outsourcing cost

IT Outsourcing Cost: Is It Really Cost-Effective?

Today, hundreds, if not thousands, of businesses globally outsource their software development projects for various reasons. In 2022, Gartner predicts that global IT outsourcing linked to remote work will reach $456 billion, a jump of 6.8% from 2020. The cost of developing a digital product with an outsourced team may appear to be much cheaper than with an in-house team. If you’re pondering why outsourcing is the most cost-effective alternative, continue reading to find the answers to some of your software outsourcing queries.

What Is IT Outsourcing?

IT outsourcing is a strategy that entails utilizing IT services offered by a third party to complete specific tasks and activities associated with an IT project. Recent data indicates that around 59% of businesses outsource their product engineering. When you wish to include other experts in a project, you do not need to hire an in-house employee.


Everything may be significantly more straightforward if you contract the essential services and engage a remote workforce. They can accomplish IT work on a single project while your staff concentrates on other duties or projects.


Why Would You Outsource Your IT?

Outsourcing has a plethora of advantages for businesses. To begin, it entails a greater depth of experience. Outsourcing partners may have a broader range of experience than our in-house staff in a particular area. Furthermore, your workforce may lack expertise in some highly specialized areas of information technology. Outsourcing acts as a magic wand in this scenario since you can locate and engage people with years of expertise in these industries.


Another benefit of outsourcing is the ability to change the size of your workforce at will. This means that you may recruit outsourced labor for seasonal or cyclical activities and work without hiring full-time in-house staff. The final, but certainly not least, the benefit of IT outsourcing is lower IT service costs. Numerous businesses outsource their projects to companies situated in lower-cost nations that offer much cheaper IT services.

Costs of IT Outsourcing

Typically, IT outsourcing partners bill on an hourly basis. It might be anything from $20 and $40 per hour for specific off-shore software development organizations. Western markets for engineers may become even more expensive, with hourly rates of up to $50 or more.

Before discussing pricing, there are two fundamental models of IT outsourcing to consider:

Fully Outsourced IT

Your business does not have an in-house IT department, or your workforce is already overworked at a certain period, and you do not want them to burn out. In this situation, the MSP (Managed Service Provider) is responsible for troubleshooting, security management, backups, and software upgrades, among other services. The MSP may keep and maintain servers in an off-site data center. The MSP or outsourcing organization should be viewed as a strategic solutions provider.


Now consider the following scenario: you own a healthcare firm and wish to develop a telemedicine application but do not have any developers on staff. You don’t see the use in establishing new jobs just for the length of the project, or perhaps you have an in-house team capable of developing an Android app but not an iOS version. As a result, you can outsource your project (or a portion of it) to a third party.

Read here: Offshore Software Development Rate Trends in 2021 – A Guide

IT Co-Management


The firm currently has an in-house IT staff but requires support. This may involve outsourcing typical computer system tasks, including upgrades, backups, threat detection, and even help desk support to free up internal resources. Alternatively, the core workforce is in place to manage day-to-day operations, but specialized talent is unavailable in-house.


Assume you wish to develop an enterprise application for managing manufacturing processes. What if your team can construct this app but lacks an iOS developer? It makes no sense to recruit a new developer when the developer is only required for a short project; thus, outsourcing is the best solution.

You can approach an IT Outsourcing Firm and hire a developer who will remain employed by the software company, but you will only be charged for the hours worked on your assignment.

When Is IT Outsourcing Appropriate for Your Business?

Inadequate Technical Knowledge or Adaptability

IT Outsourcing is ideal if you lack the technical expertise or the local talent pool is insufficient. Occasionally, projects demand specialized skill sets that may be difficult to locate on-site if your workforce has not been adequately educated.

Micromanagement Is Not Beneficial to Business

IT outsourcing is an excellent technique to prevent what is referred to as micromanagement. Frequently, project managers are tasked with managing trivial aspects while disregarding the critical ones. This is not only inconvenient but also exhausting and inefficient. As an executive responsible for the work, you can provide more excellent value to higher-level jobs. It will enable you to concentrate on business-related activities such as marketing, fundraising, and sales.

If you opt to outsource your IT, specialists from the other firm will handle all of your IT choices. In this manner, you can grow the firm while getting a competitive edge.

If you opt to outsource your IT, specialists from the other firm will handle all of your IT choices. In this manner, you can grow the firm while getting a competitive edge.

When Need to Save Cost & Time

Outsourcing software development services rather than assigning the work to an in-house team will result in considerable cost savings. In this approach, you don’t have to spend money on salaries, incentives, benefits, and other perks to keep your staff satisfied.

Technology businesses specializing in solutions providers and IT outsourcing are constantly on the lookout for new technologies that might help you save money and provide company value that your rivals will realize years later.

To Be Innovative

Working with a skilled software development team guarantees that your organization is consistently innovative. IT outsourcing firms must remain competitive in the market, which is why they are constantly looking for new and more effective solutions to address problems. They have a more extensive knowledge tank due to the numerous projects on which they have worked. The ideal outsourcing supplier will constantly be up to speed on the newest solutions and technology, ensuring that you stay competitive.



IT outsourcing is a prevalent method to information technology that entails contracting an external team to develop a complete product from the start or just a few of its elements. Numerous businesses worldwide are effectively utilizing it and have already seen excellent benefits.If you are looking for an experienced IT outsourcing partner to cut-short your IT budget while improving business performance, contact ZiniosEdge Software. Our team is ready 24/7 to support you.

Scroll to Top
This website uses cookies to ensure you get the best experience on our website. Learn more