What are the pros and cons of iIT outsourcing?
Last updated: November 09, 2023 Read in fullscreen view
Recommended for you
- 07 Jul 2024
Top Fintech Companies in Vietnam Driving Innovation Across Digital Banking & Investment 28/44 - 18 Oct 2020 How to use the "Knowns" and "Unknowns" technique to manage assumptions 21/989
- 01 Oct 2020 Fail fast, learn faster with Agile methodology 13/973
- 12 Oct 2022 14 Common Reasons Software Projects Fail (And How To Avoid Them) 10/504
- 15 Oct 2022 Project-based team model for one-off and pilot software development projects 10/730
- 24 Nov 2025 Top Blockchain Companies in Vietnam 10/27
- 05 Aug 2025 Why Doesn’t South Korea Outsource Its IT Projects Like Other Developed Countries? 10/83
- 03 Oct 2020 Outsourcing Your MVP Development - Streamlined Solutions for future 9/400
- 19 Oct 2021 Is gold plating good or bad in project management? 7/754
- 10 Nov 2022 Poor Code Indicators and How to Improve Your Code? 7/213
- 21 Aug 2025 Top 30 Oldest IT Outsourcing Companies in Vietnam 7/89
- 31 Oct 2025 The True ROI of Software Development Outsourcing for Tech Startups 7/58
- 01 Mar 2023 Bug Prioritization - What are the 5 levels of priority? 6/207
- 01 Sep 2022 Facts Chart: Why Do Software Projects Fail? 6/540
- 10 May 2021 Project Audit and Second Opinion Services 6/236
- 24 Nov 2021 What is the Actual Cost of Hiring Cheap Developers? 6/348
- 08 Nov 2022 4 tips for meeting tough deadlines when outsourcing projects to software vendor 6/254
- 22 Mar 2022 8 Mistakes Marketing Agencies or Consulting Firms Make When Outsourcing Web Development 6/324
- 28 Jul 2022 POC, Prototypes, Pilots and MVP: What Are the Differences? 6/606
- 06 Feb 2021 Why fail fast and learn fast? 6/375
- 13 Oct 2021 Outsourcing Software Development: MVP, Proof of Concept (POC) and Prototyping. Which is better? 6/424
- 05 Mar 2021 How do you minimize risks when you outsource software development? 5/317
- 12 May 2021 The Real Cost Between Outsourcing IT vs In-House: A Quick Comparison 5/401
- 31 Aug 2022 What are the best practices for software contract negotiations? 5/215
- 05 Jan 2022 What Outsourcing Engagement Model is Right For You? 5/290
- 11 Mar 2023 Common Pain Points in Software Development Outsourcing 5/227
- 25 Sep 2025 A Practical Guide to Secure Online Work for Outsourced Teams 5/56
- 07 Oct 2025 Case Study: Using the “Messaging House” Framework to Build a Digital Transformation Roadmap 5/45
- 12 Dec 2021 Zero Sum Games Agile vs. Waterfall Project Management Methods 4/374
- 04 Oct 2022 Which ERP implementation strategy is right for your business? 4/278
- 14 Dec 2021 The Top 10 Problems with Outsourcing Implementation and How to Solve Them 4/376
- 02 May 2021 Outsourcing Software Development: Avoid 8 Mistakes 4/89
- 06 Mar 2021 4 things you need to do before getting an accurate quote for your software development 4/615
- 09 Jan 2021 How can outsourcing enable business agility? 4/178
- 14 Oct 2021 Advantages and Disadvantages of Time and Material Contract (T&M) 4/789
- 21 Oct 2021 Advantages and Disadvantages of IT Outsourcing 3/321
- 18 Jul 2021 How To Ramp Up An Offshore Software Development Team Quickly 3/516
- 19 Mar 2021 Selective Outsourcing of IT Functions - a new trend in business outsourcing 3/495
- 08 Oct 2022 KPI - The New Leadership 3/557
- 31 Oct 2021 Tips to Fail Fast With Outsourcing 3/375
- 16 Apr 2021 Insightful Business Technology Consulting at TIGO 3/376
- 16 Dec 2021 Why outsource Python development of your project? 3/444
- 12 Jan 2023 Top 10 Trustworthy IT Outsourcing Companies in Vietnam 3/262
- 18 Aug 2022 What are the consequences of poor requirements with software development projects? 3/242
- 09 Mar 2022 Consultant Implementation Pricing 3/184
- 16 Feb 2021 Choose Outsourcing for Your Non Disclosure Agreement (NDA) 3/150
- 07 Nov 2024 Outsourcing Crisis Looming: Will Trump's Policies Transform the Global IT Landscape? 3/157
- 01 Dec 2023 Laws of Project Management 3/249
- 05 Sep 2023 The Cold Start Problem: How to Start and Scale Network Effects 3/167
- 01 Jan 2024 Tech Partnerships: Choosing the Right Software Outsourcing Firm in Vietnam 3/165
- 08 Oct 2024 Vietnam: The Rising Star in Global Outsourcing – Trends and Costs for 2025 3/289
- 01 Jan 2023 4 New IT Outsourcing Pricing Models to consider in 2023 3/323
- 01 Jan 2023 Why is Vietnam the Top IT Outsourcing Destination of 2023? 3/202
- 01 Jan 2024 12 reasons for software development outsourcing 3/146
- 01 Jan 2024 Software Outsourcing Questions for 2024 3/145
- 03 Nov 2021 7 phases of Odoo Implementation and Development: Can they be outsourced? 2/357
- 21 Oct 2022 Outsourcing Billable Rate 2/244
- 01 Jan 2023 Software Development Outsourcing Trends to Watch Out for in 2023 2/268
- 06 Oct 2021 Intellectual property issues with outsourcing software development 2/364
- 10 Dec 2023 Pain points of User Acceptance Testing (UAT) 2/416
- 01 May 2024 Warren Buffett’s Golden Rule for Digital Transformation: Avoiding Tech Overload 2/188
- 08 Feb 2022 Software Development: Fixed Cost or Opportunity Cost? 2/444
- 01 Sep 2019 Outsourcing Software To Vietnam: Facts, benefits and limitations 2/392
- 01 Oct 2022 Vietnam is a favorite supply of IT outsourcing services to Japan 2/230
- 04 Jan 2021 VIETNAM AS A BIG ATTRACTIVE DESTINATION IN THE FIELD OF OUTSOURCING 2/276
- 10 Apr 2021 RFP vs POC: Why the proof of concept is replacing the request for proposal 2/254
- 07 Jul 2021 The 5 Levels of IT Help Desk Support 2/380
- 17 Feb 2022 Prioritizing Software Requirements with Kano Analysis 2/280
- 13 Dec 2020 Move fast, fail fast, fail-safe 2/292
- 23 Sep 2021 INFOGRAPHIC: Top 9 Software Outsourcing Mistakes 2/411
- 10 May 2021 What are things you should look for in a good IT outsourcing company? 2/405
- 28 Dec 2021 8 types of pricing models in software development outsourcing 2/417
- 28 Oct 2022 Build Operate Transfer (B.O.T) Model in Software Outsourcing 2/361
- 28 Oct 2022 Expect the unexpected in 2023 - How Outsourcing Can Help? 2/184
- 04 Oct 2021 Product Validation: The Key to Developing the Best Product Possible 2/295
- 17 Oct 2020 How Outsourcing can Improve Time Management for Better Business 2/184
- 19 Apr 2021 7 Most Common Time-Wasters For Software Development 1/525
- 13 Oct 2021 Why Outsourcing Software Development Services Is Gaining Traction With Non-Technical Leaders? 1/299
- 15 Aug 2021 TIGO Rate Formula - Things the partners should know 1/418
- 08 Aug 2021 Why Nearshore Software Development is better than In-House Development? 1/174
- 07 Oct 2022 Digital Transformation: Become a Technology Powerhouse 1/216
- 31 Dec 2021 Outsourcing Software Development to mitigate the impact of COVID-19 1/289
- 09 Sep 2022 Close Collaboration and Communication Can Overcome the Challenges of Distributed Teams 1/129
- 30 Oct 2022 How Much Does MVP Development Cost in 2023? 1/170
- 21 Aug 2022 Forbes: IT Outsourcing Hotspot: Vietnam, A Small But Mighty Powerhouse 1/240
- 12 Aug 2024 Understanding Google Analytics in Mumbai: A Beginner's Guide 1/84
- 01 Jun 2025 10 Sustainable & Unique IT Outsourcing Companies in Vietnam 1/58
- 11 Mar 2024 Why You Should Hire Odoo Developers from Vietnam to Customize Your ERP System 1/89
- 01 May 2023 Streamline Your Business with Outsourcing 1/168
- 09 Feb 2023 The Challenge of Fixed-Bid Software Projects 1/191
- 13 Jan 2023 What are the Hourly Rates in Offshore Software Development? 1/223
- 03 Jan 2023 IT Outsourcing Costs: Is outsourcing really cost-effective? 1/185
- 02 Mar 2021 Estimate the Cost of Software Development 1/312
- 01 Mar 2022 Top 5 reasons why outsourcing to Vietnam is a smart move 1/262
- 01 Apr 2021 IT Outsourcing to vietnam: Why It Is A Good Choice? 1/258
- 11 Jan 2024 What are the Benefits and Limitations of Augmented Intelligence? 1/434
- 01 Jan 2024 What The World Is Flat Means to IT Outsourcing 1/157
- 10 Jan 2024 Facts Chart: Reasons for outsourcing 1/132
- 26 Dec 2023 Improving Meeting Effectiveness Through the Six Thinking Hats 1/205
- 05 Jan 2024 Easy ASANA tips & tricks for you and your team 1/180
- 17 Jan 2024 What are the benefits and challenges of using multi-sourcing or single-sourcing strategies? 1/157
- 04 Apr 2024 Unlock Vietnamese-Japanese outsourcing potential 1/214
- 01 Jan 2024 Hiring Tech Talents in Asia: An Overview of Skills, Costs, and Potential 1/148
- 01 May 2023 CTO Interview Questions 1/296
- 12 Mar 2024 How do you create FOMO in software prospects? /127
- 01 Feb 2023 [InfoWorld] Is your outsourcer agile enough? /182
- 08 Jan 2024 Outsourcing on an As-Needed Basis /144
- 01 Jan 2023 Top 5 IT outsourcing countries in 2023 /254
- 15 Nov 2023 IT Staff Augmentation Types and the Best Choice for Your Business /155
- 01 Jan 2023 Top Software Development Challenges in 2023 /275
- 20 Nov 2022 Software Requirements Are A Communication Problem /233
- 17 Mar 2025 IT Consultants in Digital Transformation /62
- 10 Jul 2025 Building AI-Driven Knowledge Graphs from Unstructured Data /111
- 14 Mar 2024 Why should you opt for software localization from a professional agency? /117
- 01 Mar 2023 How do you deal with disputes and conflicts that may arise during a software consulting project? /145
- 06 Mar 2024 [SemRush] What Are LSI Keywords & Why They Don‘t Matter /131
- 09 Jan 2022 How to Bridge the Gap Between Business and IT? /163
- 10 Mar 2021 The 7 Biggest Mistakes to Avoid Before Outsourcing a Web Development Project /224
- 07 Aug 2022 Things to Consider When Choosing a Technology Partner /249
- 25 Nov 2021 Low-Cost Software Development: Buy Nice or Buy Twice? /278
- 06 Nov 2019 How to Access Software Project Size? /236
- 19 Oct 2020 The hidden costs of outsourcing software development /434
- 03 Nov 2022 Top questions and answers you must know before ask for software outsourcing /264
- 03 Nov 2022 Top questions and answers you must know before ask for software outsourcing /264
- 16 Mar 2021 Outsource Data Engineering Services - TIGO Streamlined Solutions /234
- 19 Oct 2021 Software development life cycles /628
- 12 Oct 2021 Vietnam outsourcing path - the silk road connecting ASEAN with the developed countries (EU, US, Japan...) /282
What are the advantages of outsourcing?
Cutting expenses
Usually outsourcing work will be cheaper than hiring your own permanent staff. This means you cut costs, both in terms of spending less time recruiting ‘the perfect candidate’ as well as cutting your expenses by employing and training less staff and reducing overheads.
Immediate understanding of your costs
When you use outsourcing for projects, you will know what your costs are to fulfil that project. That in turn will lead to a quicker understanding of your profits and ensure that you can easily control costs and reduce financial risks.
Increased reach
Outsourcing can give you access to capabilities and facilities otherwise not accessible or affordable.
Increasing productivity and efficiency
Outsourcing means you spend less time on the processes that your business doesn’t do so well and frees up your time to concentrate on the processes that gain you the most profit. It also means that your business can earn profit even when your staff are not there (particularly if you can outsource work overseas using different time zones). Of course, it also means that things can be done a lot more quickly by outsourcing a variety of projects at the same time, helping your business increase its productivity and efficiency.
Improved focus on core business activities
Outsourcing can free up your business to focus on its strengths, allowing your staff to concentrate on their main tasks and on future strategy
What are the disadvantages of outsourcing?
Smaller work time overlap
Especially for remote offices that are far removed geographically, time zone difference reduces the time each day when the team on both sides can communicate with each other. TThis almost always leads to one team being inconvenienced, either waking up a lot earlier or calling it a day a lot later, which tends to build tension between teams over time.
Longer iterations
Especially in cases where product and engineering are in different sites, the product iteration process greatly slows down, on account of each iteration requiring syncing teams on both sides, a process that is made harder by the factors above. I always suggest keeping a product function at the engineering office to make sure quick product iterations can still happen.
Negative impact on staff
Although it isn’t always the case, some employees may find themselves carrying out activities that they deem menial and not so interesting, and their morale may fall. They may conclude that they should be carrying out the work and, if they find out the fees the outsourcing company is charging, they may feel they should have a pay rise or leave and find jobs elsewhere (including outsourcing themselves).
Data Protection and Confidentiality risks
Whilst the written agreement between the parties should set out all the terms of the outsourcing, including responsibilities for data protection and confidential information, it can sometimes be easier to enforce the terms of an employment contract than a consultancy agreement, for example.
Employees not only have written terms of an employment contract, they also have implied terms too which include the duty not to compete with the employer and to keep trade secrets confidential.
Lack of Consistency
Although you can set out written terms of the outsourcing, by using different outsourcing contracts you may find that they are delivered in a variety of different ways and not consistent with your brand. In addition, there may be staff, management or substitution changes within the outsourcing itself which means that your activity is delayed; not consistent with previous work done or not up to standard.
In closing
Offshore outsourcing, although potentially more cost-effective, may present additional challenges such as hidden costs of provider selection or handover, severance and costs related to layoffs of local employees who will not be relocated internationally, etc. Even simply managing the offshore relationship can prove challenging due to time zones, different languages or cultural preferences.
Explore more on these topics
Guest Blogging: The Definitive Guide
Top Trending Topics
Share This
Link copied!