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IT Consulting | Outsourcing | Vietnam

If you are a startup’s founder, you may already be aware of the challenges you’ll need to face, such as a limited budget for hiring employees. Hiring decisions are more difficult than usual, especially when you want to make the most of your resources. This is where outsourcing software development services come in. But you might be wondering: Why is IT outsourcing a strategic approach for the startup ecosystem? 

Understandably, many startups would want to hire an in-house IT team or perform the entire software development process themselves if they were tech-savvy. However, doing this can result in losing time and resources that should have been used in other parts of the business. 

By outsourcing IT services to a reputable provider, you have a dedicated team of specialists who can provide quality services for your startup's success. 
Of course, IT outsourcing is only advantageous when done right and when you choose the best partner for your needs.

Read on as we explore the pros and cons of outsourcing and how to make the most out of an IT partner for your startup.
 

## What You Need to Know About Outsourcing

 ![](https://res.cloudinary.com/innomizetech/image/upload/v1699425978/production/blog_startup_51966e6ba9.jpg) 
 
Before anything else, what is outsourcing in the first place? 

IT outsourcing for a startup refers to using external service providers to deliver IT-related services, including software development, software integration, cloud services, design services, and more. 

It entails handing over tasks to your chosen IT partner while you oversee things as needed. You can outsource IT services either onshore or offshore, gaining access to top talent without the limit of economic or geographical boundaries. 

That way, startups won’t fall behind the competition as they rise with the proper IT specialists and the latest technology trends available through outsourcing. 

There are numerous advantages to outsourcing software development services, including:

### **Save Time**

When it comes to running your IT department as a startup, things can get overwhelming, especially if you aren’t tech-savvy. You run the risk of spending too much time trying to manage the software development process and not focusing on the other responsibilities related to your startup's success and scalability. 

This is where an IT partner comes along to make up for the possible lack of resources your startup is currently experiencing. Your team will include a project manager who will manage the entire software development project from start to finish, allowing you to focus on your core business.
 

### **Potential Cost Savings**

Ideally, you want to invest in the best technologies and top talent to achieve your short and long-term goals. However, this will cost a lot of money in the long run, which many startups may not be able to afford yet. 

Outsourcing the necessary IT services, such as software development, saves you more money than hiring an in-house team. 

How?
You will have a team of knowledgeable IT staff members who have received the appropriate education and training to turn your project into a reality. Because you are outsourcing IT services, you will not have to pay for benefits, including health insurance, fitness benefits, college debt relief, retirement benefits, and more. 

The right IT partner will also work with you and your budget, allowing you to only pay for the level of service required. 

With the potential cost savings, you can maximize your financial resources to further grow your business in other ways.
 

### **24/7 Support**

In case of problems that arise during the software development process, your IT partner will be there to address them immediately. Compared to an in-house software development team that follows the typical 9-5 hours, an IT partner like us at Innomize will provide 24/7 customer support. 

They are readily available to answer your queries or find solutions to issues before they worsen, which also saves you time and money in the long run. 
 

### **Access to Top Talent**

No one can run a startup alone. A software development outsourcing company can offer an experienced extra set of hands to make the project process quicker and more efficient. 

Startups might only have access to a small pool of local talents, which can limit the potential of a project’s success. You can expand your horizons and outsource IT services, allowing you to gain a team of specialists for a greater competitive advantage.

### **Data Protection**

Besides the quality work done by a knowledgeable team, startups are also assured that their data is protected. Remember, when launching a startup and operating online, there are cybersecurity risks to be wary of. A reputable IT partner will provide the necessary cybersecurity software and practices so all your data will be protected from hackers and malware.

Your IT partner will also secure your data with a backup system in place for further protection. In case of accidents that lead to data loss, your data is backed up and will be retrieved within seconds.

With all these advantages in mind, there are also disadvantages to consider, which are:

### **Risk of Ineffective Collaboration**

Many startups tend to outsource their IT projects to companies from different countries or time zones. There is no problem with this, but the physical distance and cultural differences may result in ineffective communication or collaboration.

Both startups and outsourcing companies may come across minor issues such as differences in working hours and availability, or misunderstandings due to language and communication barriers.

Fortunately, this is a minor issue with many solutions thanks to today’s technologies. From project management tools, and video conferencing platforms, to improved translation services, you can easily overcome communication barriers. Just make sure you also put effort into choosing the most suitable provider and discuss your expectations before beginning the project. 

### **Lost of Control**

Understandably, you can feel possessive of your business or product, which makes it challenging to delegate tasks. Many startup founders may feel wary when giving up some form of control in the software development process. 

Again, this is a preventable risk provided that you practice your due diligence when selecting an IT partner. It’s important to choose an outsourcing company you can trust. 

## **Why is IT Outsourcing a Strategic Approach for the Startup Ecosystem?**

 ![](https://res.cloudinary.com/innomizetech/image/upload/v1699426284/production/startup_3267505_1280_8ba3949d95.jpg) 

Here are just a few situations that make IT outsourcing a strategic approach for startups:

### **Talent Pool**

The foundation of any successful business is a solid team of specialists who can perform tasks successfully. 

Startups face the challenge of competing against larger companies over top talents within their location. Moreover, they also have to worry about the extra expenses when hiring in-house employees, such as office space rental, healthcare, and other benefits. 

IT outsourcing allows you to gain access to an even bigger talent pool, particularly those with prior experience in your industry. When you work with the right IT partner, your project will be delivered in a timely manner and with quality in mind. Better yet, you can benefit from a full digital services company, having an experienced professional team ready to work on your software development projects. 

### **Geographic Expansion**

If you are a startup that would like to break into new markets, you’ll realize that it will be both an opportunity and a challenge. Cultural and language barriers, local regulations, and other factors can pose obstacles, especially if you aren’t familiar with the market location.

This is where outsourcing is a good idea, as it can serve as a strategic enabler for geographic expansion with localized expertise. When outsourcing your IT services to a company based in a location you’d like to break into, you can rest assured they have experience with your target market and will stay compliant with local laws.

### **Business Continuity**

In today’s ever-volatile business landscape, you must watch out for disruptions, many of which come without any warning. From sudden changes in market dynamics to more serious issues like a global pandemic, keeping your business afloat can be difficult.

As such, business continuity and disaster recovery are two crucial aspects that will help a startup grow and survive. 

IT outsourcing can be your safety net for this. When you outsource teams from different geographic locations, a part of your business stays operational even if another location faces an unexpected crisis. As such, you can maintain essential functions and services, protecting your startup from significant losses.

### **Time to Market**

When time to market is a huge concern, IT outsourcing is a wise idea for startups. If you’re dealing with a short deadline and your in-house team isn’t available, outsourcing external talent will allow you to complete your projects on time without scrimping on quality. 

### **When Skills don't Match**

If you already have an in-house IT department with skills that are either outdated or don’t foster business growth, you may want to outsource your tasks to a reputable company with the right specialists. The same goes for startups that notice they spend too much time on in-house IT services. 

This goes for startups that are experiencing a high turnover rate, as this may mean you aren’t paying your in-house employees enough. Outsourcing IT services will allow you to reduce time and money when it comes to the hiring process, onboarding, sick leaves, and the like. 

If you already have an in-house IT team, it is still worth outsourcing certain services, particularly “mundane” tasks that free up your team’s time and resources. When you notice your in-house employees aren’t working as efficiently as expected, it’s worth looking into outsourcing certain IT tasks. 

### **IT isn't a Core Competency**

Is IT an integral part of your startup’s core competency? If not, and you see IT as a commodity, IT outsourcing will be extremely effective. 

Also, if hiring, managing, or maintaining IT operations is causing you issues, then outsourcing will help free up your time and energy to focus on growing your startup. You will still receive the same quality of service at lower costs without losing your competitive advantage. 

Remember, things like software development will require you to keep up with the latest technology trends. It can be difficult to keep up and oversee everything when you are dealing with other responsibilities.

Outsourcing your IT services will help you rest assured that your IT partner is in touch with the latest trends and industry practices when completing your software development project. 

### **Core Duties**

Founders of startups will need to take care of many things to keep their businesses operating efficiently, such as product development, marketing, customer service, and even HR.

Juggling multiple tasks can negatively affect your focus, compromising the quality of your core offerings. When you are spread too thin and don’t have the tech savvy to provide IT services, you may want to outsource certain tasks or projects so you can focus more on other duties that allow you to maintain your startup reputation and increase sales.

### **Startup Scalability**

When your startup starts to progress, scalability becomes a crucial concern. You will need to know how to scale your operations up or down, depending on the market demands and investment milestones you reach. 

Whether you are scaling up or down, an IT partner will give you an unparalleled level of flexibility you can’t find elsewhere. Whether you are scaling up for a product launch or going back to maximize your operational efficiency, your IT partner can adjust the size and scope of services to meet your specific needs and preferences. 

The startup scalability you can get from outsourcing will also allow you to quickly adapt to market trends and opportunities, making your startup more agile in the ever-changing business environment. 

## What to Consider When Outsourcing IT Services For a Startup

As mentioned, the success of your startup depends on strategic outsourcing. When you choose the right IT partner and establish clear expectations from the start, you have more of a chance to achieve long-term success.

That said, it can get confusing trying to find a good IT outsourcing company that meets your expectations. To help narrow down your options, here are the important factors to consider, as well as bonus tips to help get the most out of your partnership with your chosen software development company:

### **Identify Your Approach**

The most important time of the outsourcing process is the beginning when you must identify your approach. Here are a few things to consider so you can identify your approach:

- Do you want to connect technology gaps?
- Are you focused on cutting costs?
- Do you need to hire a specialist?
- Have you prepared a clear scope of your project?
- What are the specific functions you need to outsource?

After answering these questions, you’ll then be able to identify what approach to take when outsourcing software development services.

### **Choose an Engagement Model**

Other than identifying the right approach to outsourcing IT services, you must choose the right engagement model. There are varying models a startup can follow to complete their work successfully:

- Hire a single developer: A remote developer is suitable to meet any technology gaps that occur in the middle of your software development project. 
- Have a remote team: If you are a startup that is currently working on a project or looking to scale up its operations, you may want to outsource an offshore team, gaining access to specialists without paying high prices when hiring an in-house team. 
- End-to-end product development: This is suitable for startups that require IT services to develop a product from start to finish. The outsourcing company will get everything done, beginning with ideation and development to marketing analysis and scaling. 
- Find a technology partner: This is suitable for startups that do not have the expertise or resources to digitize. Technology partners can help a startup automate and become more technologically advanced through software development services. 

### **Have a Clear Scope**

Besides setting realistic goals when choosing an IT partner, you must also set a clearly defined scope for your project.

Knowing your goals isn’t enough. You must have a scope that specifies everything you expect the IT partner to accomplish. Define the tasks that need to be done down to the price. This will set expectations early on and prevent any misunderstandings or preventable mistakes. 

### **Check the Reviews**

Unfortunately, there are just as many poorly-rated software development companies as there are reputable ones. Some startups can face poor-quality performance, overpaying for services, and even scammers, where service providers simply disappear after payment. 

You can avoid all those risks by checking the reviews of previous clients and paying attention to what they liked and didn’t like about the IT partner. This allows you to know what to expect from the IT partner and if they are worth working with or not. 

### **Don’t Go for Cheap**

As a startup, it may be tempting to choose an IT vendor with the lowest rates. However, this can produce the opposite results you’re hoping for. If you opt to hire the cheapest IT partner without taking into account their case studies and customer testimonials, you might end up paying more for poor-quality progress.

While your budget is important, lower prices come with the risk of financial losses in the long run. Always consider other factors besides their prices, including experience, communication skills, etc.

### **Choose the Right Pricing Models**

There are two major pricing models to choose from:

- Fixed price
- Dedicated team

Fixed price models refer to setting a single rate for a project no matter the time and cost. They are best for large companies as the price will remain the same regardless of the hours and materials used.

The Dedicated team model is best suited for startups, as it involves billing the client for the monthly duration spent on the project. This allows more flexibility for both parties.

To better understand the difference between those two pricing models, you can read further in our article explaining the [Outsourcing business models : Fixed Price VS. Dedicated Team](https://innomizetech.com/blog/outsourcing-business-models-fixed-price-vs-dedicated-team). 

### **Watch Out for Bad Communication**

Communication is vital to every successful startup and partnership. In fact, it must be one of your startup’s core competencies. Unfortunately, not all IT partners offer suitable communication skills. The good news is that it’s possible to spot poor communication before choosing who to hire.

Some communication red flags include missed calls, miscommunication due to language barriers, or unwillingness to adjust to your schedule. If you notice any of these situations, it’s recommended to move to another IT partner. 

You will want to find an IT partner who shows empathy, will enthusiastically answer any queries you have, and will establish clear communication lines throughout the software development process. 

## To Sum It Up

In today’s highly competitive world of startups, it’s crucial to find the right balance between reaching your goals with limited resources. IT outsourcing offers that balance, as it has been proven to help reduce costs and improve efficiency, accelerating your software development process for a successful project. 

Rather than hiring an in-house team or freelancers to perform the necessary IT-related services, outsourcing a dedicated team will provide solutions that can be scaled according to your startup’s ever-changing needs. 

While there may be a few minor risks associated with IT outsourcing, there are ways to keep them at bay, including clear communication lines and strategic outsourcing. Basically, it all begins by selecting the perfect IT partner for the job.

Hopefully, this guide helped you better understand why IT outsourcing is a strategic approach for the startup ecosystem.

If you’re still searching for the best IT partner to meet your expectations, we’ve got you covered at Innomize. We are the leading offshore development IT consulting company in Vietnam, ready to provide custom software development by utilizing the latest practices.

Our dedicated team will be more than ready to work full-time to develop your product, offering skills and expertise to meet your specific needs. On a budget? No problem, as we can provide tailor-made solutions that fit your overall budget, so you only pay for the services you require.

Don’t wait any longer and contact us today! Let’s discuss your project and the services we offer so your startup can start achieving more goals.

 ![](https://res.cloudinary.com/innomizetech/image/upload/v1699424610/production/DSC_0614_d7326e6b40.jpg) 
 

With years of industry experience and a team of skilled professionals, [INNOMIZE](https://innomizetech.com/) possesses the expertise to deliver top-notch software and IT solutions that are customized to your unique business needs.
Explore now our clients' testimonials on [Clutch](https://clutch.co/profile/innomize#reviews). We are committed to partnering with you as your dedicated team, collaborating closely to ensure the growth and success of your startup's business.