a whim, just because the cost factor seems attractive. Here are some of the reasons why you need to determine project requirements , scope, and goals before even considering outsourcing it projects.

Clear Communication: 

Defining the project scope and goals helps in establishing clear communication between the outsourcing party (client) and the service provider. 

It ensures that both parties have a shared understanding of what needs to be accomplished, reducing the chances of miscommunication and misunderstandings.

Requirement Alignment: 

Clearly defining project scope and goals helps align the outsourcing project with the client’s business objectives. 

It ensures that the project addresses the specific needs and requirements of the client’s organization. This alignment increases the likelihood of achieving the desired outcomes.

Resource Allocation: 

Determining the project scope and goals allows for proper resource allocation by both the client and the service provider. 

It helps in identifying the necessary skills, expertise, and resources required to execute the project successfully. 

Proper resource allocation ensures that the right people with the appropriate skill sets are assigned to the project, maximizing efficiency and productivity.

Cost Estimation: 

When outsourcing IT projects, determining project scope and goals enables accurate cost estimation. 

By clearly defining the project’s boundaries and deliverables, it becomes easier to estimate the budget required for the project. This information is crucial for both the client and the service provider to plan and allocate finances effectively.

Risk Management: 

Clearly defined project scope and goals assist in identifying potential risks and challenges associated with outsourced projects . 

It enables proactive risk management by assessing potential obstacles and developing mitigation strategies. 

Understanding the project’s scope helps both parties identify dependencies, critical paths, and areas where risks may arise.

2. Choosing the Right Type of Services Provider

This aspect couldn’t be overemphasized as it is. 

The biggest conundrum of it project outsourcing is delays, cost factors, and misconduct at the hands of a vendor. Here are some reasons why choosing the right services vendor is more important than ever before!

Expertise and Skill Set: 

The right vendor brings the necessary expertise and skill set required for the project. 

They should have a proven track record of successfully delivering similar projects and possess the technical knowledge and experience relevant to the specific requirements of the software project. 

Selecting a vendor with the right expertise ensures a higher probability of project success.

Quality Assurance: 

A reliable vendor prioritizes quality in their work. 

They follow established software development processes, methodologies, and quality assurance practices to deliver a high-quality product. 

Choosing the right vendor ensures that the software development lifecycle includes rigorous testing, code reviews, and adherence to industry standards, leading to a robust and reliable end product.

Communication and Collaboration: 

Effective communication and collaboration are essential for the success of any outsourcing project. 

The vendor understands the importance of clear and frequent communication and provides a dedicated project manager or a point of contact who can effectively communicate project updates, address queries, and ensure a smooth flow of information between the client and the vendor. 

A vendor with excellent communication and collaboration skills helps establish a strong working relationship.

Cost Efficiency: 

A reputable vendor provides transparent and competitive pricing models, offering value for the investment. 

They have a clear understanding of the project requirements and can provide accurate cost estimates. 

Moreover, a skilled vendor can optimize development processes, utilize resources efficiently, and minimize the overall project cost without compromising on quality.

Flexibility and Scalability: 

The right vendor should be flexible and capable of accommodating changes in project scope, requirements, or timelines. 

They should have the capacity to scale up or down resources based on project needs. 

Flexibility and scalability are crucial as they allow for adapting to evolving business requirements, ensuring that the outsourcing partnership remains viable in the long term.

3. Value-Driven Services Vs Cost Focused Services

If it’s value over cost, take it. 

In most cases, such will pan out in your favor due to the vendors’ expertise and years of experience in handling outsourcing IT projects. 

Some of the other reasons for value-driven outsourced projects are:

Tailored Solutions: 

Value-driven services emphasize customization and tailoring solutions to meet the client’s unique requirements. 

The vendor takes a consultative approach, understanding the client’s business context, and providing solutions that address specific pain points and deliver tangible value.

Collaboration and Partnership: 

Value-driven services foster a collaborative and strategic partnership between the client and the service provider. 

The vendor works closely with the client, actively engaging in discussions, providing insights, and contributing expertise to ensure that the project outcomes align with the client’s business objectives.

Quality and Innovation:

Value-driven services prioritize quality, reliability, and continuous improvement. 

The vendor focuses on delivering high-quality solutions that meet or exceed the client’s expectations. They actively seek opportunities for innovation and suggest improvements that can enhance the client’s processes and generate long-term value.

Long-Term Relationship: 

Value-driven services aim to build a long-term relationship with the client. The vendor invests in understanding the client’s business, industry, and future goals to provide ongoing support, maintenance, and strategic guidance beyond the initial project scope.

4. Go Into Pilot Mode Before Actually Signing Someone Up!

Pilot projects are smaller iterations for the full project where you’d eventually sign a contract with an outsourcing it projects vendor. 

Here’s why doing so is important:

Evaluating Capability: 

A pilot project allows you to assess the capability and competence of the development team. It provides an opportunity to gauge their technical skills, problem-solving abilities, and adherence to project timelines and quality standards. 

By testing the team’s performance in a smaller-scale project, you can make an informed decision about their suitability for larger and more critical projects.

Building Trust and Rapport: 

Outsourcing IT projects involves establishing a relationship of trust with the development team. 

A pilot project helps build rapport and establish a level of confidence between your organization and the outsourced team. It allows you to interact, collaborate, and communicate with the team, fostering a better understanding of each other’s working styles, expectations, and project dynamics.

Mitigating Risks: 

A pilot project helps identify and mitigate potential risks associated with outsourcing IT projects. 

It allows you to assess the team’s ability to handle project challenges, address issues, and adapt to your organization’s processes and requirements. 

If any issues or concerns arise during the pilot project, they can be addressed and resolved before scaling up to larger and more complex projects, reducing the risk of major setbacks.

Testing Compatibility: 

A pilot project provides an opportunity to assess the compatibility between your organization and the outsourced team. 

It allows you to evaluate how well the team integrates with your internal teams, collaborates with stakeholders, and aligns with your organization’s culture and values. Testing compatibility early on helps avoid potential conflicts or misalignments in the future.

Demonstrating Results: 

outsourced projects

A successful pilot project serves as tangible evidence of the development team’s capabilities and the potential value they can deliver. 

It allows you to showcase the outcomes achieved, the quality of work, and the efficiency of the outsourced team to key stakeholders and decision-makers within your organization. Demonstrating positive results increases confidence in the decision to outsource larger projects.

Partner with Blue Zorro Today !

it project outsourcing

There you have it, some of the main reasons why outsourced projects are a big deal these days, and why it’s important to follow the aforementioned tips.

Blue Zorro excels in delivering all that and more, based on years of experience and a robust development and IT solutions implementation team. We have crystal clear communications and an agile framework where clients can keep track of project development from the get-go. 

It’s a ground-up approach with tons of flexibility and our ability to render personalization requests from the clients’ end, ensuring nothing but quality from long-term aspect.

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The 6 best online outsourcing websites (and how to use them)

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Freelancer and Upwork are freelancing sites that facilitate and streamline the process of hiring virtual or remote workers.

Each of these sites have their own approach, but in essence, all of these companies allow you to do more or less the same thing.

You can post a job description, have people bid on the work, negotiate on price, and look at previous ratings and work history before settling on either a contract rate, or a pay-per hour agreement.

Generally, money is held by each of the websites in an escrow account, and they release the payment to the worker when the work is complete (skimming a neat profit at the same time – typically 10-15% of the money that changes hands).

The best outsourcing websites

  • Freelancer.com
  • Amazon’s Mechanical Turk

Read on as we will review each of them later.

See how Time Doctor’s easy-to-use time tracking software can help your team be more productive.

So why outsource.

Freelancer (an online job marketplace acquired by Freelancer in 2012) argues that online outsourcing makes workers “more accountable”.

With 54% of traditional workers in the U.S. “sleepwalk through their day” and an additional 18% actively sabotage other workers, a Gallup Research says, “in today’s competitive environment, that’s simply unacceptable,” says Freelancer founder Ian Ippolito.

“When I hire a traditional employee, I can’t be sure they’ll do the job right, spending time at the water cooler or playing solitaire instead. But in our virtual environment, we’re proud to guarantee performance,” Ippolito said.

The added flexibility of having to hire staff only when you need them is another reason why many businesses are turning to online outsourcing . You also can get access to top quality people at a much lower rate than if you were hiring in your own country and the cost savings can be very significant.

To hire a quality programmer in California is probably going to set you back $80-$120 per hour.

Using outsourced web sites you can find quality programmers in the US for $30-$40 per hour, or in India, the Philippines or Russia for $10-$15 per hour.

Additional Tips:

If you are managing remote teams, take a look at these strategies for managing virtual teams . See also the online collaboration tools to help your team be more productive .

Outsourcing and freelancing sites allow entrepreneurs to easily launch side hustles and affiliate sites without incurring huge labor costs.

Getting started

Outsourcing can be overwhelming at first – each of these sites uses a different system, have a different layout and can take days to get used to.

Deciding on which site to use while striking the balance between competitive rates and effective results can be like walking a virtual tightrope.

As mentioned above, all of these sites will require you to:

  • Post your job.
  • Start receiving proposals from candidates.
  • Compare profiles, reviews, ratings, credentials, portfolios and price to select the best fit. Methods of payment and working together generally vary from site to site (explained in more detail below).

We ourselves have been active in online outsourcing for over 10 years and our virtual team extends to several countries around the world. We’ve used these sites many times for many different projects (small and large).

Here’s what we know.

Based on Compete.com rankings, these six sites are the top outsourcing sites on the internet (at least in terms of traffic). From most to least popular:


How it works: Pay only for verified time spent working for you – Upwork’s Work Diary software allows you to see each of team members activity levels (keyboard and mouse activity), and feedback, as well as web cams and screenshots of their computer to make workers more accountable.

Payments: Based on hours worked, or completed jobs.

Fees: The fee is 10% of the employer’s payment to Upwork which equates to 11.11% on top of the amount paid to the contractor.

Our experience: Upwork is great when you have a task where you’d prefer to pay by the hour. Also, note that Upwork is formerly oDesk, which merged with Elance in 2013.

Check out our comprehensive Upwork review if you want to go into more detail about the platform.

2. Freelancer.com


How it works: When you hire a worker you need to create payment milestones, as milestones are completed, payment is released.

Payments: Based on milestones, or completed work.

Fees: Here’s where it gets messy:

  • Posting a project – $5, refundable, fully refunded on selecting a Service Provider.
  • Selecting a Service Provider – $3 or 3%, whichever is higher
  • Posting a Featured Project – $19
  • Hide Project from Search Engines – $3
  • Optional Hide Bids from Other Users – $3
  • Gold Membership – $24.95/month, 0% project commissions
  • Posting a Full Time Project – $99.95

Our experience: Better for project based work (one off jobs). Easy to use, and suited to smaller jobs – “The average job is under US$200, making outsourcing for the first time extremely cost effective for small businesses .

We also have a full Freelancer review if you want to learn more.


How it works: Pay for completed work.

Fees: Memberships are available from $29.95 to $99.95 per quarter.

  • Project Fee – Either 5 or 10% of the Invoice or Escrow amount, depending on your membership level.
  • Escrow Fee – 2% of the escrowed amount. Only charged when SafePay Escrow is used.
  • Employer Payment Method Fees – Up to 4% for a credit card payment and 2.5% for Withdraw Method Fees – $3 to receive funds by check and $9 to receive funds by wire transfer.

Our experience: Caters more to US based freelancers (182,000 workers in the US vs 51,242 in India, and only 1,887 in the Russian Federation). Working with a native English speaker is sometimes a good option when you need to be able to verbally communicate project requirements.

Guru is also a good option if you are looking to work with a US based provider.

4. Amazon’s Mechanical Turk

amazon mechanical turk

How it works: This platform provides developers with access to an on-demand workforce with a flexible UI with a simple API.

Organizations use crowdsourcing via MTurk for help with things like microwork, human insights, and machine learning development .

Fees: You decide how much to pay the person you hire.

  • 20% fee on the reward and bonus amount (if any) you pay Workers.
  • HITs with 10 or more assignments will be charged an additional 20% fee on the reward you pay Workers.
  • The minimum fee is $0.01 per assignment or bonus payment.

Masters qualification fee:

  • There is an additional fee for using the Masters Qualification.
  • The fee is 5% of the reward you pay Workers.

Premium qualifications:

  • There is an additional fee for using Premium Qualifications .
  • The additional fee per assignment starts at $0.05 and varies depending on the qualification .

Our experience: It’s a strange name, but it has some great functionality. MTurk is based on the idea of taking a job and separating it out for many different people to work on (in pieces).

It’s an interesting approach and worth checking it out if that approach fits your project requirements.

5. DesignHill


How it works: Post a brief where you describe your project, choose a package, and then launch your design project.

You’ll browse dozens of designs that designers submit to your contest. Then, you can give feedback and get unlimited revisions. You get to choose the best one when all is said and done.

Fees: Fees vary depending on which package you select. Fees vary from $199-$999.

Our experience: This is a good option if you have a limited budget for graphic design and/or want to choose from more style than one.

The crowdsourcing option gives you the opportunity to limit down designers until you’ve found the one you like the best.


How it works: Professional freelancers post “gigs” and buyers can review the gig, contact the seller, and see the price.

Once a gig catches a buyer’s eye, they can enter into an agreement and start working on a project together.

Fees: The buyer will pay full price of the gig, usually via PayPal or CC, the seller keeps 80%, and Fiverr keeps the other 20%. If a gig costs the traditional $5, the seller keeps $4, and Fiverr keeps $1.

Our experience: Fiverr started out with most freelancers posting their services for $5. Freelancers can now post their starting rate, and also provide add-ons. Even though gigs sometimes cost more than $5 , the prices are still outrageously low. It’s possible to strike gold and find remote work for very reasonable prices.

You can also try out the other sites like Fiverr for the more reasonable prices for the different tasks.

Which site is best?

In short, it depends on the type of work that you are doing.

For hourly work, Upwork is possibly the best option. For one off project based work, Guru and Freelancer.com are great options as they have a process where you upload funds into escrow (giving the provider and reassurance).

Disputes over completed work are usually handled swiftly – although it’s important to have a clear job description (see below – Tips for posting jobs). In our experience Freelancer is best for getting project based work completed.

Guru is great if you are looking for a US based provider. With Upwork the providers often have to pay to bid on projects. This provides a bar that eliminates some of the lower quality providers. The result is that you are more likely to pay a little more, but you are also more likely to get a good end result. Places like Fiverr have workers all over the world, but the prices are also more than fair.

If you are looking for a specific type of work, DesignHill and MTurk are more focused. These might be a great place to start if you know what you want, and want to only hire a designer, for example.

It’s hard to say which site is the best, because it depends on your preferences, your goals, your budget, and how you like to work with remote workers.

Each outsourcing website is different, and you’ll get different features, different benefits, different types of remote workers, and different expertise. The best idea is to check them all out and see what works best for you individually.

Comparing the software used to monitor paid by the hour work

If you are hiring on an hourly basis you’ll want to monitor how many hours are worked (and confirm they were actually worked).

If you develop trust in someone you might not need to do this, but generally it’s hard to trust a new person that you are paying on a hourly basis that they will deliver the results you want (and/or that they aren’t just sitting around fiddling with their mouse).

Upwork has a “similar tool” which takes screenshots of the person’s computer at regular intervals.

Time Doctor (that’s us!) is another alternative which can be used to monitor paid by the hour workers.

It’s a much more comprehensive and a more effective tool for working with remote teams and has many advantages including automated reports, time usage reports (for application and internet usage) and it doesn’t attract an ongoing fee (as the Team Tool and AccueTime Card would).

Project based work versus paying an hourly rate

Generally, you can hire either on a project basis, paying for a completed project , or on an hourly basis.

Project work is generally safer for you as there is a fixed amount you need to pay to get the task complete.

When you hire on an hourly rate you don’t have any reassurance of the maximum amount that you will spend.

An hourly rate is more appropriate for longer term work or where you have a variety of different tasks for the person.

Tips for project based work

If you hire on a project basis, make sure that you do complete and detailed specifications of the project . Exactly what do you want to happen, how will you know when it is complete.

List the requirements in detail. Be careful that you select someone who has experience doing projects of a similar level of complexity.

It is easy for freelancers to say yes to a project without thinking through how difficult it might be to complete (particularly if they are desperate for work).

Having someone quit halfway through a project is the worst possible outcome (and an experience we’ve have had many times).

Having to start over means you lose time and money. Learn from our mistakes – see below.

Hiring an individual versus a team

hiring a team

On all of these sites, there are generally 2 types of workers – individuals and teams.

The advantage of hiring an individual is that you know exactly who you are working with and you can get familiar with the working style of that person.

If you are working long term on an hourly rate, you can negotiate lower rates if you are working directly.

You will also have more control if you are hiring a person rather than you hiring a company which has a number of employees. On the other hand a company might bring more training, synergy and an environment where people can ask for advice and direction.

In our experience working with an individual is a better move especially if you are working together in the long term.

Which country should you hire in?

About 5 years ago, we worked with an online researcher and programmer based in Mumbai.

Things were going so well that we asked him to set up an office for us. We paid for computers, office space, etc and wrote up some contracts for 2-3 new staff who would work under his supervision.

5 weeks later we received an email that went something like this:

“Hi, I am the younger cousin of ________ and he is forcing me to do work and doesn’t pay me. He threatened to stab me with a knife if I talk to you”.

Our Mumbai contact had forged receipts for office equipment, falsified personal documentation and was sitting between 2 computers pretending to be 3 different people.

In general most of our experiences with workers from India, Bangladesh and Pakistan have been negative.

In our experience, it’s common for freelancers to ask for bonuses before work is completed, complain that the work is taking longer than expected, ask for money, and will often create really poor excuses for not reaching milestones: rare diseases, non-existent floods, house fires and everything in between have been used to excuse under-performance.

As always, it really depends on the person.

There are extremely talented people in India, however it is sometimes difficult for you to get access to them on freelance sites .

We work with a designer who is Indian – he’s an illustrator and does great work and has never missed a deadline.

It’s important to look at work history carefully to make sure that past performances matches would you’d expect from a worker (and make sure their experience is in the right area). If they have multiple very high ratings on the freelance site you are more likely to be pleasantly surprised rather than disappointed.

Other locations

Former Soviet Union (Russia, Belarus, Ukraine etc) – a good place to find low cost, technically superb coders.

Usually not the clearest communicators (or the best designers), and you’ll have more luck if you have a detailed blueprint at the beginning of a project. However, they are generally hard workers and honest in answers to any questions you have.

Philippines – incredibly diligent workers in all areas. It’s possible to find good writers, marketers, researchers and programmers. One of the cheaper places to hire great staff.

USA / Canada / UK – excellent if you are looking for skills in a particular area, but it’s important to look at work history.

We’ve had bad experiences hiring people who are new to freelancing. In general hiring someone in these places is more likely to get you a better result but is also more likely to be 2-10 times more expensive.

Graphic / Web design – don’t hire designers from South East Asia if you expect a western looking result. South America seems to have good illustrators and Flash programmers.

Expats – hiring someone from the US or UK living in Thailand for example can be a great way to get very talented people at a lower hourly rate.

Their living costs are lower and they might not find it easy to get a high paying job in their place of residence – freelancing might be an extremely appealing option. Try advertising on expat forums.

Note: In each country be aware of natural disasters. For example, typhoons can wipe out power to entire cities for a number of days in the Philippines. Political turmoil or severe heat waves can also create problems in some countries.

Tips for selecting the right worker

A common struggle with online outsourcing is ending up with people that can’t get the job done or leave half way through a project.

One way to overcome this problem is to hire people that have good feedback and ratings. If we are posting a complex job, we never hire anyone with less than 30 completed jobs and they must have ratings of higher than 90% (or 9 out of 10).

Another way to dissect your applicants is to avoid any generic responses. If someone hasn’t addressed your criteria in a clear and simple way, it’s probably not worth looking at their work history.

You can even put a simple test in your job description like “mention the word elephant when you are replying so that I know you’ve read our job description in full”.

Kick the tires

Although it takes a little longer, if the job is important, you should create a small test that can evaluate a person’s skills.

For example when hiring a writer for my website, I asked them to write 3 sentences for a specific page on my site. “Please look at this web page, evaluate the current content and then add another paragraph of 3-5 sentences that you think are missing on the page, and that fits with the current style of the content”.

Here’s a very good example of a short job advertisement / test by Jason Fried from 37 Signals they used to hire customer support representatives for their business.

Alternatively (especially for larger projects), hiring someone for a small-project they can do in their spare time is a lot easier for both sides to swallow. “Kick the Tires” in Getting Real talks about this:

Before we hire anyone we give them a small project to chew on first. We see how they handle the project, how they communicate, how they work, etc. Working with someone as they design or code a few screens will give you a ton of insight. You’ll learn pretty quickly whether or not the right vibe is there. Scheduling can be tough for this sort of thing but even if it’s for just 20 or 40 hours, it’s better than nothing. If it’s a good or bad fit, it will be obvious.

It’s also a good idea to think hard about what you’re offering and how you can make your situation as attractive as possible: flexible hours, bonuses for work completed before deadlines and any other sweeteners will help attract a great pool of workers to select from.

The most common frustration is in not getting the output that you desire out of the contractor. Another potential problem is needing to spend a lot of time back and forth training the person or fixing issues with their work.

Here are a few pointers for overcoming these and other challenges:

  • Hire people with a lot of great feedback.
  • Test many different people, possibly using several different outsourcing sites.
  • After testing, select the best few people and hire all of them. Then start working with these few different people on test projects and continue working long term with the ones that produce the best results.

Really it’s a matter of trial and error to a large degree, and once you work with dozens of people you will find a few who always come through for you and whom you can depend on.

Over time you’ll develop a list of preferred contractors that you can contact for work that you know they can deliver.

What can you outsource with these sites?

Theoretically, you can outsource anything.

Looking at the types of work listed in Upwork for example there is: programming, web design , writing, sales, customer support even legal work or accounting.

In practice the more specialized and complex the task, the more difficult it is to find the right person on one of these sites.

Hiring staff directly vs using an outsourcing site

Outsourcing sites are best for finding people to do project based work.

If you want a longer term full time person you might want to try hiring them directly. Target the country or area where you are most likely to find the right staff. Then use a multi-pronged recruitment method including: posting on job sites, Linkedin, posting in relevant forums and referrals from people in your network.

Recruiting remote staff (in your own country or abroad) is really no different to recruiting locally. All of the same hiring and firing principles apply.

In the US, Craigslist, Linkedin, Monster are good ways to advertise for people. Sometimes you can get better results from word of month, from advertising on Facebook or from advertising or relevant forums or industry specific web sites.

For example if you are recruiting Java programmers, there are a number of Java forum websites where you can advertise for free or for a small fee. This helps you to go direct to the place where your target employees are hanging out. You can do the same thing with Linkedin.

Recruiting overseas in the Philippines, Russia, India etc is similar.

You can use Facebook, Linkedin or local job websites to recruit in all of these places. For example to recruit in the Philippines you can use BestJobs.ph .

In Romania, there are English language job websites like bestjobs.eu . In general, it’s not hard to find popular job sites any country and posting a job ad is usually $50 to $100.

In other developed countries you will find sites like Gumtree (Australia) where you can advertise jobs for free (or find people looking for work). Similarly, in the U.K. Where the job market is tight you can find highly skilled travelers who might be interested in any sort of work (try the jobs section in TNT Magazine ).

10 tips for posting projects requirements

posting project requirements

  • Write your description as if you are explaining them to a 10 year old child
  • Set clear milestones if you want use them for payments
  • Ask someone else to read your project description before uploading it – sometimes things that make sense to you will make no sense at all to someone who has no involvement with your project or company
  • Invite workers who have matching experience. For instance, if you are looking for Joomla help, search for workers with Joomla experience and good ratings. Sort them by the last sign in date and then invite them to your project.
  • If you are worried about protecting your intellectual property or idea, create an NDA and make sure you are exchanging it with a real entity. Make your terms and conditions reasonable (most of these sites have a standard NDA you can modify).
  • If you don’t want to draw attention to what you are doing, keep your job description vague and discuss details only with parties you are interested in working with.
  • Post the majority of your job description in an attachment and leave a small “test” to make sure the person has read the description (for example, mentioning a particular word or asking them to address 2-3 key criteria).
  • Use a service like gomockingbird.com to clearly outline your ideas in a visual medium
  • Make your project sound exciting and include that it will look good in any portfolio
  • Post your job to specific geographic regions depending upon the sort of worker you are looking for.

Remote work is growing as a viable, cheaper, and often better option when it comes to building your team. Let this article act as a resource in helping you find the right remote worker for your organization.

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Rob Rawson is a co-founder of Time Doctor which is software to improve work productivity and help keep track of what your team is working on, even when working remotely.

8 high paying remote jobs

Why your business needs process documentation, related posts, dell asks hybrid workers to work 3 days a week: report, rto mandates fail to boost company productivity or value: study, ibm’s office ultimatum: a pivot away from remote work, ey’s strategy for managing hybrid compliance, remote agents and the future of flexible work, l’oréal ceo claims remote workers lack passion and creativity.

Outsourcing: Pros, Cons, & Projects to Consider When Hiring a Third Party

Meg Prater (she/her)

Published: May 09, 2023

This blog post has provided information designed to help our readers better understand the issues surrounding outsourcing and does not necessarily represent the strategies of HubSpot. If you are looking for a professional opinion on your business structure, we suggest consulting a professional.

what is outsourcing in business

You know the feeling of bliss you get when you reach inbox zero or cross the last item off your to-do list? Yeah, neither do most of us. Because of that, many companies turn to outsourcing as a tool for small or overworked teams.

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It doesn't end there — other companies rely on outsourcing to fill knowledge or skill gaps they don’t yet have the headcount or budget to hire for internally, including paid advertising, video production, and payroll.

Think you might need to outsource some projects? Here, we'll look at the pros and cons of outsourcing, see it in action with a few examples, and explore which tasks businesses commonly outsource.

Table of Contents

What is outsourcing?

How does outsourcing work, why do companies choose to outsource, pros and cons of outsourcing, how to tell if you should outsource a task, outsourcing examples.

Outsourcing is the practice of hiring outside specialists or generalists to do specific tasks that are traditionally done in-house. It’s a way to cut costs and save money if you don’t have the funds to hire in-house employees, and it frees up time for your teams to focus on pressing and revenue-generating tasks.

The first step to outsourcing is browsing for freelancers or third-party providers that offer what you’re looking for. They typically outline what they do and a pricing structure so you can decide based on how your needs and goals align with their abilities.

Once you’ve decided on a provider, you’ll create a written contract that outlines tasks, goals, deadlines, and pricing. You’ll also likely share any resources you have to help them learn more about your brand or business so that whatever they produce or do aligns with your brand. For example, providing a design team with a logo or giving a payroll expert compensation information.

According to a recent Deloitte study , the main reason companies use traditional outsourcing (for simple tasks that can be automated, like network administration) is an overall need to cut costs. Most recently, challenges in employee retention, a competitive talent market, and keeping up with new technologies have drawn businesses to outsourcing — “Organizations call upon the service provider ecosystem to provide critical solutions that are agile and integrated.”

why do companies outsource

Managed services outsourcing is outsourcing to providers with advanced expertise that offer specialized services, like a cybersecurity provider. The most common reasons businesses say they use managed services outsourcing are increasing the pace of technology and digital transformation, to gain access to new capabilities, and because of increasing and more complex cybersecurity threats.

Deloitte found that the most common business functions outsourced are legal, tax, and HR tasks and IT tasks related to cybersecurity, app/software development, and IT infrastructure services.

Let's look at how two companies, Slack and WhatsApp, use outsourcing to meet business goals.

Example 1: Slack

outsourcing projects from usa

Image source

Slack , a workplace communication tool, has become one of the most popular corporate chat rooms. It's hard to believe that it owes much of its success to outsourcing.

Back when Slack was just a rough prototype, the company hired a Canadian design team, MetaLab , to design the app from the ground up — along with the brand and website.

Leveraging MetaLab's expertise in interface design, the Slack team overhauled its model with playful colors and interactive elements.

Since officially launching in 2013, Slack has become the fastest growing business application of all time. It's also a prime example of why outsourcing is such a powerful tool for growing and scaling a business. It also speaks to how outsourcing can play a role in even the most crucial parts of a company — such as its entire look and feel.

Example 2: WhatsApp

outsourcing projects from usa

WhatsApp is a messaging app used by millions around the globe to send texts, images, and audio. In 2012, the scrappy startup had only 30 full-time employees and a handful of part-timers at its California headquarters.

To scale the company while reducing costs, it outsourced most of its development to a group of app developers in Russia. In doing so, its California team could focus on other operational and customer support functions.

By outsourcing, WhatsApp was able to unlock access to global talent at a significantly lower cost while alleviating the workload for its California team.

  • Pro: Cost-effective
  • Pro: Faster turnaround
  • Pro: Specialization
  • Pro: Access to more talent
  • Pro: Can prevent burnout of full-time staff
  • Con: They don't know your business
  • Con: Communication challenges
  • Con: Difficulty with quality control
  • Con: Can be tough on team morale
  • Con: Slow response time

1. Pro: Cost-effective

Outsourcing tasks like content writing or accounting can be cost-effective if you don’t currently have the funds or ability to hire a full-time employee dedicated to those tasks.

2. Pro: Faster turnaround

Depending on the task, the person you outsource may only take one project at a time, and having one person devoted to your job allows it to get done faster.

Setting a timeline up front lets you dictate when you need a job finished, and since freelancers don’t always have to meet the same demands as a full-time position, you can set realistic timelines focused on the exact task at hand.

3. Pro: Specialization

Need to hire a designer who specializes in stop-motion graphics? Outsourcing makes it easy to hire an agency or freelancer who's an expert at stop-motion instead of an all-purpose, full-time designer who might not have stop-motion experience but will be a more realistic choice for day-to-day needs.

4. Pro: Access to more talent

Outsourcing lets you hire the best and most specialized in your area of need. For example, recruiters with experience helping startups develop a diverse baseline team.

5. Pro: Can prevent burnout in full-time staff

Outsourcing can save the day if you don’t have the budget to hire a full-time employee but need to provide relief to your existing team. You can take simple tasks or time-consuming projects off your plates and avoid burnout while still obtaining high-quality work.

For example, working on a marketing campaign to announce a rebrand is an all-hands-on-deck time-consuming project. To make sure everyone puts their best foot forward, maybe you outsource video editing to an expert freelancer so your teams can focus on business-specific tasks since they know it best.

6. Con: They don't know your business

A good freelancer will do their best from the resources you give them to learn your company’s goals, brand, and style, but they won’t understand your business as an employee does.

7. Con: Communication challenges

You might never meet the people you’re outsourcing work to because it’s not unusual to conduct business entirely online or over the phone/video. While today’s digital workplace makes this increasingly easy, you could find yourself playing phone tag, keeping up with different time zones, or having trouble communicating over email.

8. Con: Difficulty with quality control

When you outsource, you typically give a vendor or freelancer a statement of work, sign a contract, and wait for a finished product. If you’re less involved, you might miss out on opportunities to suggest updates or edits and aren’t as satisfied with the finished product.

9. Con: Can be tough on team morale

Outsourcing can lower morale if people think tasks are outsourced because there’s a missing skill set, or they might get nervous that you will outsource more and more work until their job becomes obsolete.

If you do outsource, make sure you communicate the reasoning and goals behind outsourcing. For example, “We’re outsourcing initial outreach to give our existing sales team more time to close higher-value deals.”

10. Con: Slow response time

You might not be the only client a freelancer has. Unlike an employee, you can't tell a contractor to prioritize a certain project. Be respectful of their time but assertive if they're not meeting your agreed-upon timeline.

It’s worth noting that with many of the cons outlined above, there are ways to control them when you outsource. For example, you and your team can develop a media or vendor kit of crucial information about your business, mission, and branding elements (tone, logo, color scheme, etc.) that you can share to ensure finished products align with your needs.

You can also create a process where you have periodic check-ins to see how things are going and offer suggestions or ask for adjustments before it’s too late. Not all vendors or freelancers have this process, but if you’re worried about being less involved, you can seek out those who allow it.

When you’re part of a small team or growing business, it might be challenging to figure out where to allocate budget for other people to complete tasks might be challenging. Instead of thinking about the money you’ll spend, think of it as an investment in the growth and productivity of your team.

And before outsourcing a task or project, have a checklist of questions you ask yourself:

  • Is the task a primary service or benefit of your business offering? If yes, consider hiring someone internally to scale company growth responsibly. If not, it might be a task worth outsourcing.
  • Will outsourcing this task free up time for you to grow your core business or product? If that’s a yes, outsource it.
  • Will it cost less to outsource this task than to hire someone new or tackle the task internally? If yes, outsource it.
  • Can someone else complete this task better and faster than your internal team? If yes, you should outsource.
  • Is this a rare or one-time need? If so, it’s time to outsource.
  • Will it give you a competitive advantage to handle this task in-house? If so, try to hire staff or complete this project internally to avoid outsourcing.

By using this list of questions as your compass for whether or not to outsource a task, you’ll ensure your decision to outsource is always the right one. These questions will keep you honest and your business growing steadily. This list of best sales tools for small businesses can help too

Content writing, human resources, and accounting are commonly outsourced tasks. It's often less expensive for small businesses to outsource these tasks than to hire full-time help.

Outsourcing Marketing and Design

Small businesses often don't need the volume of content and design work that necessitates a salaried position. By employing freelance writers and designers, businesses can pay by blog post or creative project instead.

  • Social media content creation
  • Social media management
  • Logo design
  • WordPress design
  • Newsletter creation
  • Voiceover talent
  • Webinar management
  • Email management
  • Data management and reporting
  • E-book creation
  • Proofreading
  • Canva image creation
  • PPC campaign management
  • Writing and blogging
  • Competitive and industry research
  • Web maintenance
  • Graphic design
  • Presentation preparation
  • Conference submissions
  • Guest blog outreach
  • Blog comment moderation
  • Video production
  • Email design
  • Video editing
  • Press release writing
  • Public relations
  • SEO optimization
  • SEO site audit
  • Link building
  • App development
  • Influencer marketing
  • Photography
  • Photo editing
  • Editorial calendar management
  • Infographic creation
  • Market research

Outsourcing Administrative Tasks

If you're bootstrapping a business and need your or your team's time to be devoted to high-value projects, outsource administrative tasks. Having someone manage your calendar, plow through mindless data entry, or transcribe meeting minutes can give you extra minutes back in your day.

  • Calendar scheduling
  • Meeting minutes
  • Greeting card sending
  • File management
  • Transcription
  • Reminder services
  • Client invoicing
  • Voicemail checking

Outsourcing Sales and Support

Similarly, there's a lot of administrative work in sales and support. If you need your reps purely devoted to outreach and demos — and not to data entry — it might be time to outsource.

  • Lead generation
  • Customer service
  • Expense report creation
  • CRM updating
  • Prospecting
  • Pre-meeting research

Outsourcing HR and Operations

Don't have the time or expertise to take care of your company's taxes or hiring? These are just a few of the jobs you can outsource. This cuts down on costly errors and draws on the expertise of others.

  • Recruitment
  • Job posting
  • Candidate follow-up
  • Candidate screening tests
  • Background checks
  • Contract management
  • Project management
  • Order fulfillment
  • Inventory management
  • IT support and network administration
  • Cybersecurity

Outsourcing Personal Tasks

Sometimes everything is going well at work but your personal life is suffering because of it. In this case, hire help with tasks like laundry, house cleaning, or grocery shopping to give you a better work/life balance.

  • Personal errands
  • School pickup and drop off
  • Meal preparation
  • Grocery shopping
  • Doctor appointment scheduling
  • Mail pickup and drop off

Outsourcing is a form of business delegation that can save you time, money, and energy better spent on growing your team or business. Consider outsourcing where it makes most sense for your company and foster a healthier work environment and better results.

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What Is Outsourcing?

Understanding outsourcing, special considerations.

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The Bottom Line

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Outsourcing: How It Works in Business, With Examples

outsourcing projects from usa

Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom.

outsourcing projects from usa

Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company's own employees and staff. Outsourcing is a practice usually undertaken by companies as a cost-cutting measure. As such, it can affect a wide range of jobs, ranging from customer support to manufacturing to the back office.

Outsourcing was first recognized as a business strategy in 1989 and became an integral part of business economics throughout the 1990s. The practice of outsourcing is subject to considerable controversy in many countries. Those opposed argue that it has caused the loss of domestic jobs, particularly in the manufacturing sector. Supporters say it creates an incentive for businesses and companies to allocate resources where they are most effective, and that outsourcing helps maintain the nature of  free-market economies on a global scale.

Key Takeaways

  • Companies use outsourcing to cut labor costs, including salaries for their personnel, overhead, equipment, and technology.
  • Outsourcing is also used by companies to dial down and focus on the core aspects of the business, spinning off the less critical operations to outside organizations.
  • On the downside , communication between the company and outside providers can be hard, and security threats can amp up when multiple parties can access sensitive data.
  • Some companies will outsource as a way to move things around on the balance sheet.
  • Outsourcing employees, such as with 1099 contract workers, can benefit the company when it comes to paying taxes.

Investopedia / Mira Norian

Outsourcing can help businesses reduce labor costs significantly. When a company uses outsourcing, it enlists the help of outside organizations not affiliated with the company to complete certain tasks. The outside organizations typically set up different compensation structures with their employees than the outsourcing company, enabling them to complete the work for less money. This ultimately enables the company that chose to outsource to lower its labor costs.

Businesses can also avoid expenses associated with overhead , equipment, and technology.

In addition to cost savings, companies can employ an outsourcing strategy to better focus on the core aspects of the business. Outsourcing non-core activities can improve efficiency and productivity because another entity performs these smaller tasks better than the firm itself. This strategy may also lead to faster turnaround times, increased competitiveness within an industry, and the cutting of overall operational costs.

Companies use outsourcing to cut labor costs and business expenses, but also to enable them to focus on the core aspects of the business.

Examples of Outsourcing

Outsourcing's biggest advantages are time and cost savings. A manufacturer of personal computers might buy internal components for its machines from other companies to save on production costs . A law firm might store and back up its files using a cloud-computing service provider, thus giving it access to digital technology without investing large amounts of money to actually own the technology.

A small company may decide to outsource bookkeeping duties to an accounting firm, as doing so may be cheaper than retaining an in-house accountant. Other companies find outsourcing the functions of human resource departments, such as payroll and health insurance, as beneficial. When used properly, outsourcing is an effective strategy to reduce expenses, and can even provide a business with a competitive advantage over rivals.

Criticism of Outsourcing

Outsourcing does have disadvantages. Signing contracts with other companies may take time and extra effort from a firm's legal team. Security threats occur if another party has access to a company's confidential information and then that party suffers a data breach. A lack of communication between the company and the outsourced provider may occur, which could delay the completion of projects.

Outsourcing internationally can help companies benefit from the differences in labor and production costs among countries. Price dispersion in another country may entice a business to relocate some or all of its operations to the cheaper country in order to increase profitability and stay competitive within an industry. Many large corporations have eliminated their entire in-house customer service call centers, outsourcing that function to third-party outfits located in lower-cost locations.

First seen as a formal business strategy in 1989, outsourcing is the process of hiring third parties to conduct services that were typically performed by the company. Often, outsourcing is used so that a company can focus on its core operations. It is also used to cut costs on labor, among others. While privacy has been a recent area of controversy for outsourcing contractors, it has also drawn criticism for its impact on the labor market in domestic economies.

What Is an Example of Outsourcing?

Consider a bank that outsources its customer service operations. Here, all customer-facing inquiries or complaints with concern to its online banking service would be handled by a third party. While choosing to outsource some business operations is often a complex decision, the bank determined that it would prove to be the most effective allocation of capital, given both consumer demand, the specialty of the third-party, and cost-saving attributes. 

What Are the Disadvantages of Outsourcing?

The disadvantages of outsourcing include communication difficulties, security threats where sensitive data is increasingly at stake, and additional legal duties. On a broader level, outsourcing may have the potential to disrupt a labor force. One example that often comes to mind is the manufacturing industry in America, where now a large extent of production has moved internationally. In turn, higher-skilled manufacturing jobs, such as robotics or precision machines, have emerged at a greater scale.

While outsourcing can be advantageous to an organization that values time over money, some downsides can materialize if the organization needs to retain control. Outsourcing manufacturing of a simple item like clothing will carry much less risk than outsourcing something complex like rocket fuel or financial modeling. Businesses looking to outsource need to adequately compare the benefits and risks before moving forward.

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Business Process Outsourcing—value-first outcomes

In a world of dynamic change, business process services can reinvent business performance, delivering sustainable value through optimizing operations.

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Access a new performance frontier

During times of great change—being able to drive value is paramount. In the wake of recent societal, industry and technology disruption, business process functions, including  finance ,  supply chain ,  procurement ,  human resources ,  marketing ,  sales and customer operations , and industry-specific services, such as  health ,  insurance  and  banking , have been severely disrupted.

The  operating model  is proving to be a linchpin. It can not only harness change but also adapt to feed the business strategy—achieving resiliency, agility, competitive advantage and better business outcomes. Accenture strategic managed services for operations is helping clients to optimize and transform business processes—enabling reinvention. 

outsourcing projects from usa

Reinventing enterprise operations

How optimizing operations can help to access a new performance frontier

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With more than 219K exceptional people in over 50 centers, our strategic managed service capabilities (AI, technology, data & specialized talent & process innovation at scale) provide insights for better decision making & crush the timeline to value.

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Intelligent Finance Operations

Providing real-time insights and agility so that you are a strategic business partner while managing day-to-day finance operations.

Sourcing and Procurement

Supply chain, compliance as a service, intelligent global business services, sales & customer operations, talent and hr, reimagine banking operations, virtual tours, what are managed services for operations.

outsourcing projects from usa

Business process outsourcing (BPO) has evolved to become strategic managed services for operations. 

Sustainable growth requires a new operating model, one that’s anchored around the customer and driven by data and intelligence to deliver exceptional experiences and outcomes.

To access the new performance frontier, organizations must accelerate operations maturity.  They need to address the vital ingredients of talent, data, applied intelligence, cloud and ecosystem of partnerships.

Activating data and intelligence on the digital core to transform operations is often out of reach for leaders who need it most. That’s where strategic managed service capabilities can help provide insights for better decision making and crush the timeline to value.

Today’s strategic managed services are far more than traditional BPO.  They are transformative, reduce risk and costs, and see suppliers become true partners, working together to lay the foundation for innovation.

Why are managed services for operations important?

Strategic managed services provide organizations with capabilities that enable reinvention. It frees business leadership to focus on product development, geographic expansion and strategic initiatives that drive sustainable growth, deliver excellent customer experiences, and attract and retain talent.  

Successful reinvention strategies are built on optimized operations, which can be measured across a spectrum of operations maturity (figure 1). There are 4 stages of operations maturity – foundational, automated, insight-driven and intelligent (operations reinventors) . The higher the maturity level of an organization, the more successful that organization will be at reaching the performance frontiers set by a total enterprise reinvention strategy.

Six capability measures

Reinventing operations

outsourcing projects from usa

Organizations can reinvent operations by defining a new performance frontier in the maturity journey. This means adopting a bold vision that is executed by unified leadership. Operational reinvention transformation draws on business process expertise, technology innovation and agile talent.

Operations transformation means organizations can “think big” and take bold moves to close the gap between aspirations and where they are today. By automating at scale, augmenting human talent with technology and committing to data-driven decision making, organizations can optimize their operations maturity journey. And with a flexible operating model that combines multidisciplinary teams and technologies across an ecosystem of partners, organizations can improve overall performance and sustainability.

Enabling value

With more than 219,000 exceptional people in over 50 centers, our strategic managed service capabilities (AI, technology, data and specialized talent and process innovation at scale) provide insights for better decision making and crush the timeline to value.

Accenture has invested more than $350M to develop an innovative AI-powered automation platform, SynOps to enable remote working and create an agile and flexible digital workforce. Our tools and assets have helped to minimize service disruption, for ourselves and our clients.

We have over 31 years of experience in strategic managed services for operations and have the largest most agile specialized workforce on the planet. We invest in our people and have transformed more than 110,000 roles to higher value, business outcomes focused roles.

Accenture Synops Logo 724x432 PNG

Managed services for operations by the numbers


clients in 45+ languages across 40+ industries.

automation solutions in 29,000+ projects globally accelerating business and IT processes roles.

in realized cost optimization and positive cashflow and productivity savings of 165+M annualized hours.

What we think

outsourcing projects from usa

Talent & Organization

The CHRO as a growth executive

Focusing the power of data, tech and people to accelerate reinvention—and a new vision for growth.

outsourcing projects from usa

Supply chain & Operations

Can you see your Scope 3?

Can you see and act on emissions across all supplier tiers? You can now. Accenture's research and new tools to shed light on Scope 3.

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Making finance a predictive powerhouse

Transform finance to reduce planning time, improve forecasting accuracy and free up employee time.

Case studies

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Stanley Black & Decker retools for growth

Intelligent finance operations is generating $70 million in business value, improving efficiencies 50% and supporting their growth agenda.

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Oil and gas company improves productivity by 45%

How data-driven supply chain, finance and HR operations helped increase agility. 

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Energy company captures $240M in cost savings

A multinational energy manufacturer transforms procurement sourcing and spend.

outsourcing projects from usa

Ultimate Guide To Outsourcing IT Projects

it projects outsourcing

There’s no denying that outsourcing IT projects has made digital acceleration more accessible to the general public. For the first time in outsourcing history any company anywhere in the world can receive instant access to quality developers available.

Of course, this has drawn considerable attention to adoption of technology, giving rise to the concept of digital distinctiveness. In other words, gaining an advantage over the competition today boils down to who has the finest technology and IT expertise on hand.

This is easy to notice when you consider that the most successful organizations in any area are those who understand how to use the best software solutions.

So,  let’s us walk you though and learn more about how to outsource your IT project, what components you may outsource.

What Is the Best Way to Outsource an IT Project?

Business leaders have had a variety of experiences with outsourcing their software development projects due to the fact that outsourcing is a relatively new sector with little over a decade behind it.

You’ve heard terrible stories about projects that provided completely different products than those asked, as well as exciting ones about firms that saved a tone of money on development while still getting a better solution than they expected.

All of this begs the question: what went wrong for the first group? What determines whether or not IT outsourcing is successful?

Well, the answer to that question may be more straightforward than it appears. Outsourcing isn’t about finding the cheapest answer – it’s about receiving the most value of return on investment, contrary to popular belief. To put it another way, if you want to perform outsourcing well, you must prioritize cost-effectiveness.

The first and most critical step is to find the correct provider. Choosing the ideal offshore firm can be difficult for many people, especially with the large number of them available around the world. Fortunately, there are a few things you can always concentrate on, including:

Communication and Workflow: The most important phase in outsourcing is communications and workflow. Your Development Outsourcing partner should be comfortable in your language or English. Through out production cycle, the workflow should also reflect yours.

Security protocols that are standardized: In today’s increasingly tech-driven society, cybersecurity is more critical than ever. Ensure the IT business you choose has up-to-date security processes in place to protect all of your data and software.

Software Engineers of the Highest Quality: Outsourcing software development allows you access to global IT expertise. An outsourcing company’s mission is to find the finest software developers in the area and use their skills to create the best possible product for you.

Quality Experience: Always evaluate your possible IT partner’s referrals, former clients, and completed projects. This data will provide you with insight into the IT firm’s performance, workflow style, and software product quality.

Full Service: What you require today may not be what you require tomorrow. The top outsourcing organizations specialize in a wide range of industries, allowing them to approach your project holistically and with a wealth of knowledge.

What Project Elements Should Be Outsourced?

Outsourcing IT projects has the advantage of allowing you to outsource as many of the IT project as you need.

Some organizations outsource the work of an only one developer who can assist patch a vulnerability in a matter of weeks, while others recruit a group of System Architects to restructure and optimize their IT infrastructure, and still others easily outsource the entire process to a third party and relieve themselves of all responsibility.

Let’s take a look at the three primary types of IT outsourcing:

1. Teams in charge of delivery

Today, delivery teams are probably the most frequent type of IT outsourcing. Simply described, a Delivery Team is a self-contained group of engineers who operate alongside the client’s own team. If you opt to engage with a top software development firm, you can expect to receive a custom-fit team in a matter of days.

Delivery Teams are an excellent option for firms who want to produce high-quality software but lack the necessary infrastructure or personnel. This allows businesses to get their projects up and running quickly while also relieving internal resources by moving workloads to their development partners.

2. Staff Augmentation

If your business already has an existing IT or software development team, Staff Augmentation may be the solution you’re looking for. This solution provides a “Extended Team” that acts as an extension of your local team.

Extended Teams will report directly to your company’s managers, join daily meetings, and perform any other tasks that in-house engineers perform to get things moving.

Staff Augmentation or IT staffing is a great option for firms who need to quickly add top-notch software developers to their company. This manner, you can quickly locate the ideal person for temporary positions or hard-to-fill, increasing  efficiency and project scalability. You’ll also be avoiding everything to do with locating, hiring, and retaining competent software engineers.

3. Outsourcing on a project basis

Project-based outsourcing or PBO, is what most people think of when they think of software outsourcing. It is a full-cycle process in which a software services provider manages all aspects of software development from beginning to end. As the client, all you have to do is figure out what you want done and give input as the project advances.

This concept allows you to get rapid access to the tools you need to complete complicated and time-sensitive tasks without having to hire IT staff. Nonetheless, keep in mind that having a well defined project scope will ensure that the end product is exactly what you expected.

Your software development company will also offer advice on project management, technology stack selection, and any other area where the customer requires assistance.

When Should My IT Project Be Outsourced?

Offshoring becomes the most practical alternative in a variety of situations. Here are a few of the most popular.

When you don’t have enough in-house talent IT Talent: On a worldwide basis, top-tier offshore developers are in short supply. To tackle this problem, IT companies use remote techniques.

When you’re in need of specialized personnel: Many projects have highly specialized technical jobs or temporary employment that aren’t appealing to top developers.

When working on a large project, keep the following in mind: Taking up a complicated job necessitates a great deal of knowledge and technical expertise. Without them, it’s all too easy to hit speed bumps and waste time.

When working under pressure, getting the appropriate outcomes at the right time might mean the difference between success and failure. When you need to scale your skills, offshore developers can help.

When you require experienced assistance and consulting: Software outsourcing businesses offer consulting and support services for projects that have run into difficulties.

When you wish to save money, IT development businesses can fully eliminate the expenditures of recruiting in-house employees while yet delivering the same or better perks.

Getting the Most Out of IT Projects Outsourcing

Implementing these key points will, for the majority of portion, put you on your way to a value-driven and seamless outsourcing experience.

Have defined objectives: Outsourcing services, since we all realize, make it a lot easier for any firm to meet project goal. You, on the other end, are in better position to decide the goals that your outsourcer must meet. Which is why having a better idea of what you really want to attain and the outcomes you want in a particular length of time is essential to creating a unique technological solution that meets your goals.

Set your priorities straight: If your outsourcer will assist you in developing a clear project plan, you would be the one to give input on what is being done and what still needs to be done. As a result, you’ll need to say clearly what’s most important to your organization and clients. So stay focused on your goals and contribute as much as possible throughout the development process.

Draw a clear picture: Bringing a good concept to the table is no longer enough to create a successful software solution. You must describe and paint a clear image of an experience so that your software development partner can turn it into a reality. Your project will move faster through the wireframing and drawing stages if the picture is clear.

Make a list of everything you require: Your business’s IT stack is certain to have extremely specific requirements. And, like every other projects, yours will need a team of developers who are in the same technology stack as well as your sector. Compile a list of what you’ll want from your IT provider and inquire about the various service models and solutions they may provide to see how they might fit into your project.

Put it all down on paper: Service Level Agreements (SLAs) are the soul of outsourcing agreements. Put everything on paper always if you want to include responsibility in your project (which you should). Proper documentation streamlines any process and makes everything more visible. Your outsourced team will assist you in selecting the optimal option to meet your objectives on time and on budget.

IT Outsourcing - United States

  • United States
  • Revenue in the IT Outsourcing market is projected to reach US$185.50bn in 2024.
  • Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 10.71%, resulting in a market volume of US$278.70bn by 2028.
  • The average Spend per Employee in the IT Outsourcing market is projected to reach US$1.10k in 2024.
  • In global comparison, most revenue will be generated in the United States (US$185.50bn in 2024).

Key regions: China , United States , Brazil , Netherlands , United Kingdom

Definition: The IT Outsourcing market refers to the external contracting of IT functions, services, or projects instead of relying on company-owned resources. By outsourcing IT tasks (e.g., to IT suppliers or software developers), enterprises are able to focus on their core functions and save internal resources and costs (e.g., office space, maintenance, and utilities). Thus, outsourcing teams becomes a viable cost resilience strategy in an environment where companies are looking to save money more than ever.

In an IT context, these activities include IT administration, IT application, and web hosting services. Non-IT-related outsourcing services are excluded.

IT Outsourcing contains four distinct markets that are based on different services:

  • Administration Outsourcing refers to the market for services associated with the external sourcing of typical IT administration tasks such as hardware supply, setup, configuration, maintenance, security, and support.
  • Application Outsourcing refers to the market for all IT application services in a software production context, spanning from requirement assessments to concept and design of software applications.
  • Web Hosting includes all types of internet hosting services that allow companies or individuals to provide access to their web page via the World Wide Web.
  • Other IT Outsourcing refers to aggregated revenues of the types of IT outsourcing that are not specifically mentioned in the other IT Outsourcing markets, such as infrastructure outsourcing, network outsourcing, and managed services.

Additional Information:

The IT Outsourcing market comprises revenues, revenue change, average spend per employee, and revenues of the outsourcing types. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Accenture, Capgemini, NTT, and Hewlett Packard Enterprise.

For more information on the data displayed, use the info button right next to the boxes.

  • Application outsourcing, such as ScienceSoft, Arcanys, and SumatoSoft
  • Administration outsourcing, such as Conduent, Genpact, and ADP (Automatic Data Processing)
  • Web hosting, such as GoDaddy, Bluehost, and Amazon Web Services
  • Infrastructure outsourcing, such as IBM Global Technology Services, Wipro Infrastructure Engineering, and Cognizant Infrastructure Services


  • Business process outsourcing, such as IBM, Infosys, and NTT Data
  • Professional payment outsourcing, such as Paychex, ADP (Automatic Data Processing), and WNS Global Services
  • Infrastructure as a service, such as Microsoft Azure, Alibaba Cloud, and DigitalOcean
  • Platform as a service, such as Microsoft Azura, Google Cloud, and Engine Yard
  • Non-IT related outsourcing

IT Services

  • IT Consulting & Implementation
  • Business Process Outsourcing
  • Administration Outsourcing
  • Application Outsourcing
  • Web Hosting
  • Other IT Outsourcing
  • Other IT Services
  • Analyst Opinion

The United States is a leading player in the global IT outsourcing market, with a significant share of the market. The market has been growing steadily in recent years due to several factors. Customer preferences: Customers in the United States are increasingly looking for cost-effective solutions to their IT needs. Outsourcing provides a way for companies to reduce costs while still maintaining high-quality services. Additionally, as technology continues to evolve, companies are looking for specialized skills that may not be available in-house. Outsourcing provides access to a broader range of skills and expertise. Trends in the market: One trend in the IT outsourcing market in the United States is the increasing use of cloud-based solutions. Cloud-based outsourcing provides several benefits, including scalability, flexibility, and cost-effectiveness. Additionally, the use of artificial intelligence and machine learning is becoming more prevalent in outsourcing services, providing greater efficiency and accuracy.Another trend in the market is the increasing use of nearshoring, where companies outsource to countries closer to the United States, such as Mexico or Canada. Nearshoring provides several benefits, including cultural similarities, time zone alignment, and reduced travel costs. Local special circumstances: The United States has a highly skilled workforce, which makes it an attractive destination for outsourcing services. Additionally, the country has a strong legal system and intellectual property protection laws, providing a secure environment for outsourcing services. Underlying macroeconomic factors: The growth of the IT outsourcing market in the United States is driven by several macroeconomic factors, including the increasing demand for cost-effective solutions, the need for specialized skills, and the rapid pace of technological change. Additionally, the COVID-19 pandemic has accelerated the trend towards outsourcing as companies look for ways to reduce costs in the face of economic uncertainty.

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27 Eye-Opening Outsourcing Statistics (2024 Update)

  • April 2, 2021

Jessica Edgson

Outsourcing Statistics

As our latest outsourcing statistics will reveal, an increasing number of organizations worldwide are looking to outsource some of their essential and non-essential business functions to third-party businesses to streamline workflow and save on costs. Today outsourcing has become a way of life for many small businesses and large firms. 

In this article, you will find out all there is to outsourcing, including the many benefits of outsourcing, the top countries in terms of outsourced jobs, the market value of this growing industry, the coronavirus impact, and much more. 

But first, be sure to check this list of most intriguing facts on outsourcing: 

Top 10 Outsourcing Statistics for 2024  

  • Around 300,000 jobs are outsourced by the US annually.
  • The top reason for outsourcing (70%) is cost reduction.
  • The total IT budget in 2020 grew from 12.7% in 2019 to 13.6%.
  • 58.8% of US marketers saw no covid-related changes in the outsourcing marketing activities.
  •  Larger companies are 66% more likely to outsource than small businesses.
  • 36% of workers in the US are part of the “gig economy.”
  • The global outsourcing market was worth $92.5 billion in 2019.
  • By 2025, the global IT outsourcing market will be worth $397.6 billion.
  • 83% of IT leaders are planning to outsource their security to an MSP in 2021.
  • 24% of small businesses outsource to increase the efficiency of their business.

General Outsourcing Facts and Stats

The definition of outsourcing is hiring a person who doesn’t work in your company to perform your company’s services. Most companies use outsourcing to reduce costs. Outsourcing can link to various job positions, from IT to customer support. 

This business strategy was first recognized in 1989 . 

1. 64% of leading companies have chosen RPA (robotic process automation) as a digital enabler.

The world-renowned Cloud is just some 4% ahead, with 68% of the leading industries employing Cloud as one of their digital enablers.

Deloitte outsourcing statistics also report that there is no concern over the performance, as it was the case in 2018 when 50% of the surveyed expressed their qualms. However, nowadays the biggest concern revolves around remaining competitive and whether one should go for one digital provider or more.

2. Owing to the pandemic, 48% of businesses worldwide will increase RPA adoption by 5% or more.

(Businesswire) (UiPath)

The post-pandemic challenges will most likely be dealt with through automation, judging by outsourcing statistics. That said, 57% of employers claim that their employees are pretty anxious about these workplace changes. Many of them are afraid they won’t be able to succeed with their work due to automation and stress caused by the pandemic.

75% of the companies are using RPA in order to support the remote workforce.

3. Around 300,000 jobs are outsourced by the US annually.  

When it comes to the United States outsourcing statistics, a large number of jobs are being sent overseas, leaving hard-working Americans without employment. 

4. India’s IT outsourcing industry will witness a CAGR growth of 7.25% by 2025, reaching INR 8,830 billion ($121,335,149.20).

(Outsource Accelerator) (Classic Informatics)

India is the leading IT outsourcing country in the world. Why India? There are many reasons. For example, India has no communication barriers since it’s one of the largest English-speaking countries. Furthermore, outsourcing is far cheaper compared to other developed countries. 

In the same fashion, Indian outsourcing industry statistics imply that by 2023/2024, the country will have the highest number of software developers . India might even overtake the US in this matter. 

5. IBM is the largest outsourcing company in the world.

(Insider Monkey)

IBM has a revenue of $76.5 billion and a market cap of $105.66 billion. In addition to that, based on the outsourcing jobs facts, there are 383,800 people working for this multinational technology giant based in New York. 

The silver medal belongs to Deloitte, a company with a revenue of $47.6 billion. Accenture, a company from Ireland, comes third with $44.7 billion in revenue.

6. The top reason for outsourcing (70%) is cost reduction.  

The second reason is flexibility (40%). Speed to market is important to 20% of businesses. Access to tools and processes and agility matter to 15% of the surveyed, according to Deloitte’s outsourcing statistics graphs.

7. 14.4 million is the number of workers US overseas affiliates hired in 2018.

(The Balance)

The said companies employed people in various sectors, spanning from technology and call centers to human resources and manufacturing. 

8. By the end of 2021, the overall value of outsourced IT services will surpass  $413.72 billion.

(Daxx) (Statista)

The total IT budget in 2020 grew from 12.7% in 2019 to 13.6%. In 2020, middle-sized tech companies were responsible for the largest IT outsourcing industry growth. 

Despite the pandemic, some tech businesses even decided to increase their IT budgets, outsourcing statistics from 2020 show. Others collaborated with their offshore and nearshore IT outsourcing partners.

9. 58% of companies started adopting Artificial Intelligence.

AI is a new rising trend that became accepted by many companies. Based on one survey , 29.4 of workers are expected to undergo additional training as a consequence of intelligent automation implementation. 

On that note, companies that already use RPA are more likely to accept AI adoption.  

10. 58.8% of US marketers saw no covid-related changes in the outsourcing marketing activities. 

U.S. outsourcing statistics from 2020 show only 19.4% of marketers observed a change in the outsourcing marketing activities during the pandemic.

11. 36% of workers in the US are part of the “gig economy.”  

The gig economy is made up of freelancers and people who take short-term contracts in exchange for payment, which also includes freelancers operating in the outsourcing sector.

Freelance statistics show they are very satisfied with the income. In a like manner, the highest paying gig economy job in 2020 was massage therapy. Their average hourly rate was $27.84.

Outsourcing Facts and Figures — Market Value and Cybersecurity

How much is the outsourcing market worth, and what’s the role of cybersecurity?

12. The global outsourcing market was worth $92.5 billion in 2019.

(Statista) (Statista)

Americans had the largest revenue share. As the US outsourcing statistics from 2019 report, its outsourcing market was worth $62 billion. Europe, the Middle East, and Africa were close behind, while the Asian Pacific region had the smallest global revenue share. 

13. $66.5 billion was the global revenue of IT outsourcing in 2019.

But wait, there’s more!

Another $26 billion in global revenue was generated by BPO (business process outsourcing) the same year, according to outsourcing statistics from 2019.

14. By 2026, the global IT outsourcing market will be worth $425.19 billion.

(Statista) (GlobeNewswire)

It’s expected that it will register a CAGR of 4.5% between 2021 and 2026. When it comes to market shares, India will be one of the leading countries. 

Its IT-BPM already helped with the country’s socio-economic growth. What’s more, many leaders in India, political and business, find it to be the country’s future. On that note, Bengaluru is proclaimed as the best city for an IT professional in India. 

Plus, India’s IT outsourcing market is expected to be worth INR 8,830.14 billion ($120.67 billion) by 2025.  

15. 65% of CISOs outsourced 21%–30% of their cyber operations, outsourcing statistics report.

Most of the small and mid-sized businesses don’t have big budgets for cybersecurity. This is where outsourcing comes in handy. About 14% of companies report outsourcing over 50% of their cybersecurity operations. 

16. 83% of IT leaders plan to outsource their security to an MSP (manage service provider) in 2021.

(Security Magazine)

The main reason for this move comes as a result of COVID19. Namely, in 2020, 89% of the surveyed industries had to speed up the digital transformation. Naturally, this led to stretching the existing resources and increased exposure to cyber attacks .

Many companies had cyber challenges, so it’s only logical that these outsourcing trends from 2020 will continue in 2021.

17. The MSP market is to reach $41 billion by 2022 due to outsourcing security functions.

Security operations are the most important cybersecurity services that should be outsourced. Since companies need 24/7 monitoring, the most important outsourcing service is having a security team that will protect all the important data (website, communication channels, database). Equally important is creating the security strategy and security architecture. 

However, if you want to have more control over the decisions, hiring a consultant is a better option than hiring an outsourcer. 

Small Business Outsourcing Statistics

How important is outsourcing to small businesses, and should they hire outsourcers?

18. Larger companies are 66% more likely to outsource than small businesses (merely 29% of them outsource). 

(Time Doctor)

Exactly why this is so isn’t clear. Yet, it could be that smaller companies (fewer than 50 employees) don’t have the financial means to invest in outsourcing services, unlike bigger companies that have more financial resources at their disposal. 

19. Around 37% of small businesses use outsourcing to handle at least one of their business processes, the latest offshoring statistics indicate.

This could be anything from IT and HR operations to customer service and data protection. 

For instance, accounting and IT services make up 37% of all outsourced jobs, whereas digital marketing makes up another 34%. 

20. 24% of small businesses outsource to increase the efficiency of their business.

Another 18% do so to get expert assistance; 16% do it to be more flexible; lastly, according to outsourcing statistics, 15% do it to give more free time to their employees. 

21. The top three ways outsourcing can help small businesses are — generating profit, growing revenue, and improving cash flow. 

(Neil Patel)

In essence, the top five challenges small businesses face are hiring new employees (50%), increasing profit (46%), employee healthcare (44%), growing revenue (39%), and managing cash flow (34%). 

Generally, by outsourcing, you hit two birds with one stone.  How? Outsourcing eliminates the need for hiring employees and buying employee healthcare while still providing a solid boost to those mentioned above.

Outsourcing Statistics by Industry

Which industry has the most success with outsourcing?

22. Accounting is the most outsourced industry sector.

37% of small businesses outsource accounting and finance . The same percent of businesses outsource IT, while 34% use outsourcing for digital marketing.

23. 24.5% of all organizations are going to increase outsourcing efforts or outsource for the first time in 2021.

Companies that have between 10,001 and 50,001 workers are most aware of how vital outsourcing is. 61.1% of the big companies are ready for the said investment. 

51.6% of businesses with 1,000—10,000 employees are going to do the same.

24. Statistics on outsourcing show 70% of the IT industry market worth will originate from outsourcing by the end of 2021.

Based on the estimations, the IT industry will be worth $413 billion by the end of this year. And guess what? 70% of the mentioned money will come from outsourcing.

Technology is constantly evolving, so companies need to make sure to follow the trend. Over 94% of organizations using IT outsourcing make due improvements by using cloud services.

25. HR consulting is the most common service among HR outsourcing organizations.  


HR outsourcing statistics imply that HR consulting is the most common service among HR outsourcing organizations (45%). 

The second most common service is benefits administration (36%), followed by time tracking (24%) and insurance services (19%). Only 10% of services are associated with performance management.    

26. 70%–80% of the finished manufactured products are outsourced.

To cut down the costs of labor, numerous manufacturing companies turn to outsource. Based on the outsourcing cost savings statistics, China is the most popular country for manufacturing outsourcing since the labor cost is cheaper . 

In other words, the minimum wage is $162–$358 per month, which means that companies can save 30%–80% . Yet, this is rather higher than in India, where monthly wages vary from $66 to $202.

27. When it comes to the banking industry, 40% of help desk positions are outsourced.

Help desk specialists maintain the relationship between the company and the customer. They also help customers with questions and technical support. On top of that, 85% of customers are willing to pay more money to receive an improved help desk experience. 

How common is outsourcing?

(Outsource Accelerator) (Clutch)

Outsourcing is incredibly common. Over one-third of small businesses use outsourcing to help them become more efficient, increase their skill, and give their employees more free time. 

In fact, many companies (small and big) use outsourcing to reduce their costs and have more flexibility. India is the leading country globally when it comes to IT outsourcing, followed by the Philippines and the US. 

What percentage of US companies outsource?

(Outsource Accelerator)

68% of US companies outsource to low-cost countries. The most outsourced services are accounting, IT service, digital marketing, development, human resources, and customer support. 

The biggest US outsourcing company is IBM which currently has 383,800 employees, a revenue of $76.5 billion, and $153.4 billion in assets. Deloitte holds second place, with a $47.6 billion revenue and 330,000 employees.

What percentage of American jobs are outsourced?

While there is no definitive answer — keeping track of outsourcing contracts at any moment is incredibly difficult. What we do know, however, is that each year around 300,000 jobs are being sent overseas. 

In other words, that’s a huge chunk of US jobs being handed over to other countries.

Which countries outsource the most?

The US is the leading outsourcing country as it made 84.2% of outsourcing deals in 2017. The UK and Australia take second place on the leading outsourcing markets list. 

In terms of the top countries where work is being outsourced, we have India with its IT specialists. Next, the Philippines, which specializes in customer service roles . 

Ukraine and Poland are also becoming popular, especially in the IT sector. On the other hand, China is the most popular country for manufacturing outsourcing .

How much has outsourcing increased?

Quite a bit. In 2015, it sat at $88.9 billion, only to drop to $76.9 billion in 2016. In 2017, it climbed back to $88.9 billion, then dropped to $85.6 billion in 2018 before rising to $92.5 billion in 2019. 

The market statistics show it fluctuated quite frequently over the past five years. 

Is outsourcing increasing or decreasing?

Due to the pandemic, the outsourcing industry is expected to increase. 

First of all, since companies started to incorporate a remote working model, people have become more comfortable with virtual meetings, interviews, and hiring. 

Secondly, the companies are trying to preserve their money due to the economic crisis, leading them to turn towards outsourcing. 

And lastly, outsourcing is still one of the essential tools for client organizations and strategies. 

How big is the outsourcing industry? 

The global outsourcing industry was worth $92.5 billion in 2019. The reports show us that we can expect it to reach $114 billion by 2025.

Therefore, the outsourcing industry is pretty big. In fact, along with the oil and gas, the outsourcing industry is one of the biggest benefactors to the global economy. 

By now you should have a much better understanding of why companies outsource. 

Whether they be budding startups or large corporations, the target goals are the same — cutting costs, working on core business functions, getting expert help, and so on.

Hopefully, our outsourcing statistics, as well as our general overview of global outsourcing companies, satiated your curiosity and gave you more insight into how the outsourcing market works. 

  • Businesswire   
  • Classic Informatics  
  • Deloitte   
  • ExtensisHR   
  • GlobeNewswire  
  • Insider Monkey   
  • Outsource Accelerator
  • Security Magazine   
  • Statista   
  • The Balance
  • Time Doctor

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Jessica is a writer and editor from Cape Town, South Africa. She started her journey studying journalism and media studies, along with English literature. Since then, she’s written for many different websites on a number of subjects. She loves any topic that she can really sink her teeth into, and she makes sure that everything she writes is thoroughly researched.

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Mastering IT Project Outsourcing: A Comprehensive Guide to Successful Collaboration

Table of Contents

In the ever-evolving landscape of Information Technology (IT), businesses continually invest in projects to stay competitive, enhance efficiency, and adapt to technological advancements. Surprisingly, one in six IT projects experience a cost overrun of a staggering 200% on average. This alarming statistic unveils the hidden challenges and complexities that companies face in the realm of IT project management. This revelation emphasizes the critical need for businesses to adopt more adaptive and resilient project management strategies, including agile methodologies and robust risk mitigation approaches, to navigate the ever-changing terrain of IT projects successfully. The strategic nature of IT projects extends beyond the immediate goals of staying competitive and enhancing efficiency. These initiatives often lay the foundation for future innovation and growth. As technology continues to evolve, businesses that embrace and effectively manage IT projects position themselves not only for immediate success but for sustained growth and resilience in the ever-changing world of Information Technology.  

What is IT Project Outsourcing

IT project outsourcing involves companies employing external experts for specific tasks, such as network configurations or software implementations. This strategic collaboration allows companies to benefit from the outsourcing companies specialized knowledge, resulting in efficient project execution. Beyond efficiency, outsourcing provides access to a diverse talent pool, fostering innovation and agility. In essence, it empowers businesses to focus on core competencies while leveraging external expertise for optimal outcomes.

IT project services can cover a broad spectrum, including project management coaching, portfolio and program management, documentation standardization, change management, stakeholder engagement, resource management, vendor management, risk management, and project recovery. These services can collectively contribute to the success of IT projects by enhancing communication, managing resources, and mitigating risks. From guiding effective project management strategies to addressing challenges, each aspect plays a crucial role in ensuring the overall effectiveness and smooth implementation of IT initiatives.

Advantages of IT Project Outsourcing

Understanding the reasons behind seeking outsourced IT project services is crucial. Once you have a clear understanding of your needs, you can then engage a team that aligns with your goals. Here are some advantages to outsourcing your company’s IT projects:  

  • Access to highly-skilled IT professionals  

Outsourcing IT projects offers businesses a crucial advantage by providing access to highly skilled IT professionals. This strategic move provides a streamlined solution, enabling companies to leverage specialized expertise that may be unavailable in-house. This external talent pool enhances efficiency, fosters innovation, and ensures optimal performance in a rapidly evolving technological environment.

  • Cost savings

Outsourcing IT projects delivers significant cost savings by eliminating in-house onboarding, training, and upskilling expenses. This strategy allows companies to flexibly pay for services on a project basis, minimizing costs. Additionally, it capitalizes on diverse talent pools, fostering competitive pricing and ensuring financial efficiency.

  • Accelerated project timelines  

Outsourcing IT projects accelerates timelines by accessing external expertise and specialized skills not available in-house. The model allows swift onboarding, bypassing lengthy recruitment, and brings established workflows, enabling progress to begin. This collaborative approach can be beneficial in meeting project milestones effectively and maintaining a competitive edge in the dynamic landscape of IT solutions.

Disadvantages of IT Project Outsourcing

It is equally crucial to comprehend the disadvantages associated with outsourcing your IT project. Here are some downsides to entrusting your company’s IT projects to an external company:  

  • Limited authority

The restricted ability to assert control over decision-making processes may hinder the implementation of a cohesive and streamlined project strategy. It could lead to challenges in aligning goals and priorities, potentially impacting the project’s efficiency. The delineation of authoritative powers may result in a lack of agility, making it difficult to adjust quickly to changing circumstances. Striking the right balance between collaboration and decisive decision-making becomes crucial to navigating the complexities of such outsourcing.

  • Communication issues

Misalignment in expectations and unclear guidelines may lead to misunderstandings, delays, and even project failures. In order to help address communication issues, establishing a clear scope, leveraging collaboration tools, and maintaining open lines of dialogue is essential. Regular updates, milestone reviews, and a shared understanding of project goals can mitigate the risk of miscommunication.

  • Decreased security

Entrusting an IT project to another company for outsourcing introduces potential security risks. The sharing of sensitive data and access to proprietary systems may elevate the risk of incidents and unauthorized access. Certain security protocols and different standards between organizations can create vulnerabilities. Ensuring robust contractual agreements, implementing stringent security standards, and conducting regular audits are imperative to mitigate these risks.

Essential Tips for Outsourcing Your IT Project Effectively

To optimize key advantages and minimize potential disadvantages, it is essential to adhere to the following guidelines when outsourcing IT projects successfully:

  • Questions to Consider When Outsourcing IT Projects

Being well-informed about crucial aspects, such as the project sponsor’s identity, the primary contact for the outsourced team questions, and the individual responsible for endorsing milestones, is essential for ensuring project success. These factors collectively contribute to streamlined communication and efficient decision-making, laying the groundwork for successful project execution.

  • Begin with a small project

Starting with a smaller project allows for a systematic evaluation of both the process and the outsourced company. Breaking down a sizable project into manageable components provides the team with the necessary time and space to navigate challenges, optimize processes, and ensure success before scaling up.

  • Adopt a Clear Project Management Approach

A crucial aspect of successful IT outsourcing is the adherence to a robust project management methodology from the outsourcing firm. Whether employing the structured Waterfall model, the adaptable Agile approach, or the iterative Scrum framework, a well-established methodology lays the foundation for effective collaboration and project execution.

  • Implement Reliable and Accessible Ways of Communication

Facilitating a continuous feedback loop during the project process enhances efficiency and promotes smoother operations. Establishing accessible communication channels for developers, project managers, testing engineers, and other key stakeholders is imperative. Defining regular meeting schedules and identifying essential attendees is equally important. Decisions regarding the frequency of meetings, whether weekly, bi-monthly, or more frequent, should align with the project’s structure.

  • Emphasize Transparency in IT Outsourcing Requirements

A common error when outsourcing involves assuming that the provider inherently understands your needs. Hiring a team for their skills in executing your vision and achieving your desired outcome requires clear communication. Establish clear and measurable expectations. Provide detailed information about your desired outcomes, surpassing what may initially seem necessary to ensure a comprehensive understanding.

  • Select Your Provider Thoughtfully

Opting for a provider solely based on low overall costs can lead to unforeseen expenses through delays or project rework. Instead, analyze the provider’s cost rate and thoroughly assess the proposed services and fees to ensure alignment with your needs and budget. Some projects may demand specialized expertise, time, or resources, potentially resulting in higher costs despite outsourcing.

Optimize Your IT Project Success with PSM Partners

PSM Partners specializes in tailored Project Management Office (PMO) services and IT consulting for businesses. Our seasoned consultants work closely with your IT team, ensuring efficient project planning, management, and guidance for successful outcomes.

Our Deployment Services team expedites project timelines, regardless of complexity, minimizing risks. We handle Communications, Coordination, and Scheduling for users, ensuring clarity. With continuous monitoring and consultant support, we navigate challenges for successful IT project outcomes.

Choose PSM for enhanced project delivery and tangible results. Contact us at (312) 940-7830 for more on our PMO consulting or Deployment Services.

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About the Author

Taylor Friend

Taylor Friend

I'm a goal-oriented Strategic Alliance Manager who is enthusiastic about building and nurturing collaborative relationships that drive business success. My commitment lies in establishing, overseeing, and expanding partnerships that generate greater business opportunities and foster revenue growth for all stakeholders.

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The top 10 outsourcing trends for 2023: stay ahead of the curve.

outsourcing services for small businesses in 2023

Outsourcing has become a critical strategy for businesses looking to stay on top. Companies are becoming mindful of the potential of outsourcing services for small businesses in 2023. It has become essential as the demands of the global market increase.

Outsourcing allows businesses to enjoy advantages such as:

  • Specialized expertise
  • Access to the latest technologies
  • Streamlined business processes 
  • Cost saving 
  • Increased efficiency and productivity
  • Flexibility
  • Focus on core tasks 

Selecting the right outsourcing partner can help companies improve efficiency and optimize business processes. It will help them reach new levels of success.

Outsourcing companies are still essential to transforming the business landscape. As businesses aim to improve operations, outsourcing marketing has become a trend to watch. The market size for outsourcing services is witnessing significant growth. Its compound annual growth rate (CAGR) highlights the significance of this factor in modern corporate strategy. The top 10 outsourcing trends for 2023 are crucial for businesses to stay ahead. 

Explore the top ten outsourcing trends for 2023 with us. We will highlight the game-changing strategies that enable businesses to succeed nowadays. It will include insights on outsourcing services tailored to small businesses.

Top 10 Outsourcing Trends for 2023 

1. blockchain technology in outsourcing.

Blockchain technology is a game-changer in the evolving field of outsourcing trends. A decentralized, unchangeable ledger called blockchain is essential for outsourcing. Ensuring the recording and verification of transactions provides security and transparency. 

Utilizing blockchain allows businesses to build trust and remove intermediaries from outsourcing contracts . Moreover, it reduces costs and streamlines operations. The benefits of blockchain in outsourcing cover several industries, including the following:

  • Supply chain management

The increasing popularity of blockchain technology for outsourcing services for small businesses in 2023 is remarkable. Blockchain enables companies to access secure and cost-effective solutions. It gives them an edge over their competitors. 

Companies that adopt blockchain technology can level up their outsourcing operations. It promotes innovation, efficiency, and trust in their projects. 

2. Cloud-Based Outsourcing Solutions

Businesses that want to stay ahead should be aware of the growth of cloud-based outsourcing solutions. This approach has become popular because of the benefits it offers.

Cloud technology optimizes operations and enhances flexibility . It is one of the most effective options for outsourcing. Businesses can utilize the convenience and flexibility of the cloud to do the following: 

  • Access critical resources
  • Collaborate seamlessly
  • Store data securely

It boosts productivity and makes remote work arrangements and scaling possible. 

For instance, businesses have outsourced their IT infrastructure to cloud service providers. It results in cost reduction, increased efficiency, and improved performance. Companies have also used cloud platforms to outsource software development and customer support. It helps them meet client expectations and tap into a global talent pool.

3. Smart Sourcing with AI and Machine Learning

A revolutionary development uses Artificial Intelligence (AI) and Machine Learning (ML) for innovative sourcing. It involves using AI and ML technologies to make intelligent decisions about outsourcing.

AI and ML algorithms can analyze large amounts of data to identify patterns and trends. It can help businesses choose the best outsourcing partners and improve their operations.

There are many uses for AI and ML in outsourcing. It ranges from risk analysis and vendor selection to contract administration and performance evaluation. Small businesses can enjoy innovative AI and ML for their outsourcing needs. It simplifies procedures, lowers expenses, and provides high-quality services. 

4. Robotic Process Automation (RPA)

RPA emerges as a crucial trend for 2023. It involves utilizing software robots to automate repetitive tasks and processes.

RPA is essential for maximizing efficiency and minimizing costs when used in outsourcing. Automating rule-based processes enables employees to focus on more strategic tasks. In addition, this method enhances precision and minimizes mistakes made by humans.

Using outsourcing can offer significant benefits to businesses.

Some applications of RPA in outsourcing include the following:

  • Automation of data entry 
  • Invoice processing 
  • Expense management 

By using the capabilities of RPA, businesses can improve their operations and gain a competitive edge.

5. Green Outsourcing for Environmental Responsibility

Green outsourcing has become more prevalent because of the growth of sustainable business practices. Businesses can prioritize environmental responsibility by choosing service providers who commit to sustainability. It includes working with companies that adopt eco-friendly practices, such as the following:

  • Waste reduction strategies
  • Energy-efficient operations 
  • Carbon footprint tracking

Businesses might also consider outsourcing services that provide eco-friendly solutions.

  • Virtual meetings 
  • Renewable energy-powered data center
  • Cloud-based document management

Companies can do the following by supporting green outsourcing projects:

  • Align with global sustainability goals
  • Reduce their ecological impact 
  • Enhance their brand reputation 

Businesses can contribute to a greener future while achieving operational and financial goals.

6. Virtual Reality (VR) and Augmented Reality (AR) in Outsourcing

Virtual Reality (VR) and Augmented Reality (AR) are crucial in outsourcing. These immersive technologies are changing the outsourcing environment by improving training and cooperation. Employees from various locations can communicate and collaborate in real-time in virtual settings. It improves remote collaboration and reduces travel expenses.

With these technologies, employees can learn new skills and information through training. Businesses use VR and AR across a variety of sectors, including:

  • Manufacturing

Outsourcing services for small businesses in 2023 can use VR and AR to do the following: 

  • Train remote teams
  • Conduct virtual meetings
  • Simulate product prototypes

7. Cybersecurity Outsourcing: Protecting Data and Mitigating Risks

The most essential component of outsourcing agreements is cybersecurity. Businesses must outsource cybersecurity due to its growing relevance.

Businesses can successfully safeguard their data and reduce risks. Cybersecurity providers have the expertise to do the following:

  • Identify vulnerabilities 
  • Implement robust security measures
  • Respond swiftly to emerging threats

Outsourcing cybersecurity services helps businesses keep up with evolving cyber threats. Companies can protect sensitive information and ensure operational continuity amidst increasing cyber risks.

8. Data Analytics Outsourcing

A key element in boosting business success is data analytics. Data analytics impacts outsourcing due to its insightful data that helps businesses strategize.

Businesses can use the talents of specialized professionals to benefit from their expertise. It facilitates identifying trends and patterns in vast data sets. Companies can make data-driven decisions, seize opportunities, and pinpoint areas for development.

Companies can improve customer experiences and streamline marketing campaigns by adopting data analytics. It leads to making wise decisions that propel innovation and long-term success.

9. Ethical Outsourcing for Fair Labor Standards and Social Responsibility

Responsible corporate practices and ethical outsourcing take center stage. Companies must prioritize social responsibility and fair labor standards when choosing their providers. Ethical sourcing guarantees that everyone in the supply chain has a safe workplace.

Businesses can impact society and establish a solid brand reputation. The benefits of ethical outsourcing are the following:

  • Increased customer loyalty
  • Improved worker satisfaction
  • Reduced reputational risks

When choosing moral outsourcing partners, businesses should exercise careful due diligence. It guarantees that potential partners abide by environmental and labor standards. Collaborating with organizations with a history of advancing ethical business practices and social responsibility is also beneficial.

Businesses practicing ethical outsourcing can positively impact local and global communities.

10. Leveraging the Gig Economy and Freelance Outsourcing

Businesses can benefit from using the gig economy and freelance outsourcing. Companies can have access to specialized expertise on a project-by-project basis. 

Businesses can upscale their staff in line with project requirements with freelance outsourcing. It guarantees flexibility and cost-effectiveness. Freelancers can offer expertise, allowing companies to adapt to changing market conditions. 

Businesses should do the following:

  • Provide precise requirements for the project
  • Thoroughly screen freelancers
  • Establish effective communication channels

Companies can stay ahead of the curve by embracing the gig economy and freelancing. They can complete projects while being flexible and cost-effective.

Wrapping It Up…

Businesses must stay ahead of outsourcing trends if they want to thrive. Companies can benefit from specialized knowledge and affordable resources to boost operational effectiveness. The outsourcing industry helps companies concentrate on their critical projects. This strategic approach enables more adaptability, scalability, and productivity.

Additionally, outsourcing makes companies flexible to changing trends and technologies. It allows them to access recent developments without making significant initial investments. Outsourcing enables firms to streamline operations, drive innovation, and boost profitability for sustainable growth.

Businesses should adopt new trends in outsourcing to maintain an edge. Companies can improve operations, boost efficiency, and accomplish operational and financial goals.

Supercharge Your Business Success With Magellan Solutions 

Grab the chance to stay ahead of the competition. Magellan Solutions is your key to maximizing the benefits of outsourcing services. Our extensive selection of outsourcing services for small businesses in 2023 can fulfill your needs.

Our expertise and experience in outsourcing make us an ideal partner for your business. Work with Magellan Solutions to streamline your business and deliver excellent results. 

For two decades, we have been a top-tier provider of call center services . Additionally, we are an ISO-certified and HIPAA-compliant company offering an extensive range of high-quality outsourcing services. Reach out and discuss how we can help you achieve your business objectives.

Contact us and start your journey toward business growth and success. Optimize your operations like never before.

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Outsourcing Projects from the USA to India

Outsourcing services from usa to india.

Last Updated: 1 Jan 2024

Have you ever wondered why several American companies seem to head the Indian side when they need to outsource a project? Several businesses from the US, the UK, Canada, Australia, and South Africa are turning to India when they need external project support to leverage a mixture of skill and cost-effectiveness that appear hard to match elsewhere. But what’s the secret behind this strategic move?

The rise of India as a preferred outsourcing destination is no accident. It’s proof of the country’s ability to deliver exceptional work quality.

What is Outsourcing?

Outsourcing refers to delegating specific business functions, tasks, or processes to external service providers rather than handling them internally. Most people utilize this approach for tasks considered non-essential or peripheral to the core business operations.

For instance, outsourcing may occur when a company chooses to have an entire mobile app development project, or just segments, completed by an external specialist firm.

Why Outsource?

Companies opt to outsource for various strategic reasons, and the global outsourcing market, valued at $92.5 billion, indicates its growing popularity. Some of the primary motivations for companies to outsource include:

  • Cost Efficiency : Outsourcing allows companies to cut expenses associated with hiring, infrastructure, and training by utilizing the specialized services of external providers who often operate at a lower cost.
  • Scalability : It allows companies to swiftly adjust their workforce size and operations in response to fluctuating project needs, thus offering remarkable scalability.
  • Accelerated Time-to-Market : Firms that outsource, particularly to countries like India, benefit from quicker project completion times, which speeds up the product’s entry into the market. Outsourcing can also significantly reduce the hiring time by 40-50%, contributing to a quicker launch.
  • Technological Advancement : Outsourcing is a preferred strategy when companies seek to implement cutting-edge technologies like cloud computing and big data analytics without the significant investment required for training an existing in-house team.
  • Business Agility : The practice enhances a company’s agility, enabling it to respond with more flexibility to evolving market conditions and business needs.

Models of Outsourcing

We can divide outsourcing into several models based on the location of the third-party service provider: onshore, nearshore, and offshore. Here’s an explanation of each type:

  • Onshoring : This model involves delegating business activities to a third party in the same country of operation. Onshoring offers the advantage of minimal cultural and communication barriers, but it typically comes with higher costs and a more limited talent pool compared to other forms of outsourcing.
  • Nearshoring : This Nearshoring approach refers to outsourcing work to service providers in geographically close countries, often within the same or similar time zones. Nearshoring strikes a balance by reducing cultural and communication challenges while often offering cost savings compared to onshoring, though it may still be more expensive than offshoring.
  • Offshoring : Offshoring is when a company subcontracts processes to a distant country. This can involve setting up a subsidiary in that country or partnering with a local third-party provider. The main benefits include significant cost savings and access to a broader talent pool. In the IT industry, this practice is widespread due to the scarcity of IT professionals domestically. Many US companies outsource jobs overseas, with statistics indicating that about 300,000 jobs are sent abroad each year, especially as industries face challenges in filling specialized roles domestically.

Why is India such a hot spot for US clients looking to outsource?

Why does the USA look towards India? For starters, the value proposition is incredibly compelling. Regarding software development and IT services, India has created a reputation as a hub of innovation and expertise. American companies, in pursuit of excellence and efficiency, find a partner or co-founder in India that aligns with their strategic goals while offering economic advantages that are hard to overlook. Here are the advantages of outsourcing to India .

Cost-Effective Development :

For most companies, the goal is to create top-notch applications without breaking the bank. Hiring developers in countries like the US or Canada is costly. But in India, thanks to the favorable currency exchange rates and economic landscape, you can access the same talent level for a fraction of the price.

Deep Reservoir of Talent :

India is like Silicon Valley for software development outsourcing. Outsourcing to India allows American firms to tap into a reservoir of seasoned expertise, particularly in software development. Indian developers are not just coders; they’re skillful at managing the entire lifecycle of a project with a level of professionalism in both management and design that complements their technical services.

India is home to some of the world’s most competent and tech-savvy web developers . This massive experience and expertise means that India’s workforce is ready to deliver with precision and skill when it comes to intricate software needs.

Effortless Communication that Clicks :

Communicating with a software development company in India is straightforward for clients in the USA. Indian developers use multiple communication tools such as Skype, Slack, and others, ensuring that discussions flow seamlessly. This clarity and ease of interaction trim down misunderstandings and turbo-charge project efficiency or productivity. The client enjoys enhanced returns on investment.

Support Around the Clock :

An application that runs smoothly and keeps users happy requires regular updates and maintenance. Recognizing this need, numerous Indian outsourcing companies provide comprehensive after-sales support and ongoing maintenance services.

Quality that Stands Out :

By choosing to outsource to Indian developers, American software development companies gain access to a workforce that excels in coding, project management, and design. Indian professionals bring their A-game to every aspect of development, ensuring that the services provided are of the highest quality, even in the age of remote working.

Flexibility in Operations :

Many wonder if Indian companies can align with their preferred time zones. Indian firms are known for their adaptability, often adjusting their work hours to sync with the time zones of their international clients.

Finding a company that blends well with your time zone is vital, as it’s not just about the convenience of overlapping hours but also ensuring that this flexibility doesn’t come at the expense of quality. The right Indian partner will offer the adaptability you need and a commitment to delivering top-notch work.

Time-Zone Advantage :

The substantial time zone difference — often around 12 hours — between India and the US can be a strategic advantage for American companies. With a team in India, work can continue even after the US-based office has closed for the day.

This around-the-clock workflow can dramatically reduce project turnaround times and enhance productivity. Additionally, it provides a competitive edge, as American companies can accelerate their project timelines and potentially bring products and services to market faster.

Step-by-Step of Outsourcing from USA to India

Outsourcing work from the USA to India involves a systematic approach. Here is a step-by-step procedure to ensure a smooth and legally compliant outsourcing process, along with some considerations regarding costs:

Step 1: Understand Legal Framework and Trade Agreements

Before outsourcing, understand the US laws and international trade agreements concerning outsourcing. Consult the Department of Commerce or a legal expert specializing in international trade to grasp the legalities, such as permitted services for outsourcing, trade partnerships, and specific regulations that might affect your business plans. This step is critical to avoid legal drawbacks and ensure that the outsourcing process aligns with U.S. and Indian regulations.

Step 2: Identify Services or Products for Outsourcing

Determine the aspects of your business you wish to outsource. Not all services or products may be suitable for outsourcing. Analyze your business model to identify tasks that can be effectively completed abroad, such as customer support, back-office functions, IT support, or software development, without the need for physical presence.

Step 3: Conduct thorough Feasibility Studies and Market Research

Carry out a comprehensive study to understand the viability of outsourcing to India for your specific services or products. This research should include cost analysis, understanding the Indian market, identifying potential outsourcing hubs within India, and assessing the quality of work. A well-conducted study will inform you about potential cost savings and help identify the best regions in India for your outsourcing needs.

Step 4: Request and Collect Proposals

Advertise your outsourcing requirements or a Request for Proposal (RFP) to invite proposals from Indian companies. You can do this through business portals, outsourcing platforms, or contacting business chambers in India. Collecting multiple proposals allows you to compare and choose the best partner based on quality and cost-effectiveness.

Step 5: Screen and Shortlist Potential Partners

Review the received proposals carefully. If necessary, set up a selection committee to evaluate and shortlist the most promising companies. Invite the top 5 contenders to do their presentation. Consider company reputation, past work, technical expertise, and financial stability. Importantly, consider to check the b2b reviews sites like clutch and designrush.

Step 6: Visit Potential Partners in India

Once you have a shortlist, plan a site visit to India to inspect the facilities of the potential outsourcing partners. This will give you a better understanding of their operational capabilities and company culture. It’s also an opportunity to discuss and negotiate terms in person. You also get to understand local business practices and ensure the company meets your standards and requirements.

Step 7: Train Your Indian Counterparts or the Key Personnel

Once you select a service provider and finalize the contract, initiate a training program for the core team (team leaders or managers) that will handle your outsourced work. They should understand your company’s values, quality expectations, and business processes. They, in turn, can train the local staff, ensuring your standards are met. Effective training is essential for maintaining service quality and can involve on-site sessions, virtual training modules, or a combination of both.

Step 8: Establish Strong Communication Channels

Set up regular communication protocols with your Indian partner. The initial phases will require daily updates. Over time, as the partnership solidifies, you can adjust the frequency of these communications. Utilize tools such as video conferencing, email updates, project management software, and regular visits to ensure clarity and address issues promptly.

Regarding Cost:

The cost of outsourcing to India varies significantly depending on the nature of the work, the expertise required, the work volume, and the expected level of service. For instance, IT services like web development outsourcing cost anywhere from $15 to $50 per hour, while call center operations might be billed on a per-call or per-minute basis. Manufacturing can have a wide range due to material and labor costs. Always request detailed quotes and consider long-term cost-effectiveness, not just the initial expense.

Remember to factor in such costs like

  • Legal and consultancy fees for researching and ensuring compliance with outsourcing laws (due diligence).
  • The cost of issuing and advertising RFPs may involve marketing or agency fees.
  • Travel expenses for site inspections.
  • Training costs for developing materials and conducting sessions.
  • Ongoing communication and project management costs.

Tasks you can outsource to India

Outsourcing from the USA to India incorporates multiple jobs, leveraging India’s skilled workforce, competitive costs, and technological capabilities. Such may include:

Digital Marketing:

Digital marketing services are widely outsourced to India, utilizing local expertise in SEO, content marketing, social media management, and online advertising campaigns.

Software and Application Development:

India’s significant pool of software developers such as Aalpha Information Systems provides services in developing custom software solutions, mobile applications, and enterprise software.

Accounting Services:

Outsourcing accounting tasks, such as bookkeeping, tax preparation, and financial analysis, takes advantage of India’s trained financial professionals.

  • Textile and Manufacturing:
  • Clothes Manufacturing: India’s rich textile industry makes it a popular choice for clothing design, production, and export.
  • Footwear Manufacturing: Skilled labor and cost-effective materials contribute to India’s role as a prime location for producing various footwear types.

Data Management Services:

  • Data Entry and Data Mining : Businesses often outsource routine data entry tasks or require specialized data mining services to extract insights from large datasets.

Pharmaceutical Production:

India, being a hub for generic drug production, attracts outsourcing for manufacturing various pharmaceutical products.

Electronics Manufacturing:

  • Computer Components/Parts : Production and assembly of computer parts capitalize on India’s technological manufacturing capabilities.

Herbal and Natural Products:

  • Herbal Products Manufacturing : The country’s biodiversity and expertise in herbal remedies support the manufacturing of a wide range of natural products.

Office and Educational Supplies:

  • Stationery Production : India is a cost-effective location for producing paper-based stationery goods for global distribution.

Toy Industry:

  • Children’s Toys Production : Outsourcing to India for creating and manufacturing toys benefits from lower production costs and scalability.

Industrial and Chemical Sector:

  • Chemical Production : India’s industrial sector is equipped for the production of various chemicals, often at lower costs than in the USA.

Specialized Services:

  • Diamond Cutting and Polishing : The country’s historic expertise in diamond processing makes it a top destination for these services.
  • Hair Extensions Production : India is known for sourcing and crafting high-quality hair extensions and wigs for the global beauty market.
  • Hookah Production : With a tradition in hookah crafting, India produces a range of hookah-related products for export.

Businesses should ensure their outsourcing partners in India adhere to quality standards and ethical practices, especially in manufacturing sectors.

Tapping into India’s market means going for seasoned experts. This is why businesses across the globe, and especially in the USA, find themselves calling up developers from India – for quality and affordable work.

Looking for right team of experts to turn your idea into reality? Connect with offshore development company : Aalpha information systems.

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Muzammil K is the Marketing Manager at Aalpha Information Systems, where he leads marketing efforts to drive business growth. With a passion for marketing strategy and a commitment to results, he's dedicated to helping the company succeed in the ever-changing digital landscape.

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