11 Successful Outsourcing Case Studies From Tech Giants
The growth in outsourcing and remote working opportunities are the silver lining among the dark clouds brought on us by the Covid-19 pandemic.
During the early stages of the pandemic, many were in a clueless situation, and many outsourcing companies faced a dip in their productivity.
But once everybody got accustomed to the situation and adopted new technological solutions, the outsourcing capabilities and business opportunities found new paths to venture.
As per a global IT outsourcing market study, the industry is expected to grow by 98 billion USD by 2024, with a Compound Annual Growth Rate (CAGR) of 5%.
Though outsourcing is a highly profitable and effective way to improve your business, there are things you should consider and learn before you implement them. Learning from the experiences of companies that have successfully done this can be an easy way to start.
After reading this blog, you will get a more comprehensive understanding of outsourcing and imbibe the tactics used by companies that run successful outsourcing teams.
Take a deep breath and dive right in.
Before we jump into the stories of IT outsourcing success, let’s take a quick look at the basics of outsourcing a business. We all know that outsourcing is hiring talent from the outside for a service, but there are some confusing FAQs that really need to be addressed before we proceed further.
Why Do You Need to Outsource?
You may be a talented entrepreneur with high business acumen and technical skills, but you can’t run a business all by yourself. For moving that mountain you need a team.
Hiring a team of developers near you would be costly and sometimes the quality of talent available to a business at its early stages would be not up to the mark.
Those are the first signs that push you to the idea of outsourcing your business. The world has a talent pool far greater and economically feasible than local talent.
When Do You Need Outsourcing?
The stage at which a company needs to outsource is completely dependent on it; some companies need to outsource in the initial stages like Alibaba, where some prefer to outsource after they have established a proper foundation.
The time to outsource depends on a few factors:
- The quota of talent you can gather by outsourcing without disrupting your process.
- Economic condition of the company.
- Whether you can find quality service offshore.
- Does outsourcing support your business plan.
You have to first examine all the possibilities and then determine if outsourcing is the right way to go.
See how you can outsource product development in the right way and avoid some common costly mistakes.
What Should You Outsource?
A business has so many platforms that make it function, such as customer support, product development, branding and so on.
But the thing is, you can’t outsource all of these platforms.
You can’t outsource something because you don’t feel like it; you have to farm out the things which don’t affect your core business and outsource them if they need to be outsourced. The things that companies usually outsource are:
- Special set of skills that is required at a definite point in time.
- For doing repetitive tasks.
- For expertise knowledge.
There are a lot of things to keep in mind while outsourcing; otherwise, it may result in the failure of the company as a whole.
Outsourcing Success Stories
Finding examples of successful outsourcing companies is easy in this technological era. Many companies have grown their businesses by adopting remote work and outsourcing into their business plan. Here are a few successful outsourcing examples:
Curiosity stream is a global independent media company and video-on-demand streaming service that dipped their feet into the possibilities of outsourcing in 2019.
They hired a team of six programmers who helped them develop the video feature that increased the number of hours watched. This helped them increase their overall productivity and reduce the cost required to make the software.
Like most of the entrepreneurs who are reading this blog, the CuriosityStream team drew inspiration from the many successes of other companies and learned the ways to implement a successful outsourcing program.
Based on the interviews of Andre Silva, CTO of CuriosityStream, the advice he gives other entrepreneurs is to figure out ways to integrate the offshore team with the on-site team.
2. StudyTube Hires
StudyTube is an online education platform based in the Netherlands, which relies on nearshore programmers. They collaborated with part-time engineers in the early stages but soon realized it was not meant to be.
So they hired Ukrainian developers and this nearshore outsourcing concreted their chances to grow their business. With a secured investment totaling €1,500,000, they are still scaling constantly.
We are all familiar with Skype, the telecommunication application that specializes in video and voice calls between devices via the internet.
European web developers were employed for most of the software development. Skype claimed that it needed professional web development for its product idea, so it chose outsourcing as an option.
The 300 million monthly active users and almost 1 billion downloads can vouch for the success they have achieved through outsourcing.
Among the success stories of companies from outsourcing, Slack has a growth story on its own. The company hired a Canadian design team MetaLab to help with developing a successful product from the beta version.
The company raised a total valuation of $ 5 billion in July 2017, and they are still growing. The company gathered more investments by outsourcing website design and mobile app development.
Slack’s rag-to-riches story is a great example of the best IT outsourcing success stories. MetaLab provided the Slack team with valuable feedback, which helped them create a tool that reached 15,000 users in 2 weeks of its launch.
GitHub provides hosting for software development version control using Git. This subsidiary of Microsoft offers version control and source code management (SCM) functionality of Git and adds its own features to the mix.
GitHub is one of the companies that outsourced its MVP. They hired a backend developer to build the backend of the product.
Whatsapp has over 1.5 billion active users in over 180 countries, and this highly successful company is no new to outsourcing. With the small cash reserve they had, founders Jan Koum and Brian Acton decided the best way to develop the product was through outsourcing.
So they hired Russian app developers to minimize operational costs and get highly skilled developers. Whatsapp has become the third most downloaded android app on Google Play Store and has an active user base of over 2 billion.
Created by two ex-Googlers, Waitwhile solves a common problem for people, waiting in line for a call. We hate being held up at “receiver point” for hours on end with an infuriating tone that rings periodically. Waitwhile is solving that problem with the help of an AI; will wait for you while you do your productive work.
Waitwhile initially had a base app that the initial users well received, and scaling became imminent. But they were limited by their technology; that is when they outsourced the work to NeoITO.
We upgraded their old framework, which was made from AngularJS, and gave it the necessary features to support high-scaling possibilities. With over 2 million hits, Waitwhile has announced its position in the market.
8. Widget Brain
Widget Brain is a Netherlands-based startup company and is a pioneer in AI-driven workforce management. It is one of the hottest startups in the Netherlands.
Outsourcing changed the game for them when they hired five Ukrainian developers, the quality of the workforce they received at a feasible rate helped them in their growth as a business.
Software outsourcing has helped Widget Brain gather 2 million dollars in investment to expand worldwide.
Oktopost is a social media management platform launched in 2013. They operated in Israel, Ukraine, and the US, with an employee count of 22.
In 2018, Oktopost hired software developers through Daxx that helped them extend their roadmap and helped them scale their business. The offshore development team has certainly helped them develop services they struggled with in the earlier stages. The outsourced work helped them improve their business roadmap and attract more investments and customers.
You can never leave out Alibaba of the list of successful outsourcing examples. Jack Ma, the co-founder of Alibaba Group, is a strong proponent of an open and market-driven economy.
Jack Ma initially outsourced his software development work to the US. This move was to appeal to a bilingual audience and to hire skilled tech professionals, which he did not find locally.
This did not go in vain as Alibaba now accounts for a 60% share of the Chinese e-commerce market.
TransferWise is a global money transfer company that says they don’t do offshoring, outsourcing, or use consultants. However, the company admits to having “independent workers” who are an integral part of the core team working remotely.
The company’s remote team is dispersed across Estonia and Ukraine. Ukrainian technicians are sought out for their quick technical reflexes and the skills they put forward.
There lies a common misconception in people’s minds that outsourcing leads to poor management practices and below-par services for customers. To reap the benefits of outsourcing, you need to hire the right people that can meet your requirements.
The below blog will help you choose the right partner for outsourcing your software development.
To find the right outsourcing partner, you need to know the type of outsourcing model ideal for your business. Proper utilization of outsourcing helps boost a business’s efficiency and economy.
Want to know more about how you can benefit from outsourcing? Read our Case Studies and Book a Free Consultation today!