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REVIEWS

ImproveIT Solutions is Recognized as a Top Web Developer for Hospitality & Leisure in Ukraine

Clutch has recognized ImproveIT Solutions as a leading web developer in Ukraine for Hospitality & Leisure.

This recognition highlights our seven years of dedicated expertise in crafting tailored software solutions. For the hospitality sector in particular.

A big thank you to all our partners for their collaborative efforts over the years. We’re eager to embark on more impactful ventures together.

You can explore our work approach and find out more about successful collaborations within the hospitality industry through our case studies.

Read more: Hotel Management Software Development Guide: Features, Process & Cost

About Clutch: Clutch is a leading platform offering unbiased reviews and ratings for IT, marketing, and business service providers. Providing reliable information and authentic reviews, Clutch helps companies select the right partners for their projects.

About ImproveIT: ImproveIT Solutions specializes in creating outstanding digital products and robust engineering teams for hi-tech corporations and startups. Our primary focuses include web/SaaS and mobile app development, primarily serving global markets.

Since 2016, our custom software solutions have been utilized in 75 countries worldwide. We’ve successfully established dedicated development teams in Ukraine for over 50 clients. Our development centers are strategically located in Chernivtsi and Lviv, Ukraine.

We excel in forming strong dedicated teams, providing skilled specialists with 4-12 years of experience as an ad-hoc team extension, and constructing efficient software products from inception.

Categories
REVIEWS

The Manifest Names ImproveIT Solutions as one of the Most Reviewed App Developers in Lviv

There are many things that applications can bring to your business. This newest technology in the market provides a lot of new opportunities for everyone, and you can also utilize these apps! Learn more about how you can start your application development journey with the support of our ImproveIT Solutions team.

ImproveIT Solutions was established in 2016 and has since created fantastic digital products and powerful engineering teams for startups and high-tech companies. Custom web/SaaS and mobile app development are two main areas of concentration. We provide a variety of development solutions to help support your business in the best way possible.

Today, our team is excited to announce that we’ve been recently named one of the most-reviewed application development companies in Lviv by The Manifest. We are honored to be recognized for our efforts and commitment to the industry. This is a huge achievement for us and we are proud to finally share this with all of you.

In case you are not familiar with The Manifest, they are a company resource and business blog website that aims to gather and verify the hard data, expert insights, and actionable advice that you need to build your brand and grow your business – to provide the practical business wisdom that manifests in your success.

If you want to learn more about ImproveIT Solutions click here to explore our case studies and services.

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BEST PRACTICES

The Cost-Saving Paradox: When Hiring High-Priced Developers Is More Cost-Effective

The cost of the developers’ work can significantly affect the final budget of a product — an application, a website, or software. Of course, no one charges a fortune per hour, but developers’ hourly rates can seem high for clients.

As a customer, you may consider that it is more profitable to hire a software developer who has a bit less experience and a lower hourly price. However, in this case, pitfalls may await you. It may not be obvious, but a high rate, on the contrary, can reduce software development costs. In this article, we will find out how.

What affects the hourly rate of developers

To begin with, let’s find out what the cost of the developers’ work depends on. Several main factors influence this:

  • Location. US developers are paid several times more than developers from Eastern Europe due to market conditions. However, it does not mean that engineers from Eastern European countries are less expert. It’s mostly because of the local economy and lower cost of living.
  • Experience. It’s not a secret that juniors usually get paid less than middle or senior-level developers. For instance, in Ukraine the difference between their salaries may be 5-10x.
  • Technology stack. Hourly pay may also differ depending on the skillset an engineer has. Rare expertise means a higher price. Also, big demand for a specific technology makes such specialists more expensive.
  • Soft skills. Employees with great soft skills are highly valued in all domains, including IT. The knowledge of several languages, leadership experience, etc. also affect the hourly pay for engineers.

It is essential to take into account various factors beyond hourly rates when hiring developers, such as their experience, skills, and conformity with the project requirements. Considering all these factors, you already have an understanding of how much a software developer makes — those specialists can earn $15, $30, $60, $150, and even more per hour of work. 

The average software developer’s rates in Asia can vary from $15 to $35 per hour, in Eastern Europe — from $25 to $50, in Western Europe — from $50 to $100, and in the USA — from $70 to $150 and more. 

When high software developers’ rates can help to cut overall costs?

As we have already mentioned, you can find developers with different hourly rates on the market. Considering this, customers are tempted to save money and hire less expensive specialists. That completely makes sense. But very often less expensive means less experience. Will this compromise be okay for your product?

Yes, juniors are cheaper because they are in abundance on the market. Obviously, there is a risk that the work will take longer. In addition, a novice developer may not have enough knowledge to deliver a complex project. 

 And here the quality of software development services will depend on the management process. If you accurately estimate and assign tasks to each developer’s level, you can reduce costs and get high-quality work. 

Junior  specialists are suitable for handling straightforward, regular tasks, which might otherwise occupy the time of senior experts and hinder their effectiveness in carrying out crucial assignments.

Of course, a less experienced tech specialist can be trained, but it takes time. And time is money. Experienced software developers with a higher hourly rate are more qualified. High senior engineers’ salary for the most part means that they write good quality code much faster and know how to test it to make sure it’s correct. They are more productive and can do more work than juniors in the same amount of time. 

But, it’s essential to avoid assigning these specialists to perform basic tasks. Their expertise allows them to apply their knowledge in tackling more complex and global questions.

Working on difficult tasks and sophisticated products, an experienced pricey software developer can reduce overall costs in several ways:

1. Efficient problem-solving: Experienced engineers can solve issues and write code expertly, saving time and reducing the cost of a project. Their expertise allows them to see the whole picture of the product. When they solve a problem, they keep in mind the software integrity and overall functionality.

2. High code quality: Experienced developers do great job for their clients by writing clean, high-quality well-structured and documented code. They make fewer mistakes and correct them quickly, which also affects the final project’s price. This also means post-release maintenance and support costs will be reduced.

3. Faster time-to-market: As mentioned earlier, engineers with high hourly rates are more productive and can work faster. This speeds up the time-to-market for a product. Moreover, this can lead to increased revenue, which generally offsets the higher development cost.

Let’s look at a specific example of how a more experienced specialist with a high rate can save money. 

Imagine that you are faced with the choice of hiring two specialists to develop a new complicated feature. One of them, let’s call him Jim, is experienced in this field and costs $60 per hour. The second developer, John, has less experience and costs $25 per hour. 

Of course, at first sight, it seems more profitable to hire John, because it saves you a lot of money. But there is a huge snag here. Jim will spend only 3 hours doing that task, and this will cost you $180. In his turn, John, because of the lack of experience and the need to investigate the specifics of the task, can spend 15 hours, and this will cost you $375. 

Thus, in such cases experienced specialists with a high hourly rate can reduce costs and solve the problem in a short time, avoiding the need to redo the work. Тheir skills and abilities fully pay off.

But, what you also need to remember — it’s essential to strike a balance when forming a development team, not relying solely on super-specialists. A well-balanced team allows for skillful and efficient tasks allocation based on different complexity levels. 

As we mentioned earlier, less experienced engineers can effectively do regular tasks, freeing up the time for planning and implementation of more complex objectives for higher-level specialists.

For example, by mixing Jim’s and Jonh’s skills in the long-run perspective, you can benefit even more. Thanks to this balance, you can not just effectively distribute tasks, but also manage your budget efficiently.

That’s why at ImproveIT Solutions we carefully evaluate each task, opting for cost-effective solutions without unnecessary expenses. We make sure you pay for what you truly need.

Advantages of working with Ukrainian software development companies 

As we found out, a high hourly rate can indeed save you money. However, sometimes the project budget is very limited, and there are no extra funds to pay for expensive developers from the USA or EU countries. Often clients decide to find a nearshore software development company or offshore software development company.

In this case, you can choose an outsourcing team from another country, for instance in Eastern Europe, where developers have wide expertise and are more affordable.

One of the best destinations for outsourcing is Ukraine. Here you can find high-class specialists with a reasonable hourly rate, but at the same time, you save your budget and don’t overpay for the developers’ location. 

Ukrainian software development outsourcing companies are really in demand these days, because of the country’s thriving IT industry. You will get many benefits if you choose a Ukrainian IT company to develop an application, website, or software. You will get:

  • Team of professionals;
  • Developers with up-to-date knowledge and skills to work with the latest technologies;
  • Cost savings;
  • Product quality;
  • Ongoing support; 
  • Flexibility in collaboration models, etc.

So you’ll be provided with high-quality services for a reasonable price. Doesn’t it sound like the best software development company ever?

ImproveIT Solutions: reasonable price for high quality software development services

ImproveIT Solutions is one of the software development companies in Ukraine, which you can count on. Our team consists of competent and skilled developers who will help to bring your projects to life.

The main advantage of our team is that we take recruitment seriously. Most of our developers are middle and senior guys — experienced professionals with a wide range of skills. 

In addition, we carefully consider the prices for our services. With our team, you do not have to spend money on redoing work or hiring additional development forces.

We choose the best specialists to get the best results. And you will get a quality product at a reasonable price. To get started with us, just contact our software development team.

Categories
HOW-TO

Hotel Management Software Development Guide: Features, Process & Cost

The hospitality business is a fast-growing niche that develops day-to-day in different countries all around the world. Successful hospitality businesses have to improve themselves and optimize their work processes, in order to keep the lights on. 

What is the best and most obvious way of optimization in today’s digital environment? Of course, it is the implementation of management software that makes hoteliers’ lives easier and guest experiences better.

And for sure, you can use ready-made software solutions designed for different departments and needs – as a lot of hotels do. But this software is often oversaturated with unnecessary functions and doesn’t have the features that a particular hotel really needs. Obviously, such software won’t help to get rid of all the pain points. 

It remains clear that nothing works better than a custom software solution tailored to a specific business with its specific needs. You can have your own software that will contain only the functionality you need. This set of features will be combined into one system for all departments, with unified databases and automated processes for entering and processing information.

 If you don’t want to change all the tools you currently use, you can develop a custom “shell” for them, combine them into one system, and add the necessary functionality as needed.

The most cost-effective approach is to allocate a budget just once and develop the software that will 100% satisfy your needs so you never again pay for using imperfect tools.

Considering this, we create a detailed guide for the development of a hotel management system based on market forecast, business needs, and worldwide user experience.

So let’s explore the most important features of an HMS, the development process stages, and also the cost of its development in 2023. 

What is hotel management software?

An HMS, short for hotel management software –  is an instrument that is designed to automate business operations and processes in hotels. 

It’s worth noting, that an HMS can fit both small and large hotels, but depending on the size of businesses, software may have different functions.

This type of software was developed initially to let hoteliers manage front-office activities, such as check-in and check-out, booking reservations, managing prices of rooms, and billing guests. Thereby, an HMS replaced hard, tedious, and inflexible paperwork. 

hotel management software

But today the technology of managing hotel processes has expanded beyond a front office. Nowadays, an HMS is a central part of the hotel business. 

It helps hoteliers not only to control processes, conduct business operations and generate profits but also to make the guests’ experience amazing and unique.

The processes of automation and optimization, represented by an HMS, have the potential to enhance the satisfaction of clients by providing faster and more precise service, decreasing waiting times, and elevating the overall quality of experience. 

Moreover, a system can speed up the hotel employees’ work processes by taking over repetitive tasks and allowing them to work faster and bring more value to your business for the same costs. Additionally, an HMS can enhance operational efficiency by minimizing mistakes, improving productivity, and reducing costs.

Top Features of an HMS

top features of hms

Hoteliers face the challenge of providing a personalized experience for every guest, as well as running the business efficiently. The introduction of a hotel management system to your business will help to achieve all of these points. 

But when you decide to implement an HMS, the big question is what features it should have. It is obvious that software should have a user-friendly interface. However, some other features are not so apparent to those who want to optimize their businesses. Therefore, let’s explore the top functions of effective hotel management software.

1. Housekeeping and maintenance

This feature helps to assign various duties to housekeepers, manage room statuses, and organize staff’s work efficiently. 

For instance, a front-office manager can create a list of necessary tasks for housekeepers, and update the room information immediately. Also, customized hotel management software development may include an application for staff, allowing housekeepers to communicate with front-office personnel in real-time mode. 

An HMS enables employees to manage operations effectively and instantly conduct all customer requests without the need to contact other departments either by phone or email. 

Another not less important function of an HMS is maintenance management. Through an HMS, you can manage maintenance by recording all failures and repairs. 

Every member of the hotel team should have access to a list of assignments, work instructions, and other information from a smartphone, laptop, or another device. With a work process built in this manner, each team member knows precisely what to do, when, where, and how.

2. Billing, Invoicing, and Accounting

Billing and invoicing, cashiering, and currency exchange can be challenging tasks that consume a lot of time. For this reason, hotel management software should be created to simplify these processes and make staff activities more efficient. 

For example, guest payments can be managed, edited, and invoices can be generated and sent automatically. Invoicing for services and add-ons can also be easily managed.

Using custom-developed HMS, you can connect accounting with other departments (f.e. front office, procurement, etc.) and operations in the hotel – so it helps automate all financial data entry. Such a solution helps to optimize data accounting and reduce time-consuming processing work.

3. Booking Engine

The decision of a guest to book a room in your hotel is influenced by numerous factors. One of them is the presence of a booking engine and its performance. The best result can be achieved if this engine is perfectly compatible with an HMS.

The online booking mechanism is like a guide for hotel guests. With just one click, they receive information about a room, its availability and cost, breakfast and lunch options, and additional amenities. 

At the same time, the sooner a reservation is confirmed, the less likely a client will choose another hotel. 

A booking engine is an excellent process optimization tool, as it can replace several employees at once. You won’t have to rapidly reply to letters and calls anymore because an engine will do everything for you in seconds.

4. Front-desk and Back-office Management

The business is more than just planning and investments but, firstly, people. An effective hotel management system helps all employees to successfully administer a hotel and serve clients. 

Thanks to an HMS, front-desk workers get an opportunity to control reservations, rates, and room availability. Thus, they can add or change a reservation, make changes to room descriptions, and extend guests’ stay with one click. 

An HMS can also offer many features for back-office management, here are some of them:

  • Management of conferencing and events. This function is directly related to the planning and holding of different meetings or events. 
  • Inventory Management. This feature includes all processes related to the control of assets and products, for example, ordering, storage, and distribution. 
  • Human resources management. An HMS can centralize and optimize all processes related to hiring, training, or outboarding employees, as well as personnel data management.
  • Marketing. You can manage, launch and analyze successful marketing campaigns directly from an HMS. 

5. Channel Manager

Channel manager is an essential and reliable tool that will make your hotel visible on any booking platform. In addition, a channel manager will help you keep up-to-date information about rooms, prices, and availability on these platforms. With this feature, you won’t have to worry about unpleasant situations when one room is booked by several people or inaccurate prices.

Thanks to hotel management software, you can easily incorporate a channel manager into your business, and manage an unlimited number of distribution channels. As a result, you will be able to get more bookings from different platforms, which means you will boost your income.

6. Customer Data Management and CRM

Most hotel management systems have CRM modules that help to collect and manage customers’ data. Thanks to the implementation of CRM, all the necessary personal and contact information about your guests will be in front of you. Also, you can add information about new guests to the system or edit the profiles of regular customers.

With the help of an HMS with a CRM module, you can:

  • send personalized emails and offers to customers;
  • run a customer loyalty or membership program;
  • send documents for registration or invoices to customers by email;
  • see service ratings and reviews from each guest;
  • reduce queues during check-ins, because all customer data is already in your database;
  • leave information for hotel staff, etc.

Using hotel management software with CRM will help you better understand your guests, their behavior, and their preferences. 

Thanks to this, you will be able to provide guests with VIP service and get more bookings, positive reviews, and recommendations for your hotel. Also, it will increase the chances that customers will return to your hotel again in the future.

7. Seamless Third-party Integration

Hotel software should be open to third-party applications and services if you want to attract more customers. Integrated applications can be responsible for various aspects, including booking, marketing, data analysis, and so on.

For example, thanks to integration with online travel agencies, hospitality businesses can reach a wide audience of potential clients. Hotel managers can effortlessly modify room details and pricing on various booking platforms in this scenario.

Hotels can also benefit from integration with third-party guest engagement platforms providing the possibility to find all the information about the hotel, order food, call a maid, etc. using a smartphone.

8. Self-Service App for Guests

Nowadays, customer-oriented hotels are doing everything possible to ensure that their guests have the most personalized and wonderful vacation. One feature that makes it possible is a self-service app.

Thanks to such applications, guests can independently and remotely pay for their stay, order food, or some kind of service to their rooms. In addition, applications for guests provide the possibility of mobile check-in and check-out.

With an HMS, you can implement a guest self-service app and create a better customer experience. 

Process and Cost of the HMS Development in 2023

After you learned all the information about an HMS and its functions, you have decided to order the development of the customized software for your hotel. 

But what’s next? Let’s look at the stages of the development of software.

Foremost, you need to choose a company that will develop the custom software solution for you. For example, you can find and contact outsourcing companies. You can learn more about the benefits of hiring an outsourcing company here.

When you have already chosen tech specialists with the needed expertise, you need to present your idea to them. After that, the process of bringing your idea to life will begin.

The hotel management software development process includes:

  • Planning and estimation. Together, we form a concept with all the necessary features according to your business-specific needs. Then we plan data security, easy changeability, and scalability of the product, and choose the most cost-effective development approach.
  • Prototyping and design. Our IT specialists build a basic prototype of your future software based on the developed user journey map – client-oriented design, attractive interfaces, etc. We clearly define the product’s architecture, third-party integrations, and secure data processing. 
  • Implementation.  Tech specialists develop mobile and web applications using Agile development methodology and the latest technology stack. 
  • Quality assurance. The purpose of this process is to perform product defects reporting, tracking, fixing, and retesting until the product reaches the quality requirements. 
  • Deployment. Delivery of a fully functional and tested product that is available to end users.
  • Maintenance. Specialists provide the product’s health check, application monitoring, as well as application customization according to the needs and feedback from real users – your employees and guests.
full cycle software development process

What about the costs of custom hotel management software development? 

The cost of developing each project is different. If we are talking about software development for hotel management, the cost will depend on the number of functions and their complexity. 

The approximate average cost of custom hotel management software development can vary from $30,000 to $80,000 and more (depending on the product complexity). This price is possible if you cooperate with developers from Eastern Europe. The development cost can be 2-3 times higher if you choose specialists from the USA, Canada, or Western Europe.

Many processes, such as project management, integration of third-party applications, and design can be priced separately. It also has an impact on the cost of the development. 

Process and Hotel Management Software Development with ImproveIT Solutions

In conclusion, it’s worth saying that building and developing a business is like a puzzle. A successful hotel business requires excellent customer service, attention to details, and a focus on creating a welcoming and hospitable environment for guests. We can help you with one of the pieces of the puzzle – effective software.

ImproveIT Solutions is a software development company based in Ukraine. Our team has brought to life many ideas, including projects such as software for hotels. Therefore, we have relevant experience and expertise in this matter. 

We are working with hospitality projects and have a deep understanding of this industry’s needs.  Our developers constantly create and implement different features for the specific HMSs.  Developing a booking engine, a channel manager, or a reservation system is common practice for us. Check our case studies here.

We will not only help to form a concept with all necessary features according to your business-specific needs but also provide the most cost-effective approach to the development process. Your software will be planned and realized carefully – from a client-oriented intuitive design, and secure data processing, to the possibility of easy scaling according to your growth.

Our solutions enable hospitality businesses of all sizes to enhance their productivity and simplify their operations. Feel free to contact our specialists to discuss your product and get a detailed project analysis and quote.

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HOW-TO

What Is a Dedicated Team Model? Full Guide + Tips

What is a Dedicated Team Model in a nutshell?

A dedicated team is a business model according to which a service company provides software development professionals, who work as a client’s own team extension on a long-term basis. Engineers are hired with specific skills and experience to cover all customer’s needs. The management of a dedicated team and the development process is usually on the client’s side.

Now let’s take a look at some popular questions you might have about hiring a dedicated software development team.

Signs That You Should Hire a Dedicated Team

Early-stage startup

For early-stage startups, time and money are the key factors influencing future success. With the help of dedicated developers, you can build an MVP of your product fast and decrease time to market dramatically. In terms of expenses, it is cheaper to cooperate with a dedicated team provider than hiring and paying salaries to an in-house team of software developers. Also, there is no need to take care of equipment, office supplies, and working space as it is the responsibility of a service provider. 

Specific product domain

If your product is niche-oriented or requires building a complicated system, it is better to hire a dedicated team with relevant domain expertise. So that they can solve complex, industry-specific problems and provide optimized high-quality solutions.

Projects with undefined or changing requirements

Sometimes for a startup it is hard to set a determined scope of work and tasks priority at the discovery stage. As any product idea should go through a validation process to ensure there is a product-market fit, during the customer discovery stage some insights may cause the change of key features. A dedicated team, which is basically your own remote team, provides you with the needed time and resources to make all changes without paying additional costs.

Long-Term Projects

To deliver a complex, lasting product, you need a strong team of developers working with you from the beginning to the end of the project. So that all members are united by a clear vision of a product and have a deep technical understanding. Within a dedicated team model, software developers focus only on your project which means more time on strategic planning and general improvement. And it also allows preserving the product knowledge within one long-term team. On the contrary, with other collaboration models the process can be less productive as developers are usually involved in several projects simultaneously: context switching takes time to get into focus.

What Is the Cost of Hiring a Dedicated Team?

The final cost depends on the team size, level of seniority, and project complexity. For example, the average hourly rate for a software developer in Eastern Europe is $25-45, while in the US you’ll pay as much as $100-150 for the same work done with the same level of competence. The cost is calculated by the formula: members’ salaries + service provider’s fee, which includes administrative overheads such as expenses on renting an office, providing equipment, HR and legal support, paying taxes and bills, etc. In addition, it’s much cheaper and faster to hire a dedicated software development team with the help of a vendor than to search for each professional on your own. 

Where to Find and Hire a Dedicated Team?

To find a reliable software development partner you should go through several steps. We recommend you to start with researching firms on specialized aggregators such as Clutch, GoodFirms, IT Firms etc. You can choose companies based on the minimal project budget they work with, hourly rate, type of services, industry, number of reviews, etc. Then study the reviews of selected companies to get a complete picture of their working process and general customer satisfaction. Study the portfolio to make sure the companies have the needed expertise for your project, also check their management process and data protection measures. And only after that you can move to the final steps such as interviewing and hiring.

Management of a Dedicated Team

With a dedicated team model, there is a possibility for you to decide on how involved in the project management you want to be. A dedicated team is basically your own remote team, so you can fully manage every aspect of the product development process by yourself. Or you can leave it to your service provider and just control the current progress. With the help of time tracking and task management systems, software development became a transparent process.

Dedicated Team Set-Up Process at ImproveIT Solutions

Since 2016 we have set up dedicated development teams in Ukraine for 50+ clients. Here is how we usually start a new dedicated team project:

  1. Evaluation. First of all, we study the needs of your project no matter whether it is new product development or upgrading the existing one. Then we identify your requirements, expectations, and key objectives to match them with the necessary expertise, skill sets, and team structure. 
  1. Team Selection. Once we are aware of the business and technological challenges, we offer you a balanced team structure that will be both productive and cost-effective. Then we shortlist the best candidates and send you the resumes.
  1. Interview & hiring stage. We can provide a developer within a set tech stack in just 1-2 days. If you are looking for another skill set – the whole process takes a couple of weeks, depending on the team size and requirements. 
  1. Onboarding. At this stage, we align the project and business priorities and provide the team with the necessary software and equipment. We create the team’s organizational chart, roadmap, distribute responsibilities, set up all communication and reporting procedures.
  1. Support and advising. Every client has a dedicated account manager as a main point of contact, that takes care of all administrative and organizational matters throughout collaboration. They are in regular communication with customers via video calls and chats, are constantly asking for feedback and areas for improvement during the whole cooperation process to make sure we provide excellent service.

Key Takeaways

All in all, while choosing a reliable service provider you should remember that it’s not enough to hire an expert dedicated development team. Hiring is just the first step. What’s more important is that the provider has well-established internal business processes to make this team productive and work effectively. You can contact us to get and review all our documentation on setting up dedicated teams and internal processes for such type of collaboration.

Categories
BEST PRACTICES

Outsourcing Vs Offshoring: Comparison Guide Between Location-Based Types Of Outsourcing

What Is Outsourcing? A Short Definition

What Is Outsourcing? In simple words, outsourcing means transferring some business process outside of the company to a specialized service provider.

This model became a popular response to the IT market situation when the number of specialists isn’t enough to cover a growing need for their skills. As a result, we see an annual increase of IT engineers’ salaries and software product development costs as well. By outsourcing IT processes, companies benefit from access to the global talent pool and expertise unavailable in-house and can hire skilled specialists at reasonable rates.

Based on the location of a service provider, IT outsourcing is usually divided into three different models: nearshoring, offshoring, and onshoring. Let’s take a look at each of them.

Types Of IT Outsourcing

Nearshoring is the most convenient model of location-based outsourcing. According to it, you hire a company located in a neighboring country (usually in the same time zone or within a couple of hours difference). It allows finding the best cost-quality ratio. You will also benefit from cultural similarities and the same business hours.

Offshoring’s main goal is getting work done in faraway countries where the costs are as low as possible. So it means handing over your product development to a service provider located in a country with an emerging economy, where the cost of living and the salaries of IT specialists are lower. And if you choose your service provider correctly, you will get almost the same quality of services as if it were done in your country. Compared to others, offshoring has more disadvantages, such as time zone differences (from 5 to 12 hours), possible cultural and language barriers, etc. 

Onshoring means transferring software development to a lower-cost location inside the national borders. The main goal of this model is to have maximum proximity, communication without any barriers, and control over the process. Although onshoring is the most expensive model, it still allows some cost optimization. Usually, a service provider is located in a small town and charges less than companies in the metropolitan area. 

Comparison chart of each model

Advantages and disadvantages of Nearshoring, Offshoring, and Onshoring

Besides differences, some key advantages and disadvantages are common for offshoring, nearshoring, and onshoring. There is a popular opinion that the language barrier can potentially cause a few cooperation problems. But due to globalization, the post-covid digital transformation, and the spread of English, the risks of miscommunication and cultural issues seem to perish. Apart from the language itself, there is a potential risk relevant for all models regarding the style of work of a particular vendor, their ability to follow deadlines and communicate effectively.

The common advantage of all models is the strong expertise that clients don’t have in-house. Specialization makes it possible for all outsourcing service providers to gain strong expertise in the service field they provide. To stay competitive, they hire top-notch experts who face multiple challenges working on projects of varying complexity. 

On the other hand, you should note that according to some cooperation models you will hire specialists that work for multiple projects simultaneously. Some vendors don’t fully immerse into your project. That’s a huge challenge, especially if your startup is currently in the discovery stage. But that’s a disadvantage of a particular IT outsourcing company, not of IT outsourcing itself. 

All the above paragraphs refer to common features. Now here is more detailed information on their particular advantages and disadvantages.

Nearshoring 

Advantages:

  • the teams can collaborate and communicate throughout the workday (for example, additional feature development or bug fixing sometimes requires the exchange of information between a service provider and an in-house developer); 
  • geographical closeness makes it possible to organize offline events to increase the effectiveness of teamwork and personal communication;
  • cultural similarity reduces potential issues;
  • tax and financial laws can be similar.

Disadvantages:

  • there is only one main disadvantage compared to other models: it is more expensive than offshoring.

Offshoring

Advantages:

  • due to intense competition, many offshore outsourcing companies create beneficial conditions for their clients and provide complementary services like short-term support, consulting, free QA services, etc; 
  • access to a larger talent pool; 
  • quicker time to market with the ability to work on projects round the clock (e.g. when an Indian team ends a working day, their US colleagues only start working, as if the second shift); 
  • possible tax holidays, financial incentives, and fewer business regulations.

​​Disadvantages:

  • there are chances that your offshore provider follows business and management processes that are very different from yours;
  • sharing information between systems and locations increases the risk of a security breach, data leaks, or loss of data; 
  • some developing countries have not adapted their educational system to modern technological requirements, so you need to double-check the developers’ competence;
  • deadlines and tasks may also be harder to sync due to local national holidays etc. (of course, this can be avoided with proper planning).

Onshoring

Advantages:

  • possibility to meet with your provider and outsourced team offline as often as needed;
  • no need for late-night meetings as you are in the same time zone; 
  • possibility to check a company’s reputation and references on your local market;
  • onshoring guarantees more effective cooperation, because all participants have common cultural and linguistic background;
  • same business approach.

Disadvantages:

  • onshoring is more expensive than nearshoring and much more expensive than offshoring;
  • hiring locally limits the talent pool you access – there may not be enough candidates with needed skills;
  • very fierce battle for talents on the markets of developed countries.

Conclusion

To sum up, we provided you with comprehensive and objective information to help you make the right choice and maximize benefits. Compared to all models, nearshoring works more effectively in our opinion, so we prefer this model of cooperation with customers.

Feel free to contact us and get answers to all your questions about IT outsourcing from our specialists.

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REVIEWS

Vitaliy, CEO And Co-Founder Of ImproveIT Solutions Shares His Plan To Grow The Company Organically: GoodFirms

ImproveIT Solutions is an IT company that provides expert software engineering services and approaches dedicated software development by teams. The company’s portfolio includes software solutions from simple mobile apps to enterprise fintech systems used in 75 countries. Their core focuses are mobile and web SaaS development, mainly for the French, Swiss, Dutch, German, and US markets. The team has managing partners with a combined experience of over 15 years in IT management, creating software products, business scaling, and tech staffing in Ukraine and the EU.

Vitaliy mentions how the company was started with his professional friendship with Taras Chornyi, Co-Founder of ImproveIT Solutions. Working in the industry together, they gathered a profound experience in software development, management, and operations. And from this perspective, they got a solid understanding of how services are rendered at an excellent level. Also, they observed some imperfections in the existing market and wanted to fill this gap and cared to create a company with a different set of values such as transparency and excellence at work.

If the client’s in-house team lacks the expertise, ImproveIT Solutions jumps in to fill the gaps and strategically advises product development and roadmap. The company provides developers and acts as a technical partner who always tries to see the big picture of what they are building. They also provide technical consultation with suggestions and points of improvement. Moreover, the team remains flexible on discussing terms and conditions, engagement model, project sizes, and ability to provide almost any technology present on the market. 

The company has a team of expert professional developers with years of experience developing and designing exclusive tailor-made software solutions for clients worldwide. The group provides services to clients ranging from recently formed startups to a well-established enterprise that needs to upgrade its software according to the changing market needs. Its innovative and engaging software products boost the client’s business rates and quickly resolve their business setbacks.

With vast domain knowledge and expertise, the company satisfies the software development needs of valuable clients. The software solutions developed by the team adhere to specific business problems and are pocket-friendly for small and medium-sized businesses. The experienced team of multi-disciplinary developers leverages the latest trends and technology to provide usable and maintainable solutions. The team at ImproveIT Solutions keeps in mind the client’s requirements and market needs and develops a product that caters to both simultaneously. This encourages the client to select ImproveIT Solutions as its first choice for a development partner. Thus for such noteworthy services provided, the company is ranked among the top software development companies in Ukraine at GoodFirms. 

To provide the end-users an enriching experience, ImproveIT Solutions provides new technologies available in the market that meet the needs of their client and trade simultaneously. They make their client’s online presence grow with their unique, innovative approaches. Their industry-specific web solutions provide a cutting-edge position to their clients to stand out from other competitors in the market. 

A Client reviews the services of the company in web development.

These fantastic web development services from the team are why the company would soon lead among the top web development companies in Ukraine at GoodFirms.

When asked about the company’s future goals, Vitaliy mentions that they don’t plan to grow exponentially but rather organically. The team will continue implementing and adjusting its internal processes for gradual growth and best western business practices. It is more important for them than just growing revenue or headcount. With good strategies and business practices comes success, and with success comes organic growth. So in the next 10 years, they plan to expand widely in the EU and US hi-tech markets and will continue to stay on the verge of the newest and most popular technologies.

Thus, having read the excerpt from Vitaliy’s interview, one can also go through the detailed interview at GoodFirms.

About GoodFirms

Washington, D.C.-based GoodFirms is an innovative B2B Research and Reviews Company that extensively combes the market to find business services agencies amongst many other technology firms that offer the best services to their customers. GoodFirms’ extensive research process ranks the companies, boosts their online reputation, and helps service seekers pick the right technology partner that meets their business needs.

About the Author

Working as a Content Writer at GoodFirms, Anna Stark bridges the gap between service seekers and service providers. Anna’s dominant role is to figure out company achievements and critical attributes and put them into words. She strongly believes in the charm of words and leverages new approaches that work, including new concepts that enhance the firm’s identity.