Software Development Outsourcing Hub

Which companies can use outsourcing, and who should not?

October 20, 2023

The sky’s the limit when it comes to software outsourcing benefits. From top talent to cost savings, outsourcing has unlimited potential for your business. 

But is it the right choice for you?

Overall, some companies and industries are better suited to maximize outsourcing. To verify if outsourcing fits your IT goals, we’ll undergo an in-depth review of the best use cases. Specifically, we’ll delve into types of companies that can use software outsourcing.

Industries That Benefit From Software Outsourcing

(Source: 2023 ManPower Group Report)

Any industry facing complex IT needs can reap the benefits of outsourcing. The industries that rely most on software outsourcing include:

  • Communication services (79%)
  • Energy & utilities (79%)
  • Health care & life sciences (78%)
  • Information technology (78%)
  • Consumer goods & services (77%)
  • Industrials & materials (77%)
  • Transport, logistics & automotive (76%)
  • Financials & real estate (73%)

Top Industries for Software Outsourcing

Outsourcing is well-suited to diverse business verticals. That said, a few industries stand out above the rest. Here we’ve profiled the most popular industries for outsourcing. 

1. Finance

Finance and banking is the #1 most in-demand industry for outsourcing today. Finance solutions can be tricky to get right, as they must meet banking and data regulations. Plus, cybersecurity must be airtight to avoid personal data breaches.

Outsourcing is ideal for creating innovative, modern fintech solutions. Typical products include banking apps, trading sites, digital loans, chatbots and so on.

2. Healthcare 

Healthcare is another in-demand industry for software outsourcing. In this sector, experts deliver advanced technologies that facilitate complex medicine interventions. 

As we saw during COVID, digital health initiatives are critical to saving lives. Hospitals and clinics can more effectively help patients with top technologies on hand.

Through outsourcing, organizations can access telemedicine, patient portals, clinical apps, AI-powered health, etc.

3. Entertainment Media

Entertainment media is a fast-growing area that requires innovation. As companies move from print to digital, there's a huge demand for tech solutions.

Popular products include news sites/apps, streaming platforms, podcasts, ebooks and more. Outsourcing is great for effectively meeting these large-scale transformations.

In addition, this industry relies on new trends such as AI and machine learning. These technologies tailor content based on users' preferences, past browsing and more. 

4. Education

Online education or edtech is also rapidly innovating via outsourcing. Edtech platforms require robust features such as:

  • Uploading video lectures
  • Creating quizzes/exams
  • Setting up student assignments
  • Tracking grades

Edtech became especially vital during COVID to facilitate student learning from a distance. Today, they’re still a large part of learning initiatives worldwide. In addition to edtech, outsourced experts can help build mobile apps, chatbots, etc.

5. Retail 

Retail depends on cutting-edge trends to give companies a competitive edge. This extends not just to e-commerce sites and apps, but also a wealth of other areas such as:

  • Contactless payments and digital wallets
  • Personalized customer journeys across all channels
  • Virtual “try-on” technology to imagine new furniture or clothes
  • AI-powered ads tailored to every customer’s behaviors
  • Chatbots and voice shopping assistants
  • Automating online inventory management
  • Forecasting demand for on-time manufacturing, marketing and delivery

As you can see, retail modernization involves both customer-facing and operational IT areas. Outsourced experts are on the frontlines of launching these streamlined, personalized retail systems.

6. Logistics and Transport

Logistics and transport have become essential with the rise of online shopping. What’s more, customers demand faster delivery than ever, requiring more efficient software.

Today, companies have to create industry-leading systems that optimize:

  • Supply chain management
  • IoT
  • Smart transportation
  • Delivery tracking
  • Customer communications
  • Advanced analytics 

Outsourcing satisfies these aims through seasoned experts who know how to overhaul systems.

7. Government

Governmental organizations worldwide also require top software solutions to fulfill community needs.

Through an app, website or chatbot, governments can make life easier on constituents. With these solutions, they can access key info and take care of paperwork (such as business permits, parking tickets, etc.).

In addition, public messaging systems are especially important to implement. Whether for an emergency or simply to market an event, these systems should always work. 

At the same time, these solutions must have top security against cyber-attacks. This is where outsourced experts can truly shine. Outsourcing lets governments build high-quality solutions that also protect user data.

8. IT Sector

Finally, software outsourcing is crucial as the IT sector continues to innovate. With it, tech companies can utilize outsourcing to expand their teams or hand off tasks to a partner (check out other proven outsourcing strategies in our comprehensive guide).

Even big names such as Google, Slack and WhatsApp use outsourcing to meet demands. This is especially true when businesses require specialized, high-demand skills.

While outsourcing is a powerful option for these sectors, you can use it no matter your industry. The key is to find a partner with deep knowledge of your sector and business objectives.

Types of Companies That Can Use Software Outsourcing

The types of companies that can use software outsourcing effectively vary widely. Here we’ll analyze the ideal company profiles and business cases for outsourcing. 

Companies of Diverse Sizes

Size doesn’t matter when it comes to software outsourcing. Companies of diverse sizes can leverage it, including:

  • Small businesses
  • Startups
  • Government organizations or non-profits
  • Mid-to-large enterprises
  • Global corporations

Software outsourcing can be tailored to your project scope and company resources. This makes it easy to adapt outsourcing according to your needs. In fact, 92% of G2000 businesses and 90% of small businesses utilize it today. 

Companies With Resource Restrictions

Outsourcing is a best-case scenario for companies looking to maximize their resources. That’s why businesses who face restrictions or require efficiency tend to outsource. For example, you’ll likely lean towards outsourcing if:

  • Your IT demands vary widely from project-to-project. 
  • You don’t have initial capital to create an in-house team.
  • You’re struggling to capture the specialized developers you require. 
  • You have limited know-how in building up an internal team. 
  • You need the flexibility to scale the project up/down. 
  • You’re interested in using some extent of outsourcing to generate efficiencies. (Whether via team expansion, special projects, R&D center, etc.)

In these cases, you can benefit from outsourcing's top flexibility and cost-efficiency.

Companies With Innovation-Based Projects

(Source: Deloitte’s 2022 Global Outsourcing Survey)

It’s also worth noting that outsourcing is well-suited to certain software projects. Companies building innovative solutions, such as digital transformation, can benefit most from outsourcing. 

Outsourcing is a best-fit for state-of-the-art solutions. Ultimately, it lets you access top specialists well-versed in new outsourcing trends and technologies.

These experts are also 100% dedicated to your project, instead of bogged down by other tasks. For this reason, outsourcing works well for projects that prioritize next-gen technology. 

In addition to software and app development, companies trust outsourcing for:

  • Cybersecurity (81%)
  • Next-gen tech (78%)
  • Data and analytics (75%)

Digital transformation efforts are especially well-served by outsourcing. Often, these projects require industry-best innovation to create modern, future-proof solutions.

Which Companies Won’t Benefit From Software Outsourcing?

Of course, there are certain cases where it doesn't make sense to use software outsourcing. After all, outsourcing isn’t the only option for your business. Depending on your needs, creating an internal IT team may be a better use of your resources. 

For example, your company may not benefit from software outsourcing when:

  • You have stable, long-term IT needs best met by an in-house team. 
  • You have the initial capital to hire a full in-house team.
  • You’re keen on keeping 100% control of your product (for QA or IP). 
  • You’re interested in building software as an in-house core competence.
  • You’re able to attract top IT talent and have a robust recruitment process to do so. 
  • You’re not in a rush to get a rapid time-to-market or scale up an in-house team.
  • You’re in the early stages of research and still unsure of product direction.

If you’re still in doubt between in-house development vs. outsourcing, check out our in-depth guide for more info.

Kick Off Your Company’s Outsourcing Needs With Netcorp

Software outsourcing is ideal for a variety of industries, companies and project types. We’ve detailed the best use cases here, so that you can decide whether outsourcing is right for you.

At Netcorp, we work with all types of companies that can use software outsourcing. Our experts build high-caliber products that align with your ambitious business aims. Get in touch with our team to learn how we fulfill your vision no matter your industry.

Paavo Pauklin
Executive Board Member

Paavo Pauklin is a renowned consultant and thought leader in software development outsourcing with a decade of experience. Authoring dozens of insightful blog posts and the guidebook "How to Succeed with Software Development Outsourcing," he is a frequent speaker at industry conferences. Paavo hosts two influential video podcasts: “Everybody needs developers” and “Tech explained to managers in 3 minutes.” Through his extensive training sessions with organizations such as the Finnish Association of Software Companies and Estonian IT Companies Association, he's helped numerous businesses strategize, train internal teams, and find dependable outsourcing partners. His expertise offers a reliable compass for anyone navigating the world of software outsourcing.

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