LTS QA

 

The benefits of IT Outsourcing are undoubtedly one of the most juicy reasons in any outsourcing decision. But what are the deciding factors that can drive one business owner into implementing IT Outsourcing? Let’s find out more about the Top 5 IT Outsourcing benefits that you need to know here.

5 Juicy Benefits of IT Outsourcing

1. Lower cost for your project

Unquestionably, the first advantage of IT outsourcing is cost reduction. As despite the amount of money and time that you need to spend on one project/application varies, it will definitely cost you quite a lot to put a fully functioning and bug-free application online.

Under the circumstance of the global economic market, many executives now prioritize their budgets, meaning that they would want to look for the most cost-effective solutions. Henceforth, if you put an in-house team, which can cost millions of dollars to build and maintain, and an outsourced team, which is 30-50% less costly on the table, the executives are leaning towards IT Outsourcing.

Look at this example, and you’ll understand what we’re trying to illustrate here. According to an UK talent report, it costs you $55,000/year to hire an average Java developer in the United Kingdom, and the number even reaches $90,000/year for an experienced one.

 

Benefits of IT outsourcing – Cost reduction

 

In contrast, the equivalent job in the Vietnam IT market would only cost you approximately $10,000. Looking at these numbers, you can see the huge gap between the talents from two different places. However, if you look closer into how the Java developers in Vietnam code and communicate, you will see no difference, at least in terms of professional knowledge.

So, what we’re trying to say here is that you will be able to hire a fully capable Java developer in Vietnam at a much lower price. The saved amount of money can be used in other investments within your projects.

Besides the lower salary, your business can save a fortune on the recruitment agency fee and management costs. No employer branding is needed, no costly marketing campaigns and no uncalled-for managing expenses.

Read more: How to estimate IT Outsourcing Cost

2. Higher chance to hire in-demand tech talents

What are the deciding factors for a high-profile software developer when they choose between companies?

According to a survey from TopCV Vietnam, 57,9% of the participants stated that they are concerned with how interesting it is to work in a company, while 48,7% emphasize the importance of the company’s tech stack. Both of these features can be found in big enterprises or IT-majored companies. But how about the small-to-mid-size companies that have no experience in digitalization and technologies? How are they gonna find the most suitable IT talents for their tech projects if they have no reputation?

These questions can be answered with IT Outsourcing advantages. With IT Outsourcing, you don’t have to worry about IT recruitment, as it is all taken care of by the vendors. These vendors have their tactics to attract, recruit, manage and retain tech talents. With them doing this for your business, you can save a lot of time while still having great access to their IT talent pool.

3. Quick time-to-market

Customers’ unquenchable desire for the most up-to-date features, corporate growth targets, shorter life cycles, and senior management pressure all contribute to speed-to-market. Many consumers demand a continuous set of upgraded features on an annual cadence due to the amazing velocity of innovation in mobile handset devices.

 

Benefits of IT Outsourcing – Quick time to market

 

When companies fail to reach their time to market targets, they lose money as well. A product that is six months late to market makes 33 percent less profit over five years, according to classic research by McKinsey & Co; if it is released on time but is 50 percent over budget, profits are only decreased by roughly 4%.

In the B2C software business, technology companies frequently employ and prosper with the concept of a Minimum Viable Product (MVP). Although this method entails some risk in terms of client satisfaction, it also allows the team to move rapidly and shorten the time to market by releasing a version with only the most essential functionality.

But how to you obtain quick time-to-market if you are still tangled with hiring and training talents? The answer is IT Outsourcing, as this approach helps you hire very quickly, and these hires barely need any training in the industry and technologies.

4. Flexibility & agility

Businesses grow and shrink at different times. It is widely recognized that these companies must be able to respond to these developments by adopting a flexible and scalable approach to their extended operations as well as their main business. As a result, it’s critical that your IT outsourcing partner can match and react to these changes in order to meet demand.

 

Benefits of IT Outsourcing – Flexibility

 

Businesses can adjust to shifting priorities and requirements because to this flexibility. Here are some reasons why IT outsourcing is critical to your business:

• • The outsourcing team can adapt to your company’s goals.
  • The outsourcing team can change in internal operations and advancements.
  • You can make adjustments and recommendations to shift focus, especially in agile methodology.
  • You can flexibly scale up and down your outsourcing personnel but it’s not that easy to an internal IT team.

5. More focus on your core business

Many activities in the workplace can serve as a distraction from the primary goal of the company. When a result, as the burden grows, the essential activities of the business deteriorate, which is bad for the company and hinders its growth.

Businesses can benefit from IT outsourcing by delegating some tasks to third parties, eliminating opportunity costs of implementing non-core businesses, and allowing them to focus on their core competencies. Third parties play an important role here by obtaining the tasks and manage everything. When a company’s burden is excessive, outsourcing can be tremendously beneficial.

 

Benefits of IT Outsourcing – Focus on core business

 

It’s been proven time and time again that focusing your time and attention on what you’re good at makes a lot more sense. If you run an education establishment, you should put your clients and teaching as your priority. But in order to elevate your service, you decide to develop an app that helps to learn. Instead of hiring a full-time and long-term team to work on the app, you should always outsource and update on the regular basis.

You will have more time to focus on the key things like inspiring employees and making profit by collaborating with an organization to take the lead and deliver your projects and products.

Reap the IT Outsourcing benefits with Lotus QA now

Lotus QA has the expertise and experience with IT services in many domains such as retail, food and beverage, healthcare, etc., making us one trustworthy and professional service provider for businesses wanting to implement IT outsourcing. When working with us, you will get access to many benefits of IT outsourcing, including:

• High Security: LQA not only follows stringent procedures of ISO 27000:01 for optimal security and international standardized process but also flexibly adapts to clients’ requirements
• Quality Human Resource: we ensure staff competency through strict rounds of interviews, on-job orientations, continuous learning & development for the most suitable QA staff.
• Flexibility: We provide different working models to allow clients to choose or change the plan at any time.

Contact us for more support:

• Website: https://www.lotus-qa.com/
• Tel: (+84) 24-6660-7474
• Fanpage: https://www.facebook.com/LotusQualityAssurance

The matter of how to ensure quality in software development outsourcing is one of the most important features that project managers need to address. As you work with an external party in software development outsourcing, you lose complete control over your project. In this case, several measures need to be taken into consideration to ensure the quality of the said project.

From a service provider’s perspective, Lotus Group has its own way of ensuring quality, which you might find useful in your project.

1. Have control over our human resources

Software development outsourcing, or IT outsourcing in general, is an emerging service as the world is shifting towards digital transformation. In this new field, the most famous service providers are those from the less-developed countries which have lower labor costs. 

However, soon their sources of IT workers become limited, as it is getting harder and harder to hire competent tech staff. To deal with this universal problem, Lotus Group plans to change our stance in the hiring markets. Instead of recruitment only, we want to be more proactive in providing IT talents to our clients. To do this, we have founded Lotus Academy – a training institution specializing in backend and frontend technologies for freshers/newbies in the IT industry. 

With the foundation of Lotus Academy, Lotus now can take advantage of the resourceful talent pool, hence providing the most competent and reasonably-priced tech staff. 

Technology training is in high demand, and the number of students in Lotus Academy will only rise in the future. And with the high number of students rolling in, Lotus can train them and let them take part in our projects. With careful observation and guidance from our experienced trainers, your project will be well-tended with care.

Besides the source from Lotus Academy, Lotus Group also has our connection with many other universities and colleges in Vietnam. These training institutions have a thorough training course with actual projects for the students to practice, which can be of great benefit for you.

2. Implement manual and automation test early

Technically speaking, the quality of one product/project relies on how you implement the testing process. If you follow the method of waterfall or even V-model, you leave the testing till the last minute, making the time-to-market longer than ever.

Instead of developing and testing at different times, you should combine regular testing and structured QA strategy in your software development life cycle to make sure that everything will be tested and fixed quickly.

In your testing process, manual testing and automation testing should be combined to catch the bugs that thinner testing strategies may have missed.

According to a study by Capers Jones, 85% of the bugs are made during the design and build stages of an SDLC, and some are even there before the first line of code is written.

By implementing manual and automation test early, you can work on how to fix these bugs before they can make their way to your releases, which will in turn ensure software quality and save you a lot of time.

3. Have clear communication methods and channels 

The first and most important question that every manager has about remote work communication best practices is about management. Management used to entail task allocation, monitoring, and administration, among other things. Managers can easily track cues to indicate communication issues and get involved in fixing them with a co-located team. A remote team, on the other hand, works off the screen, posing difficulties for managers.

Managers used to have physical and emotional contact with their employees, but now have little to no direct interaction with them. Managers are required to implement some of the tools and approaches to achieve remote work communication best practices from a place of easy-to-manage work platforms such as Skype or Excel spreadsheets.

For seamless communication, you have to set out clear communication methods and channels. How should reports be handled, how often should you call in for a meeting? These are the kinds of questions that you need to answer when you want to tackle the communication aspects of a software outsourcing project.

4. Use agile methodology (incremental and iterative)

Agile methodology has always been praised as one of the most effective software development methods there are in the field. Indeed, in agile project management, everything moves at a high speed, and testing is an integrated part of the project execution phase. 

This means that instead of processing the quality of different features separately, agile works with the overall quality of the final product. 

In Agile methodology, you will always be involved in the development process and can easily make changes if you wish to. To put in other words, Agile allows a greater level of flexibility which many businesses now want for their projects.

In addition, agile is an iterative process, and the team will inevitably have to learn to grow and improve their work overtime. And this can be of great advantage for you to ensure the highest quality on your project.

All of the above is what Lotus Group is applying to ensure a high-quality project for our clients. Besides all these, we also have other methods for different kinds of service. If you want to hear more about this, contact us:

• Website: https://www.lotus-qa.com/
• Tel: (+84) 24-6660-7474
• Fanpage: https://www.facebook.com/LotusQualityAssurance

Lotus QAは、2021年のあらゆる課題や困難を見事に撃退した数少ない企業の1つです。実際、2021年はLotusの多くの変化と成果を目の当たりにし、パンデミックの中での適応力と柔軟性を証明することができました。それでは、2021年にLotusがどのように発展したかを見ていきましょう。

1. 私たちが乗り越えたもの

COVID-19のパンデミックとの戦いはまだ勝利したとは言えませんが、ワクチンの目処が立ったことで、少なくともトンネルの終わりにかすかな光が見えています。

この間、LotusはハノイでCOVID-19の2度目の暴発に見舞われ、ほとんどの社員が自宅待機を余儀なくされるなど、さまざまな困難にぶつかった。そんな中でも、私たちスタッフは、ひとつひとつの納品物を最高の品質でお届けするために、絶え間なく努力を続けてきました。

 

2. 私たちが達成したこと

2021年、新たなビジョンと戦略的プラン、そしてスタッフの献身的な努力により、Lotusは不死鳥のように立ち上がり、成功を収めたと主張します。

売上は160万ドルに達し、2020年の2倍になりました。また、日本、アメリカ、中国、韓国など世界各国の42社のクライアントと172のプロジェクトを行いました。これは、2020年の実績と比較すると大きな数字です。

私たちの抱える問題やアチーブメント達成の詳細はこちら。

 

 

Lotus QAについて

Lotus QAは、小売、食品および飲料、ヘルスケアなどの多くのドメインでITサービスに関する専門知識と経験を持っており、オフショア開発を実施したい企業にとって信頼できるプロフェッショナルなサービスプロバイダーです。

• 厳格なセキュリティ：Lotus QAは、ISO 27000:01の厳格な手順に従って、最適なセキュリティと国際標準化されたプロセスを実現するだけでなく、お客様の要件に柔軟に適応します。
• 質の高い人材：Lotus QAのスタッフは入社の時からの厳格な面接、そして仕事上のオリエンテーション、継続的な学習と自己開発を通じた能力の高い人材です。
• 柔軟性：お客様がいつでも計画を選択または変更できるように、さまざまな作業モデルを提供しています。

弊社のサービスに関する詳細についてはお気軽にご連絡ください！

• Website: https://jp.lotus-qa.com/
• Tel: (+84) 24-6660-7474
• Fanpage: https://www.facebook.com/LotusQualityAssurance

 

The Vietnamese digital economy will grow by 31% this year compared to the same period last year, reaching $21 billion.

This is stated in the e-Conomy SEA 2021 Report, which was released this week by Temasek, Google, and management consulting firm Bain & Company.

As a result, the Vietnamese internet economy could reach US$220 billion in Gross Merchandise Volume (GMV) by 2030, placing it second only to Indonesia.

This is encouraging in light of the shrinking online travel market. If current trends continue, Vietnam’s GMV is expected to reach $57 billion by 2025.

The Vietnamese digital economy

The report also stated that since COVID-19 was reintroduced in the first half of this year, the country has added 8 million digital consumers, with non-metro areas accounting for more than half of the total.

Notably, 99 percent of these new consumers expressed a desire to continue using online services after the pandemic, indicating a very high level of user adoption of digital services and products in our country.

Thirty percent of digital merchants believe that without digital platforms, they would not have survived the pandemic.

Digital financial services are also becoming critical enablers, with 98% of digital merchants now accepting digital payments and 72% using digital lending solutions. Many are also embracing digital tools to engage with their customers, with 72% planning to increase their use of digital marketing tools over the next five years.

Vietnam as an innovation hub

According to the report, Vietnam remains an appealing innovation hub as global capital continues to pour in.

Investments and deals reached a record high of $1.37 billion in the first half of 2021, surpassing full-year investments in recent years, fueled by investment interest in digital start-ups in the fields of e-commerce, fintech, healthtech, and edtech.

In terms of Southeast Asia, the report states that the region is on track to become a digital economy with a GMV of US$1 trillion by 2030.

More than 440 million internet users, including 350 million digital consumers in the region, are the primary drivers of this.

Southeast Asia has added 60 million new digital consumers since the outbreak began, with 20 million joining in the first half of this year.

Southeast Asian digital consumers have increased their spending on online services as a result of the COVID-19 pandemic.

As a result, Southeast Asia’s GMV is expected to reach $174 billion by the end of the year, rising to $360 billion by 2025, exceeding the previous estimate of $300 billion.

The year 2021 marked the tipping point for many technological advances that would shape our understanding and interaction with the world to come.

Let’s take a look back at some of the year’s most significant technological developments.

The Beginning of the Metaverse

The announcement of Metaverse on November 24th was a significant event in the ever-changing world of technology. This was followed by Mark Zuckerberg’s announcement in October that Facebook would change its name to ‘Meta’ as part of the company’s transition from a social media platform to a virtual reality platform.

Metaverse is a concept of a centralized virtual world in which people and businesses interact with one another via VR headsets, and this platform lacks the usual physical boundaries that today’s social media platforms have.

The Metaverse has the potential to shape how people interact with one another in the ever-expanding virtual world.

The Crypto-Boom and the Global Chip Scarcity

The year 2021 was the year of cryptocurrency, with the industry growing from USD 24 billion to USD 63 billion in a single year, and the trend is expected to continue.

However, this boom, combined with the massive surge in demand caused by the Covid-19 pandemic, resulted in the worst supply-chain issue in the computer industry’s history, affecting global computer buyers as well as every tech industry from chip manufacturers to car companies.

NFT stands for Non-fungible Token.

NFT is an Ethereum Blockchain function that allows a person to trade ownership of anything digital, such as images, drawings, music, and so on, with another person, but each NFT is unique, unlike currencies, which are fungible or identical.

NFTs have become a massive trend in digital art trading in a very short period of time, though the NFT market is still primarily a place where rich people, mostly for bragging rights, throw away their money to own something rather than NFTs being anything substantial.

Silicone made to order

The world’s largest technology companies have finally taken the step of designing their own custom SOCs for their own products.

Apple was the most successful in this venture; the second iteration of their custom silicon, known as the ‘M1 Pro’ and ‘M1 Max,’ set the standard for consumer-level computer efficiency and computational prowess, leaving other manufacturers in the dust.

Google, on the other hand, created their own mobile chip called ‘Tensor,’ which was used in their flagship mobile line-up and delivered impressive performance.

All of the other major phone manufacturers may enter the custom silicon game by 2022; Tesla has hinted at something similar in their upcoming phone release.

LG’s exit from the smartphone market

LG, a well-known electronics company, announced their retirement from the phone business in 2021, stating that they would focus more on home appliances and other electronic products.

To say the least, the company’s recent performance in the smartphone industry has been poor, with bad branding, questionable hardware and software choices, and a lack of reliability causing the company to fall significantly behind their competitors.

However, LG will always have a special place in the industry because of their constant pursuit of innovation, and they were the first to set trends for many of the smartphone features that are now ‘mainstream’ across the smartphone industry.

Let’s take a look at some of the first features introduced by LG to the market: capacitive touchscreen, dual-core processor, 1080p video recording, dual-rear camera, quad-core processor, double-tap to wake, mass-produced quad HD screen, dual-screen display, ultrawide camera, 18*9 display, triple rear camera, and so on. LG will be sorely missed.

Lotus QA is among the few companies that have successfully fought back all of the challenges and difficulties in 2021. In fact, the year of the Ox has witnessed many changes and achievements of Lotus, proving our adaptability and flexibility amidst the pandemic. Let’s take a look at how Lotus developed in 2021.

Changes in our regime

As some of you may know, Lotus started with Lotus QA (Lotus Quality Assurance) in 2016 and continued our journey of providing top-notch talents and services to the world. To do this, our BOD has expanded the service coverage with Lotus Technology Services in 2017 to bring more value and high-quality work to our customers. 

With Lotus TS, we specialize in providing data labeling, data annotation and software development outsourcing services. Another milestone in our development journey is the foundation of Lotus Japan office in October 2020, marking our official presence in the global IT Outsourcing market. Despite facing many difficulties amid the Covid-19 pandemic, Lotus Japan is a big success, as we got many new customers from this promising, yet very demanding market. 

Towards the end of 2021, with the help of partners and many devoting employees, Lotus stepped up our game with the establishment of Lotus Academy – a training hub for young and talented tech newbies.

With Lotus Academy as the newest member of Lotus Group, our BOD believe that we can enhance our talent pools, hence providing top talents to our clients from around the globe.

What we have overcome

While the fight against the COVID-19 pandemic is not yet won, with a vaccine in sight, there is at least a faint light at the end of the tunnel—along with the hope that another train isn’t heading our way.

2021 will be the year of transition. Barring any unexpected catastrophes, individuals, businesses, and society can start to look forward to shaping their futures rather than just grinding through the present. The next normal is going to be different. It will not mean going back to the conditions that prevailed in 2019. Indeed, just as the terms “prewar” and “postwar” are commonly used to describe the 20th century, generations to come will likely discuss the pre-COVID-19 and post-COVID-19 eras.

During this hard time, Lotus stumbled upon many difficulties as we were struck with the second outburst of Covid-19 in Hanoi, resulting in most of our employees having to work from home. Despite all that, our staff has worked nonstop to ensure the highest quality possible in each and every of our delivery.

What we have achieved

Vietnam has witnessed the most serious outbreak of Covid-19 since the beginning of it, and Lotus was somewhat affected by the outbreak. But that was just the story of 2020. In 2021, with new visions and a strategic plan, together with the dedication and devotion from our staff, Lotus group has risen like a phoenix and claimed our success.

To be more specific, our revenue reached $1.6M, doubling the number in 2020. Lotus has worked with 42 clients from all over the world, ranging from Japan, the US, China, Korea, etc. with 172 projects. This is a big number when compared with what we did in 2020. 

Also, Lotus was celebrated as the Top AI Data process service in the prestigious Sao Khue award. On the global scale, we got listed from Clutch, Manifest as top software testing and IT Outsourcing companies. These titles are concrete evidence of what we achieved in 2021.

In terms of internal PR, Lotus has organized many games, team-building activities to bond our employees together.

In terms of staff training, Lotus has founded Learning & Development department and later on, Lotus Academy, which in turn will help Lotus ensure a stable and high-quality source of candidates.

To conclude, the year of 2021 is another year of many difficulties and challenges. But Lotus, with hard work and righteous strategies, has thrived. As we’re getting closer to 2022, our BOD would want to thank you all for your support in 2021. We hope you a Happy New Year!

According to Statista, the IT outsourcing industry is growing at a compound annual growth rate (CAGR) of 8.93% and will be worth a market volume of $551,956.3 million by 2026.

The IT Outsourcing market in 2022 faces new challenges including competition for talent, tech layoffs, and the global economic recession. With that context, the needs of businesses when using IT outsourcing have also changed, they are looking for more than just a cost-reduction solution.

According to Deloitte’s Global Outsourcing Survey 2022, organizations are turning to outsource to fill human resources and technical gaps, drive value, and provide end-to-end solutions. This article will analyze and update the latest forms and trends of IT Outsourcing, and how businesses can get the most benefits when deciding to outsource their IT projects/ departments.

Let’s take a look at how the IT Outsourcing industry will be in the phase of 2022 – 2025 in this article.

Overview and Forecast for IT Outsourcing industry 2022 – 2025

1. Growth of the IT Outsourcing industry

As technology becomes more vital for an enterprise to obtain a competitive edge among many other companies, more and more businesses are implementing digital transformation, resulting in the fast growth of IT Outsourcing industry in general.

In 2021, the revenue in the segment IT Outsourcing is reported to reach $359,832 million, which is a huge number for such an economically challenging year. In general, the IT Outsourcing market is expected to register a CAGR of 4.5% during the forecast period (2021 – 2026).

 

Despite, or perhaps because of the COVID-19 pandemic, the percentage of the budget IT departments spend on outsourcing will continue to rise by about 8 – 9%, based on the previous number of 2019 and 2020. Any threats and challenges of such hard time caused by the pandemic, IT Outsourcing shows great potential as it can harness the trends of digitalization and help businesses in terms of business growth, customer experience and competitive disruption.

If you want to join the fast-growing IT Outsourcing market but don’t know where to start, check out our IT Outsourcing Ultimate Guide: Definition, Types & Models, And Trends To Look Out for in 2023 to have a winning outsourcing strategy.

2. Frequently outsourced functions

According to a study from Mordor Intelligence, it is suggested that Application Development and Maintenance have become the most frequently outsourced functions amidst the partial IT outsourcing trends.

For application development, which is the most frequently outsourced function, 37% of organizations that outsource this function are planning to increase the amount of work they outsource. Application development continues to take larger parts of the IT budget, and many IT organizations are looking to optimize internal staffing through the selective use of outside development firms.

Maintenance ranks the second most frequently outsourced IT functions, as many businesses now need the most updated technology and flawless operations on their application. As a result, maintenance comes in and brings about many benefits such as Bug Fixation, Capability Enhancement, Performance Improvement, Scalability and security.

 

3. Sectors to outsource to most

BFSI (Banking, financial services and insurance) is the sector that accounts for the largest market share of the IT Outsourcing industry.

As modern customers are now more demanding in how the services are delivered to them, businesses in the BFSI sector have come to technological applications for a more personalized and streamlined customer experience.

Moreover, the implementation of technology in customer experience not only provides top-notch customer service but also gives the businesses the tool to harness and mine the data from their customers, bringing about the great potential for business growth.

Other sectors that make the list is Healthcare, Shipping & Transportation, Retail & Manufacturing.

 

4. What countries to outsource the most

As the pandemic accelerated global businesses, companies are making every effort to implement digitalization into their operations. Among the developed countries, the US, which has a mature economy, is leading in the number of outsourced services in the world, with 68% of companies delegating their services.

 

Ranks second in this is the UK, with 48% of companies are outsourcing offshore with talent shortage as the main factor.

Since the cost to hire a competent IT worker in these developed countries is very high, the need to come to cheaper countries is higher, hence the majority of countries that outsource the most lie in the developed countries. Another country to make to list is Japan, with 43% of companies outsourcing their services.

 

5. Global IT outsourcing destinations

India and China are leading the outsourcing bandwagon, followed by Indonesia, Malaysia, Belarus, the Philippines and Vietnam due to their cheap labor and operating costs. Especially in Vietnam, IT Outsourcing in Vietnam has emerged with $11.0B in revenue (according to a report by the Vietnam Software and IT Services Association). Vietnam also ranked 9th in Tholon’s Top 50 Digital Nations. The total ICT export is reported to be $91.5B, bringing $3.5B of software export turnover. This number is predicted to grow more in 2022.

While these destinations will continue to grow sustainably, Eastern and Western Europe have emerged as credible outsourcing destinations in recent years. A few other Eastern European countries are fast-growing destinations for offshore IT solutions due to advanced technology and robust infrastructure.

Also read: Top 8 IT outsourcing countries

Upcoming trends of the IT Outsourcing market

1. Remote work continues

Although the pandemic is receding, there’s little sign of working practices returning to pre-COVID ‘normal.’ And while it’s here to stay, remote working might not continue in the same way.

In the UK, for example, 36% of employees did some work at home in 2020 – up 9% in 2019. In the US, where only 7% of employees could regularly work from home before the pandemic, 36% said they did some telework because of it.

 

 

It’s impossible to say definitively what the coming year will hold, but the steps organizations are taking give us an idea of what’s to come. Several high-profile organizations have enthusiastically embraced remote working, and like it so much they’re making it the default setting.

• US insurer Nationwide has announced plans to reduce its 20 offices to four
• In 2020, Shopify announced that it is a ‘digital by default company’ and that most of its staff will permanently work remotely
• Dropbox is becoming a virtual-first company, with remote work being the default
• LinkedIn will allow people to choose full-time remote work or a hybrid option

 

2. South-east Asia as the top destination for IT outsourcing

As most of the top destinations for IT Outsourcing in the world such as Indonesia, Malaysia, the Philippines and Vietnam are in Southeast Asia, this region will be the

To demonstrate just how attractive these markets are, the 2017 A.T. Kearney Global Services Location Index ranked the Philippines, Indonesia, and Vietnam in the top ten for outsourcing in the business environment, financial attractiveness, people skills, and availability of workforce.

 

3. Positions to be outsourced

Overall, software development will be of higher demand, with Back End developers, Front End developers, Full Stack Developers, Mobile Developers, QA Testers and UX/UI Developers being the most sought-after. However, the key technologies needed will be in Cloud computing, Blockchain, and Cybersecurity.

• Cloud computing: In 2018 alone, companies invested approximately $ 175.8 billion in cloud computing infrastructure and services worldwide, more and more jobs in Cloud technology will be in demand.
• Blockchain: This technology has been around for years, but it was Bitcoin that brought the idea to mainstream attention when this cryptocurrency became the first to use the blockchain as its underlying platform.
• Cybersecurity: Hacking, cyberattacks and data breaches are now commonplace in today’s digital world. In fact, The number of connected IoT devices has increased by 9%, reaching a total of 12.3 billion worldwide.

 

 

With the ever-changing market as of today, the IT Outsourcing industry has many to offer with an unprecedented growth rate and potential. As technology is the core of our enhancements, IT Outsourcing is sure to boom in the future. If you want to hear more about this industry and figure out how your business can harness the potential of tech through outsourcing, please contact Lotus QA for further information.

3. A shift from a single vendor to an ecosystem of third-party relationships.

Instead of accessing limited technology, and talent pool when working with only one vendor, stakeholders tend to cooperate with a slew of IT outsourcing providers to be less dependent on one vendor and better risk mitigation.

4. Outsourcing has been overshadowed by the prioritization of new technological advances.

Based on a recent McKinsey report on technology transformations, just 10 percent of respondents identified cost reduction as a priority. Meanwhile, 38% prioritize innovating technology to make it a competitive advantage.

The shift to prioritizing value over cost efficiencies from third-party services has accelerated the evolution toward a highly outsourced IT environment.

Explore tech trends with latest statistics to leverage the advancement in dynamic technology landscape.

Lotus QA has the expertise and experience with IT services in many domains such as retail, food and beverage, healthcare, etc., making us one trustworthy and professional service provider for businesses wanting to implement IT outsourcing. When working with us, you will get access to:

• High Security: LQA not only follows stringent procedures of ISO 27000:01 for optimal security and international standardized process but also flexibly adapts to clients’ requirements
• Quality Human Resource: we ensure staff competency through strict rounds of interviews, on-job orientations, and continuous learning & development for the most suitable QA staff.
• Flexibility: We provide different working models to allow clients to choose or change the plan at any time.

Contact us for more support with automation testing services:

• Website: https://www.lotus-qa.com/
• Tel: (+84) 24-6660-7474
• Fanpage: https://www.facebook.com/LotusQualityAssurance

When choosing the IT outsourcing vendor for your business, you are spoilt for the choices of thousands of IT service providers from all over the world. With each of the vendors claiming to be the best choice for you, there are many IT outsourcing vendor selection criteria that you have to put into consideration.

Let’s check out our article on How to choose the most suitable IT outsourcing vendor for your business.

1. Technology expertise & focused domains

For most of the time, the main reason for one business to resort to the help of a third party is the lack of technical knowledge and domain expertise. For example, an industrial manufacturing company wanting to implement digital transformation doesn’t have what it takes to build an ERP system, so they outsource the function to a renowned vendor who knows the technology and the industry. This helps save a lot of effort in building and maintaining an in-house tech team.

Concerning the technical matters, you should consider the technical expertise and the focused domains that you will work on.

Technology expertise

Technology expertise means the programming languages, the frameworks, tools, etc. that will be applied in your application. Not only that, but you will also need to identify the level of experience you want your employees to have.

For a non-tech company, identifying these matters is no easy job, but it can be easily done with the help of a technical consultant to give the most objective view of what you would need. Then, when you’ve already known the technical requirements, you can produce a job description featuring all the technical requirements and select the most suitable IT outsourcing vendor.

Focused domains

Besides the universal knowledge that every of your tech team needs to have, you should also aim for those IT vendors who understand your industry. With this being done, the outsourced team wouldn’t have to spend much time on the project requirements just to understand some terms in the field.

If they have the domain knowledge they claim to have, the time spent on getting to know the system will be shortened, hence saving your business a lot of resources and time.

2. Reference from clients, case studies, and testimonials

For the IT outsourcing industry, it is very common that some vendors are economical with the truth. They tend to paint the perfect picture of what technologies they can use, how well they can do with complicated projects, etc., making you the “easy target” for fraudulent acts.

To prevent this, you should take references from clients, actual case studies and testimonials. Of course, the vendors will always want to direct you to their website so that you will see what they want you to see. Even though it’s good to know what they can put on the table, but it is also a must for you to go to a review website to see the vendor’s real work.

For example, you can go to Clutch – a website that interviews real clients, collects data, and compares competitors. On this website, when a vendor wants to publish a review from their client, their client will have to log in and leave detailed information about the project, including the position that the client holds, the project, the ratings they want to give for different criteria namely cost, flexibility, etc.

Besides, you can also ask for the case studies of the IT outsourcing vendor for that one particular part you want to outsource. Ask for the details of the projects, what challenges and how they overcame them. With all of these, you can now grasp a sense of how they deal with potential problems and their solutions.

3. Reasonable hourly rate

According to a survey from Deloitte, recent years have witnessed a sharp increase in the number of organizations giving priority to cost reduction. With a clear vision and focus on the cost, it is vital that you consider the vendors that have a reasonable hourly rate.

With IT Outsourcing, many businesses have to choose between hiring a domestic vendor and a foreign vendor. While the domestic vendor can offer closer proximity, better managerial presence and better communication, the foreign one’s biggest advantage lies in the cost. Therefore, to optimize spending, it is advisable that you consider offshore/nearshore vendors. For example, you’re a business in the US, so you can consider vendors from India, Ukraine, and Vietnam.

Take a look at the average wage for IT workers in these countries to see how much you can save when choosing them:

Countries	Rates
Ukraine, Romania, Poland, Bulgaria, Hungary, Czech Republic, Slovakia, Belarus	$25-$50
Argentina, Brazil, Mexico, Colombia, Peru, Chile	$30-$50
South Africa, Morocco, Kenya, Nigeria, Egypt	$20-$40
India, China, Indonesia, Philippines, Vietnam, Pakistan, Malaysia, Bangladesh	$18-$40

Choosing vendors with reasonable hourly rates does not simply mean choosing the ones that offer the lowest rates. You also have to consider many other factors, such as budget coherence, their prestige, their commitment, employee competency to decide.

Related posts: 

Top 8 IT Outsourcing Countries

Top outsourcing companies in Vietnam

4. Favorable service policy

Another important factor for you to consider is the service policy that the vendor is willing to offer. This can be shown through their flexibility and cost-sharing policies.

Flexibility

It is very common that your process or your requirements don’t match the service offering that the vendors follow. If that’s the case, you should go for the vendors that can adjust themselves to align with your operations. By working with a vendor that is willing to do this, you will not have to spend a lot of time adapting.

Flexibility is also shown in how the vendors offer the engagement model. Each vendor will have its main models, but only some of them are ready to change their way of working to meet your needs. Stick to these vendors because their willingness to adhere to you shows how important you are to them.

Cost-sharing policies

When working with an external party, it is often the case that you are hindered by numerous hidden costs. For example, an embedded testing center has to import these specific electronic devices from a foreign country to carry out testing. The cost to transport and move the devices from one country to another can be very costly, and many vendors will charge you more for this.

However, with those vendors that have cost-sharing policies, they will be responsible for the transport fee in their countries, all you have to take care of is the fee for delivering them to the vendor’s place. Please be noted that not every vendor can offer you these cost-sharing policies. Therefore, you have to look very carefully and ask for the details of how much they can help you save.

5. Location, time zone & culture

The location of the outsourcing service providers can affect greatly how the project will operate in the future. When it comes to IT Outsourcing, you can either hire a local team or the remote team (which can be offshore). With different choices, you will have different approaches and management methods.

For example, in case of emergencies that require close-up management and direct check-up from the vendor, a closer vendor would save up the time and travel costs.

In terms of time zone, you should choose those IT vendors that can easily set up meetings and provide answers quickly. Any problems or issues can be addressed immediately without any delay. Choosing the countries with opposite time zone is not very ideal, unless you can save a lot of money with them.

Culture is another feature that you need to take into consideration, as it can immensely affect team morale and possibly team performance. Cultural differences lead to crashes in how the team works and communicates with each other. If an issue cannot get delivered and handled with cultural awareness, it is very much likely to fail, leading to a derailed project.

6. Strict process

A strict process can help you make sure that every operation and function from both parties go hand in hand. As a result, you can also streamline the project’s objectives, hence achieving the desired results.

Choose the right IT outsourcing vendors that can strictly adhere to the agreed work process. With this being done, every activity of your project will be turned into a cognitive part of the well-oiled machine in which any problems will have a protocol to deal with.

Besides the working process, you also need to find those that can produce a detailed security process. This security process is considered a blueprint of what to do and why it is necessary to achieve robust security. A security process makes the employees from both the clients and vendors comply with certain steps and rules, which will eventually ensure that everything is carried out as scheduled.

Lotus QA as a trusted IT Outsourcing vendor

Lotus QA has the expertise and experience with IT services in many domains such as retail, food and beverage, healthcare, etc., making us one trustworthy and professional service provider for businesses wanting to implement IT outsourcing. When working with us, you will get access to:

• High Security: LQA not only follows stringent procedures of ISO 27000:01 for optimal security and international standardized process but also flexibly adapts to clients’ requirements
• Quality Human Resource: we ensure staff competency through strict rounds of interviews, on-job orientations, and continuous learning & development for the most suitable QA staff.
• Flexibility: We provide different working models to allow clients to choose or change the plan at any time.

Contact us for more support with IT outsourcing vendor:

• Website: https://www.lotus-qa.com/
• Tel: (+84) 24-6660-7474
• Fanpage: https://www.facebook.com/LotusQualityAssurance

Cost-saving has always been the top priority for businesses when implementing IT Outsourcing. But when we break it down to smaller categories, there are different approaches for different outsourcing models. To accurately estimate the IT Outsourcing cost for your next project, check out our guide for fixed-price projects and time & material projects.

1. For fixed-priced project

The project-based IT outsourcing model is the working model that deals with small-size or mid-size projects. The name speaks for itself. It means that the model works based on each project. These projects have crystal-clear requirements of what the outputs are. Tailor-made for projects with fixed budgets, a project-based outsourcing model is the most suitable when you already know what to expect from this project.

To estimate the price for a fixed-priced project, you need to follow through these steps:

• Break down the project into smaller parts
• Estimate effort for each task
• Set the price unit for each task
• Estimate cost for infrastructure
• Estimate additional Cost

Know what IT Outsourcing model is for your business

Break down the project into smaller parts

You need to break down the project into small parts for a thorough estimation. As an IT outsourcing project contains a lot of features and tasks inside it, you knowing about these features and considering the prices of them help you gain a clearer vision of what you should include in the detailed estimation.

For example, an outsourced testing project might have different requirements in terms of the functions, modules, platforms, operation systems, etc, each of which has different pricing. When you estimate the project, you can get a hold of what you’re gonna outsource through a list of these.

Estimate effort for each task

The most common calculation unit used in IT outsourcing is man-month (or man-day in some cases). Usually, the vendors will provide you with their estimation of how many man-months are there gonna be. Looking into this number, you can see whether the number is accurate. If not, you come to the vendors to discuss more what they do during this period of time and whether they can ensure the delivery time of the product to your business.

Set the price unit for each task

This is how clients and vendors do when it comes to the price unit for each task. First, you say the expected price for the service. Before coming up with these numbers, it is a must that you do your research on the average price range in different locations, with different companies. Second, you ask for the rate cards from the vendors. They will provide you with the details about their talent pool, what they can offer and how much it costs for these talents to work on your project.

After considering the rates from different sources, you can decide what the base rates you want to go with and look further into which vendors can give it to you.

Estimate cost for infrastructure

IT Outsourcing does not simply mean you hire the people from your vendors. In many cases, you have to outsource the infrastructure too. For infrastructure cost alone, it can take you significant IT Outsourcing Cost, maintenance requirements and hardware replacements.

From time to time, you also need to upgrade and update the utilities to run the outsourced team smoothly. As a result, it is a must for you to set aside your IT infrastructure cost because it will help you avoid any budget deficit in the future.

Estimate additional Cost

The situation of additional IT Outsourcing Cost is very common. These costs can come from the management costs, cost of unplanned and unforeseen risks, allowances, annual benefits, bonuses, etc.

These additional cost does not come in full form and they are not the same for a different project. In fact, it depends on how the vendors work with the talent pool. For many cases, the vendors will do annual bonuses and management costs, and you only have to pay for the overall service price.

So, remember to include all of the costs for your service level agreement so that you don’t have to pay additional costs in the future.

2. For time & material project

Time & Material (or T&M) contract is another popular IT Outsourcing contract that is being applied in many companies and projects in the world. In Time & Material, how you can estimate the IT outsourcing cost is a little different than that.

• Define the Team Structure
• Check the rate card for each position
• Estimate cost for infrastructure
• Check for payment policy

Define the Team Structure

In terms of project requirements, Time and Material is for businesses that are unsure of what the outcome of their projects/products should be. As a result, the first thing you need to identify when estimating the IT Outsourcing Cost for this is your team structure. To do this, you need to answer these questions:

• What kind of IT functions do you want to outsource?
• Do you need a team to do the whole software development life cycle, or do you just want to outsource software development or software testing?
• How do you want to manage your outsourced team? The project manager can be your personnel or you can hire the project manager from the vendor.

Once you’re done with the team structure, you can move to the next step: which is to check for the rate card for each position.

Check the rate card for each position

There are big differences between how much it costs for you to hire a software developer and a software tester. Even the rate cards for the same position with the same experience vary within different countries. You can take a look at this example table:

Destination	Rates	Countries
Eastern Europe	$25-$50	Ukraine, Romania, Poland, Bulgaria, Hungary, Czech Republic, Slovakia, Belarus
Latin America	$30-$50	Argentina, Brazil, Mexico, Colombia, Peru, Chile
Africa	$20-$40	South Africa, Morocco, Kenya, Nigeria, Egypt
Asia	$18-$40	India, China, Indonesia, Philippines, Vietnam, Pakistan, Malaysia, Bangladesh

As you can see, different destinations offer you different price ranges, and you need to know what you want to prioritize to choose a suitable market for further research. It is also advisable that you can consider the rate cards from multiple vendors to finally choose the one that can offer you the best service within your budget.

Estimate cost for infrastructure

For Time & material projects, the infrastructure may vary and change over time, as your business would also change the project requirements and trajectory. So how do you estimate the infrastructure cost?

The answer is you need to dig deeper into these factors to see whether you would want them to be covered by the vendor or not.

• Data centers
• Network and storage
• Physical servers
• Virtualization
• Operating system
• Databases
• Application
• Data

Infrastructure is tangible, so you can easily set what you want to achieve from the outsourced team. In case of any changes in the future, you should include a term in your service level agreement, clarifying what range of change is allowed.

Check for payment policy 

For Time & material contracts, the payment policy is very important. Normally, the client will pay the vendor in a monthly basis, covering every single kind of cost for the outsourcing services. However, due to the competitive market, the client now has the benefit of choosing from those vendors that have payment policies.

For example, Lotus QA currently has the “Cost-sharing” policy for our embedded software testing service. For any client in this service, Lotus QA will have some sort of financial policy in which we will share the costs in some particular situation. Plus, our services are far beyond that, as our embedded software testing team will take care of the logistic part, in which we transport the infrastructure and the to-be-tested machines to Hanoi. In other words, you won’t have to worry about the tariffs, the customs when delivering the testing devices to Lotus.

On the final note

The IT Outsourcing market in 2022 faces new challenges including competition for talent, tech layoffs, and the global economic recession. Despite that context, Gartner predicts 2023 IT spending will still grow 5.1% compared to 2022. Instead of cutting down costs without any strategic plan, IT leaders adjust their budget priorities.

If you want to update the latest trends in IT Outsourcing, and get the most valuable return on your investment, check out our IT Outsourcing Ultimate Guide: Definition, Types & Models, And Trends To Look Out for in 2023!

Get lost in how to estimate your outsourced project? Don’t know where to go with your IT functions? Contact Lotus QA’s expert for more information on this. With personnel with more than 5 years of experience, Lotus QA can give your the consultation that you need.

Lotus QA has the expertise and professionalism with IT services in many domains such as retail, food and beverage, healthcare, etc., making us one trustworthy and professional service provider for businesses wanting to implement IT outsourcing. When working with us, you will get access to:

• High Security: LQA not only follows stringent procedures of ISO 27000:01 for optimal security and international standardized process but also flexibly adapts to clients’ requirements
• Quality Human Resource: we ensure staff competency through strict rounds of interviews, on-job orientations, continuous learning & development for the most suitable QA staff.
• Flexibility: We provide different working models to allow clients to choose or change the plan at any time.

Contact us for more support with automation testing services:

• Website: https://www.lotus-qa.com/
• Tel: (+84) 24-6660-7474
• Fanpage: https://www.facebook.com/LotusQualityAssurance