Challenges and Opportunities in IT Outsourcing 


One doesn’t need to look far to find numerous articles discussing many of the advantages of outsourcing as well as some of the challenges. As the focus these days is on outsourcing to a foreign country, let’s peruse one of the biggest challenges in that area: the choice of an appropriate third party company to help manage your project. That can be a rather daunting choice in itself, as it could equate to either success or failure of the project overall.

The majority of companies can benefit from outsourcing, and small to medium-sized ones might get the most from it, as they may not as yet have a local “IT Department” (or may not be planning one at all). In this case, having your team set up in a cost-effective country (say, in Eastern Europe) under the auspices of a reliable partner company (managing things on the ground there) can lead to many more pros than cons.

And of all companies, the start-up product company could gain the most from outsourcing, as they can focus their energies on the product while maintaining IT development utilizing a third party company (and team lead) on the ground in another country. These support services might include most back-office support: from office search to legal advice, HR payroll, accounting or recruiting local talent.

In some countries, such as Ukraine, a company can get premium talent (with close to 200K+ IT professionals) and very advantageous tax benefits (how does 5% labour taxes for IT professionals sound?) while maintaining a team with western sentiments, adequate English skills, and lots of creative tech talent.

When we speak about the challenges of outsourcing, these would first include finding that trusting partner in another country, as well having a clear understanding of security issues as with the wrong partner there could be misunderstandings involving the notion of IP property, and fixing these issues are always more complicated in a foreign country with “foreign” legislation and ethics. Therefore, that chosen partner is essential to both not having to deal with many of those headaches, and giving you the support in almost any area – i.e. contracts, management, recruiting, accounting – and the best partner in this respect is the all-in-one company that can provide all-of-the-above.

To best deal with the above-mentioned, many companies find the most appropriate solution is just opening their own business center in the foreign country; this allows for greater control of office, staff, IP issues, plus the added benefit of developing your “brand” in that other country. In Ukraine, a respected IT support company is the Alcor Group . These folks are already creating huge benefit for well-known international companies who find real advantages in setting up their offshore business in Ukraine – and the Alcor team provides time-tested services that support anything you need while doing business there.

Let’s break down the above information into some concrete step-by-step advice:

  1. Trust Issues – before deciding on outsourcing, meet and discuss all pros & cons with the potential partner you will need to rely on (for assisting you in all areas of  your business abroad);
  2. Possibilities of downtime – make sure the team and systems are reliable for your needs, so downtimes don’t become an issue (after starting up);
  3. Flexibility – be sure the team and partner are flexible regarding your work needs;
  4. Outsourcing vs Offshoring – decide whether it’s better to start with just outsourcing some of the project, or starting up an offshore business center (normally, companies start with the first, then more to the second variant after things are moving smoothly);
  5. IP issues – be sure your partner is clear about your property (this is where the choice of partner is most pertinent).

In a nutshell, it’s always better to research things thoroughly and have multiple meetings with potential partners before deciding what could become the future of your company.


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