IT Costs: How to combine cost-effectiveness with IT innovation strategies
In the last few years, fast technological changes have forced companies to reshape different aspects of their businesses to adapt to the new trends and boost their competitive advantages. And, as we have all bear witness, during this year, the Pandemic has only made this need more urgent, demanding new and effective cost optimization strategies that can help companies thrive in the rough tides of an uncertain market.
All of this has brought new interesting challenges when it comes to IT budgeting. CIOs are now used to deal with the demand of reducing IT costs, even when the competitive advantages of a well-outlined IT strategy are well known. The rapid shifts in consumer behavior have only emphasized the importance of flexible business strategies that can take advantage of digital tools.
Luckily, the growing need of leveraging the opportunities offered by the digital economy by keeping up to date with the IT innovation curve -while at the same time keeping businesses’ financial health-, has also brought the acceleration of a few trends in the IT industry that are helping companies reach their goals. New models of IT outsourcing and software partnerships have arisen and are not only more cost-effective but also allow companies access to better resources and, in the end, contribute to the creation of better products.
Outsourcing: Is it possible to access top IT talent at reduced costs?
From reducing usage or service levels to publishing metrics that can encourage your organization for better use of resources; from using open-source software to optimizing hardware costs by making use of containers offered by cloud providers. There are, of course, more than a few strategies for cost optimization that will help you reduce your IT costs. But let’s face it: when it comes to IT cost reductions, the predominant issue is usually labor force costs.
IT outsourcing, with its ups and downs, has historically had such importance in the IT industry. For years now, companies have sought out offshore services that offered them the possibility of supposedly significant cost savings. But experience has shown that outsourcing cannot simply be conceived as a simple math problem, in which cheaper rates offered by offshore partners necessarily mean lower costs in the long term. Travel costs, cultural obstacles, and time-zone differences can end up being the cause of unsatisfactory processes, with delayed deliveries and poor quality. In the end, the strategy of engaging with offshore partners merely for cost-cutting reasons may backfire and ultimately lead to higher costs, less quality, and less overall satisfaction.
This is why, when thinking of cost optimization strategies, the most innovative companies understand that - even amid a global recession caused by a pandemic - it is crucial to find a balance between reasonable budgeting and well-defined strategies for digital transformation that can lead them into a path of growth and success in the upcoming years. A smart and innovative implementation of digital technologies has the potential to fundamentally change a business, promoting a culture of innovation that is key for businesses thriving in a complex and ever-changing environment.
So, if the pandemic crisis hasn’t left you any possibility of spending extra dollars on software development projects or IT services, you shouldn’t have to worry about that. By combining and improving some of its best trends, the outsourcing industry has evolved into more effective models of partnership than “traditional” offshoring, which will allow you to keep accessing top-quality resources without having to give up your cost-saving goals.
Combining outsourcing models: Nearshoring and Staff Augmentation
As the IT industry evolved, it has developed a variety of outsourcing models. Today, companies can choose among a wider range of different rates and different skills, depending on their budget plans and their needs at any given moment. If you are able to find the right outsourcing partner for your company, then you can have both suitable rates and access to the best possible resources. Let’s see some of the models:
- Nearshore IT teams
During the past few months, the rising trend of partnering with nearshore IT teams has accelerated. This kind of outsourcing partnership is becoming increasingly popular in today’s business landscape since it is seen as a model that combines the best of the “traditional” onshoring and offshoring partnerships, allowing organizations access to critical skills at very reasonable rates.
- Staff Augmentation
Another IT strategy that is being growingly used by companies is staff augmentation. It allows companies to temporarily add staff with additional skills to their tech teams while avoiding the liabilities of adding full-time employees for their IT projects, thus benefiting from the flexibility and reduced costs. The advantage of this model is that companies can manage the augmented staff directly on-site, taking advantage of a productive collaboration between their in-house developers and the outsourcing workers.
- Nearshore and Staff Augmentation, blended
While the two previous outsourcing models are cost-effective and ensure top-quality IT development, there’s also the possibility of combining them, according to your company’s possibilities and the rates you are looking for. Some software partners will be able to offer you blended teams, with onsite staff in your office and nearshore developers in their production centers in nearby countries.
Finding a strategic partner to optimize costs and improve your IT strategy
As we have seen, reducing labor force costs while maintaining those strategic IT innovations that your company needs to thrive has become easier as the IT industry evolved. But of course, finding the most suitable outsourcing partner for you is not always an easy task.
During its +24 years of experience in the IT industry, Tonic3 has developed IT solutions for some of the most renowned companies in the world. Having Delivery Centers in Dallas and Buenos Aires allows us to offer companies a variety of different rates and different solutions, according to their specific budgets and business strategies. By partnering with us, you will be able to access blended teams. While our resources located in the USA will be working directly in-house, they will be managing remotely our nearshore team, composed of talented and certified IT professionals.
If you want to learn more about how an outsourcing partnership with Tonic3 could help your cost optimization strategies, we suggest you access here to book a free consultation with one of our executives.