Why does IT outsourcing save your time and money?
Sep 01, 2022
IT outsourcing is rapidly developing. According to Statista analytics, the volume of the global IT outsourcing market reached $360 billion in 2021, which is 13% more than in 2020. It is difficult not to note the significance of digitalization for a variety of industries. The COVID-19 pandemic has reinforced the importance of trends based on a strong technological component. Often IT outsourcing solves several problems, one of which is providing a team for project realization.
Alexander Korotaev, the Founder of Nyoka, shared information about what customers can expect from outsourcing development teams and how the process of working on projects goes.
Alexander, what does Nyoka do? What is the peculiarity of the company’s activities?
There are product-based companies that create their own product and try to bring it to the market, and then support and develop it. And there are service-based companies, like Nyoka, that serve the interests of these companies.
Service-based companies generally have two types of services. Firstly, a turnkey project development service: when there are the terms of reference (TOR) or general tasks. In this case, we entirely develop the project. At the same time, our team remains an executor and an expert, which helps to achieve the goals of the company, which is the main beneficiary.
And the second type of service is what we are talking about now. There is a more eloquent definition — staff augmentation. At the moment we live in a post-industrial era, cyberpunk is already rushing towards us at full speed. It becomes obvious that augmentations can be of different types. And, as it turned out, you can also augment developers in your teams. It is a separate service, and it lies in providing the best specialists according to the requirements of the client. Experts are integrated into the processes of work on the project, and there they will fulfill the goals set by the client company.
The customer visually sees the result of the work in the form of a finished product
Why are companies choosing to outsource services more often now, rather than hire employees? What are the benefits of IT outsourcing?
The world is gradually moving away where possible from the traditional model, where the company has staff. To hire employees, you need to provide them with a working equipped place (if the work is in the office), medical insurance, holiday and vacation pay, compensation, etc. Outsourcing saves the company’s financial resources, as the customer pays only for a specific result and does not allocate the budget for additional costs. If we are talking about IT-outsourcing, then it implies the involvement of experts who will be able to realize the project, taking responsibility for the timing and results. Thus, the customer visually sees the result of the work in the form of a finished product (website, mobile application, CRM optimization, crypto wallet, etc.). Furthermore, the customer is protected by a cooperation agreement, which is concluded at the beginning of work.
The range of IT outsourcing services is growing rapidly and new companies are entering the market. What are the features of your approach and what distinguishes you from other companies?
I try to bring an expert approach to the activities of our company: we do not simply provide a team or a developer to complete tasks. It is very difficult to work in this area if you are not an expert and do not share your knowledge with others. So, first of all, we find out the customer’s problem and give several detailed solutions based on many years of experience of developers and specialists.
In our understanding, staff augmentation and consulting are strongly connected with each other. Large well-known consulting companies, such as Ernst & Young, KPMG, PwC, Deloitte, provide similar services, only for them this service is just the tip of the iceberg of their activities.
For us, the main goal is to become such a company on the market that people come to for expertise and specialists, and not just for a service. Nyoka’s task is to bring its experience and help improve those processes that the client already has.
If the customer does not understand the technical side of things, but comes only with an idea, then how can the team help realize the project?
That’s a good question. Clients often come not only with an idea, but also with projects that another team started to do, and for some reasons this team refused further realization. In both cases, we collect detailed information about the project. After that, we hold a consultation with the client, where we find out the “bottlenecks” of the project, and then we offer suitable solutions. Very often, a customer comes with a minimum set of knowledge or an understanding of how technologies work, for example, blockchain or machine learning. We see where there is not enough expertise, and we give a detailed answer with examples from our cases. This helps the customer better understand his product.
We are supporters of a lean approach. When a client comes with a product that was made by another team, we try to reuse the existing code as much as possible in order to spend as few of the client’s resources as possible.
Iterations last from one to two weeks, which allows the client to see the real progress of the project.
How does the team communicate with the client? How is control carried out?
We try to make it as comfortable as possible for the client to work with us. Using flexible approaches, we minimize the risks for the client so that the product is implemented just in time. The team is always in touch, and the client has the opportunity to communicate not only with the project manager, but also with the developers. Due to short iterations it is possible to track the result of the product every week. These are not some phantom tasks that are impossible to see and feel. Before the next iteration, the client is invited to a meeting with the team, where he or she can test the tasks of the previous iteration. As a rule, iterations last from one to two weeks, which allows the client to see the real progress of the project.
Is everything going perfect all the time? How do you deal with “bottlenecks” in a project?
We are all human and we all make mistakes. The most important thing is to be able to admit your mistakes and find ways to correct them. Sometimes it happens that something goes wrong due to our fault. We do not try to hide it, but immediately inform the customer that we have a technical debt, and suggest ways of solving it. If this does not affect the process, then we close the technical debt in the next iteration, but if it does, then the iteration is extended,and the product release time increases respectively. The crucial thing is that the customer knows this. If such a situation arises, we immediately warn the client and offer solutions.
The most essential criterion for the customer can be characterized as “time is money”.
What advice can you give to customers when choosing an outsourcing company? Are there any selection criteria?
Many people may say that you need to look at the reputation of the company, the number of completed projects, the range of services, reliability, etc. Certainly, this is of great importance. However, the most essential criterion for the customer can be characterized as “time is money”.
Before the customer looks for a potential executor, they can write the clear terms of reference with some scope of work. Thus, the outsourcing team will already be able to understand what the goal of the project is, what the result should look like, and whether it can take responsibility for fulfilling this goal. During the first meeting you should pay attention to the engagement of the representatives of the outsourcing company, which is expressed in the number of questions, in the initial preparation for the call, and in the interest in the project.
It is also necessary to understand what budget the customer is ready to allocate for the realization of the project. It should be noted that if the client expects to receive high quality services, then these services will cost more than the average. In this case, the customer can pay attention to the mobility of the outsourcing team. For example, if the team does not fit into the estimated budget with the initial set of objectives, then it can offer several options for resolving the issue and agree on them with the customer, thus demonstrating its expertise and ability to find different variants.
CMO (Chief Marketing Officer)
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