Examples of Outsourcing

Outsourcing is becoming more necessary for businesses, but many organizations don’t fully understand when to outsource or why.

In this article, we’ll discuss some examples of outsourcing projects and products that demonstrate some of the reasons companies of all shapes and sizes choose to outsource and why it’s a good strategic move.

Who Uses Outsourcing?

Before we dig in, let’s talk about who uses outsourcing. While the outsourcing market has evolved considerably in recent years, there are still some misconceptions about what kinds of companies send work overseas and why.

It’s not just big corporations trying to find the cheapest labor—it’s brand new startups, SMBs, tech companies, enterprises—in every industry–trying to achieve a wide range of business goals.

In these next few sections, we’ll go over some examples of outsourcing from real companies, including some we’ve worked with in the past.

Scaling or Expansion

Outsourcing is a cost-effective tool for scaling a business or expanding into new markets.

Last year, Dealerware, a fleet management company, hired us to help them expand into international markets, starting with Canada, then moving into Europe. The goal was to internationalize the SaaS application, offering support for multiple languages, currencies, and country-specific regulatory requirements.

One of the biggest challenges was hitting multiple deadlines without sacrificing quality. We paired the client with senior engineers with experience internationalizing applications who worked alongside the in-house team, allowing them to get more done in less time.

Outsourcing also allows startups to access the talent they need to launch and scale a business, stretching limited funds further.

A more famous example comes from Slack. Back in 2012, founder Stewart Butterfield had an idea but didn’t have the experience or resources to make that vision a reality. Butterfield worked with an outsourcing firm to build prototypes, design the mobile and web apps, and create Slack’s branding, allowing the workplace chat startup to get to market fast and start scaling the business.

In other cases, companies may partner with outsourcing firms to help them achieve long-term goals.

For example, we’ve worked with Tripwire, a well-established company that offers cybersecurity and compliance solutions. We’ve been involved with several projects and function more like an extension of their in-house team than an external contractor.

Tiempo’s teams have helped Tripwire build and test new features and implement best practices for quality testing and coding standards. The client acquired a third-party app, which is now sustained by Tiempo pros. Additionally, we provide ongoing testing and support across Tripwire’s suite of products.

This collaboration is an example of how organizations can partner with an outsourcing company and work together to build on an existing product and reach new markets.

It’s worth noting that part of the reason we’ve been able to get great results is that Tripwire and Tiempo work in the same time zone. Pre-pandemic, the client visited developers in person on a weekly basis. That closeness is key as the client offers technical solutions and requires constant collaboration and communication.

If you’re a startup outsourcing prototypes, you likely won’t need that level of involvement from your outsourcing provider and can save some cash by shipping work offshore.

App Modernization

App modernization involves updating legacy applications to create new business value. It’s also a complex process that many organizations aren’t prepared to navigate on their own.

One of the best software outsourcing examples involving app modernization comes from a collaboration with a steel fabrication firm. The client enlisted our help to rebuild its legacy applications from scratch to better meet end-user needs and help internal staff manage data, contracts, costs, and communications from one central hub.

Cloud Migration

The cloud migration market has been on the rise for several years at this point, though demand has surged post-COVID with brands forced to move their business operations online.

In one past project, we worked with a large steel producer to modernize a legacy application and move to the cloud. The client had been in business for over four decades and needed to modernize a legacy application responsible for managing manufacturing operations across seven facilities. The plan was to move the application to the cloud and add new functionality that would enhance manufacturing processes and create a single source of truth for managing daily operations.

The company anticipated that it would take two years to complete its cloud migration. When they contacted an IT staffing firm, they were told the project would take about five years. In this case, we helped the client streamline the development process, manage the program, and augment the in-house team with experienced developers.

Ultimately, the client may have been able to outsource cloud migration to the staffing firm, but the time-to-value would have been much too slow.

The lesson here is, you’ll want to make sure that you choose an outsourcing partner prepared to navigate the complexities of cloud migration—from both a technical and cultural standpoint.

Augment the Team

Many companies use outsourcing as a way to extend their existing team.

They may need more hands on deck to perform daily tasks and hit deadlines on-time. Maybe they need to build out their team to tackle a major project, or they may be unable to find local talent with the right skills.

E-learning provider CBT Nuggets hired Tiempo to help grow their team. The company was having a difficult time finding and recruiting experienced software engineers with the skills and cultural values they were looking for. In this instance, CBT Nuggets was able to find the right talent for the job. We matched the company with a team of experienced engineers who worked closely with the in-house team, helping them organize and manage SCRUM teams and adopt Agile best practices.

We helped the client fill talent gaps within the organization and were able to use our experience to help the entire team improve existing processes and get better results.

While there are plenty of software outsourcing examples that demonstrate the value of bringing internal and external teams together, it’s not necessarily easy to get it right. In one recent report, researchers found that organizations that outsource parts of the development and delivery process are more likely to be “low performers” than those with a more cohesive DevOps strategy.

Organizations might also extend their teams by looking toward outsourcing partners for on-demand talent.

For example, GitHub uses outsourcing to gain access to specialized skills on an as-needed basis. The company may not need a robotics expert or someone with extensive experience building AR applications long-term and it doesn’t make sense to hire a new employee every time there’s a need for a specific skill.

Focus on Core Business

Another reason companies might outsource work to external developers is that it allows their internal staff to focus on activities that actively create value for the business.

That might mean outsourcing specific functions or repetitive tasks that external developers can work on with minimal input from in-house talent. Alternatively, it might mean tapping outside developers to work on experimental projects or those requiring specialized skills.

Microsoft, for example, outsources tasks that fall outside of the scope or expertise of their internal teams. The tech giant keeps its core business activities in-house, but uses outsourcing partners to help develop new solutions that may become part of the “core business” down the line. Essentially, it’s a cost effective research and development tool that allows the company to test new ideas before going all in—investing in new hires and the tools they need on the job.

Basecamp offers another approach, using outsourcing partners as a way to keep the in-house team small without overwhelming them with work.

The idea there is, the internal team can stay focused on activities that grow the business, while external partners focus on building new features and updating the existing product.

Wrap Up

While these examples of outsourcing only represent a small sample size, they demonstrate the near-endless ways that a company might approach their outsourcing strategy depending on what they’re trying to achieve.

We’ve gone over some of the projects we’ve worked on in the past, from cloud migrations and internationalizing apps to extending teams and modernizing legacy systems. To learn more about how Tiempo experts can support your unique business goals, contact us today.