Statistics of IT Outsourcing Companies in Dubai, UAE – How to Hire? [Complete Guide For Entrepreneurs]
Overview
One of the key aspects of running a successful business reputation management is to concentrate on the quality of the SMO services that you provide. Once you have established your own business and have ensured that its growth is taking place by leaps and bounds, you will find the need to outsource in order to keep up the quality of services along with timely delivery.
Outsourcing work through companies and agencies is a very common concept in Dubai, UAE. And if you too are looking to find IT outsourcing companies in Dubai, but don’t know where to start, do not worry. Here are a few tips that will ensure you hire one of the best outsourcing companies in Dubai.
What Is IT Outsourcing
In the simplest of words, IT outsourcing can be defined as the process in which a service provider, which is not a part of your business reputation management, is hired in order to complete and provide the IT functions that are required by your own business. The category of tasks handed to these service providers vary, greatly and includes a number of key tasks such as managing the IT infrastructure of the company, directing strategy, and even operating the desk services of your business.
If the number of tasks to be outsourced is large, or you do not trust a single company to perform all these tasks efficiently, you may hire more than one service provider, each delivering a different service for you that you think they provide the best.
World Wide IT-outsourcing Services Market Revenue Statistics forecasting till 2027 (in billion U.S. Dollars)
Source: GrandViewResearch Explaining Business IT outsourcing market
Types Of IT Outsourcing
IT outsourcing may sound simple, but it is slightly more complex than that. You may think all service providers are the same, and all IT outsourcing is the same, but you’d be wrong in thinking so. IT outsourcing can be divided into five types, which are as follows.
1. Offshore Outsourcing
Sometimes, the service providers that you hire are not in the same locality as you. They may not even be in the same countries as you. Outsourcing where the work is handed to international service providers is known as offshore outsourcing. Countries like India, China, and the Philippines are most commonly involved in this type of outsourcing. The greatest advantage of this type is that it not only offers political stability but allows lower costs along with tax saving.
2. Nearshore Outsourcing
This type of outsourcing can be considered similar to the first type. Nearshore outsourcing software development also involves hiring service providers that are not int the same country, but they aren’t as far as the offshore outsourcing type. In fact, in this type, the company is usually located in a country that shares borders with your own company. Since the distance is not as much, the travel, as well as the branding communication company between the companies, becomes considerably easier.
Cost Comparison/Statistics Of Nearshore Outsourcing Destinations Compared To Offshore and Onshore (IT Roles)
3.Onshore/Domestic Outsourcing
As the name implies, this type of outsourcing is when the company that you hire functions in the same country as you. Since they are in the same country, they can provide their services to you remotely, from their own location, or on-site, where your business reputation management is.
4. Cloud Computing
If the service provider that you hire , provides you with all the IT services that you need over the internet, then it constitutes a different type of IT outsourcing that can be said implementation of outsourcing with in the cloud computing IAAS, PAAS, SAAS can be implemented in this Cloud computing outsourcing.
Statistics Source: As per Medium Usage of the Cloud is like outsourcing a company’s IT services
Statistics Source : According to survey conducted by Deloitte
5. Managed Service
Managed services is a type of IT outsourcing that involves only a certain set of services that are associated with management functions. The type of services provided by these service providers includes IP telephony, messaging, VPNs, firewalls, and other monitoring and reporting services.
Statistics Source: ESO Analysis on Technical Services Managed in Outsourcing
How Does IT Outsourcing Work In Software Development Industry?
If you are new to the world of outsourcing, you may still be wondering if IT outsourcing even works, especially in the software development industry. The answer to your question is yes, it absolutely works. And if you’re wondering how and why it would work for your business reputation management, here is everything that you need to know.
In order to understand how this outsourcing of tasks really works, you need to think of the involved companies in a very simplified manner. Consider a man that makes toys for kids. Making toys is a very strenuous task, and it takes up all of his time, energy, and efforts. Since he is so busy making toys, he can’t deal with all the other aspects of selling the toys. In order to complete all the other tasks, he hires a group of people to finish up the leftover tasks for him. But instead of paying each person, he pays the entire group a specified amount for a specified time, according to work required.
According to Clutch businesses most commonly outsource finance and accounting (37%), as well as IT services (37%)
No, the man making toys is actually a whole software development industry. A number of tasks are being accomplished here. But the time and human resources are all occupied in accomplishing these tasks, and the industry need helps with its IT functions, which in the above-mentioned scenario where the leftover tasks for the toy-maker.
The group of people that he hired were the Top IT Outsourcing Companies in UAE consist of greatly skilled individuals who have been dealing with IT functions for a very long time. They are hired whenever a project needs IT management, and they provide their services at a specific rate, regardless of the number of people that are involved.
The functioning of IT outsourcing in the software development industry may seem complex and confusing, but it really isn’t.
Why Are There So Many It Outsourcing Companies In UAE?
IF you have been in search of the best IT outsourcing companies for your business reputation management in UAE, one of your first observations would have been that there are plenty of IT and BPO outsourcing companies in Dubai, as well as all over UAE. But the question is, why? It is obvious that the high number of these IT outsourcing companies indicates a demand for them nationwide, but why is that so? Here is an overlook on the topic.
According to a survey report of Deloitte, mentioned key points are highlighted to increase the need for outsourcing.
The trend of IT outsourcing companies has only recently risen in UAE. But as time is passing by, these companies have been reaping bigger successes. There are a number of factors that have led to a steady rise.
Governmental Backbone
One of the greatest reasons that IT outsourcing services companies have been on a constant rise in UAE is because of their strong governmental backbone. The political and legal environment plays a very significant role in any business reputation management. If these do not play in your favor, your business may not be able to progress at all. Luckily, the government of the UAE provides a great amount of support for such outsourcing companies. As per zawya UAE’s outsourcing sector to hit $6.8bln by 2023 ,support of government provides them with a backbone that they can rely on for better growth and functioning of their industry. The requirements set by the government of UAE are such the there is a very small number of formalities that need to be completed in order for these companies to obtain concession and tax waivers. Such policies and support are what make UAE an outsourcing hub where the largest IT outsourcing companies can be found.
Sufficient Labor
Setting up an IT outsourcing company requires the availability of employees. UAE presents with simple and easier visa policies, as compared to other countries of the world. This is why a huge number of foreign nationals move to UAE in hopes of finding an earning there.
Such companies provide these people with the job they need. The availability of this large amount of employees is what makes such a great number of IT outsourcing companies in UAE possible, even when a single company itself requires a great number of workers.
Since the labor is available easily and excessively, hiring them becomes a lot cheaper for the companies as well. Hiring employees for an IT outsourcing company may not be as cheap in other countries.
Plenty Of International Investment
The government of the UAE is extremely supportive of its working class. This support creates an environment that is conducive to economic growth. And in turn, great economic growth brings about a huge amount of international businesses to find a place in the UAE. When international businesses that function on large scales establish in the area, they need large scale IT services that they outsource to these companies. Since there is a greater demand for these outsourcing companies by the constantly rising international businesses, the number of IT outsourcing companies in the UAE keeps increasing.
Benefits Of Outsourcing The IT Functions?
Now that we understand that large amounts of companies tend to outsource their IT functions, it is easier to understand that they do so because they gain a considerable amount of advantage from it. But what are these advantages? What are the benefits that a company can gain by outsourcing its IT functions?
If this is what you are wondering as well, then your questions are about to be answered.
Cost And Time Savings
The number one reason that IT outsourcing absolutely thrives is that it provides a great opportunity for a business to save great costs. It not only cut back the costs that you would need to invest in yourself but also significantly decrease the workload. The hired help that you make use of in IT outsourcing will probably cost you about 70% of what it would cost you to hire employees in-house. You wouldn’t need to invest in any sort of equipment either, helping you save great money.
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But money isn’t the only thing that you save. By using IT outsourcing services, you save yourself a great amount of time as well. These service providers are dedicated to specific tasks and work on a clock that allows them to provide you with the timely delivery of services. Such fast and efficient services wouldn’t be possible with the help of in-house employees. So when outsourcing, you are consequently increasing your competitiveness significantly.
Experience
If you hire employees to accomplish tasks that these service providers do, you may not get the same level of experience. In-house employees are usually not as experienced as these companies that have been functional for a great number of years, providing a very specific set of services that allows them to greatly polish and excel in their skill.
The level of expertise offered by these service providers may never be matched by your in-house employees.
Flexibility And Feasibility
The best part about IT outsourcing is that it provides you with great flexibility and feasibility for your own company. You don’t need to take into consideration the number of employees that will be needed to accomplish the task, nor do you need to bother with the time consuming and painstaking process of recruiting and hiring employees and then training them, or scaling them for the project to project changes in the labor size required. You just pick a service provider, and they get the job done for you.
According to research gaining flexibility and innovation is vital part. Theoretical Foundation Behind Outsourcing Flexibility Maneuvers says
Such flexibility and feasibility are not available with hiring in-house employees.
Disadvantages Of Outsourcing IT Or Software Development Functions
We have covered a number of advantages that website development company can gain from outsourcing their IT or software development functions. Taking a look at these, it may seem like it is the ideal and sensible thing to do. But let’s not forget that anything that comes with advantages has its own sets of disadvantages too. And outsourcing is no exception to that. There are a few risks and cons that are associated with outsourcing IT or software development functions. Some of them are listed below.
Time zones
While working with outsourcing companies, a lot of times, the companies being dealt with are offshore. This creates a significant difference in the time zones between the two companies. This difference in time zones can prove to be very problematic.
Meanwhile, it’s broad daylight for one; it’s still past midnight for the other. Communicating in such conditions can be very difficult. If one company needs to contact the other, there may be chances they are not available since its past working hours.
Furthermore, miscommunications are just as likely to happen in such cases as well. When setting the deadline, the difference in time may make the exact deadline unclear. It takes a lot of effort to overcome this gap when working with offshore companies.
Communication Gap
This is another disadvantage that is mainly associated with working with offshore IT outsourcing companies. Since the employees of the company are from a different part of the world, they probably speak a different language altogether. The language one is fluent at; the other knows only a few words of. This language difference may create a huge communication gap.
via GIPHY
When an IT outsourcing company is hired, it is very important to clarify the role and tasks that are expected of them. With such a language gap between the two companies, communications, no matter how important, may become a huge issue where one says something and the other understands something entirely different.
Security Risks
When you hire employees at your own company and hand over tasks to them, you invite no significant risks to the security of your systems. The employees working on them have been hired by you, and you have complete knowledge of who has access to what. If there were to be any breach in security, pinning down the culprit would not be an issue at all. But that is only when you hire in-house employees.
When you outsource IT and software development functions, you hand over a very crucial part of your business to an external company. This poses great risks to the security of the systems. The individuals that have access to your system are miles away from you, and you have no idea about who can access what, nor do you have any control over it. This makes your systems highly vulnerable to data theft, and you will never be able to tell who did it.
Industries Using IT Outsourcing In UAE The Most?
As mentioned earlier, IT outsourcing is extremely common in the UAE. This ensures that there is more than one industry involved in hiring such services such as PPC , Reputation Management and so on.. Here are some of the industries that are most commonly known for hiring IT outsourcing companies in the UAE.
Source: Deloitte’s Global Outsourcing Survey
Software Development
Software development outsourcing companies in Dubai, UAE are more common than any other sort of outsourcing companies. Their increased demand has led to the establishment of new outsourcing software companies in Dubai by the day. Any time you search for outsourcing companies for software development functions in UAE, you will find plenty of results.
Source:Daxx
Business Intelligence And Analytics
While in other countries, business intelligence and analytics is thought to be an integral part of the business, UAE has found it to be a service to be provided by IT outsourcing companies. A number of companies offer such services to businesses that can’t afford to hire business analytics professionals.
Cloud Infrastructure Implementation:
Cloud computing is very beneficial to implement and it is a very commonly outsourced task, not just in UAE, but all over the world. Businesses hire IT outsourcing companies that provide them with a number of IT services over the internet that the company itself cannot manage.
Digital Marketing:
Digital marketing, in the present world, is very important for any business. In a world that has digitalized to a huge extent, it is very important for any business to have an online presence that promotes their business. Companies in UAE are known to hire IT outsourcing companies that provide digital marketing services in order to help them establish a positive online presence that they can benefit from.
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Negative Consequence Of Outsourcing IT Functions
Outsourcing IT functions may allow companies to save time and money, but there is a lot at stake too. Other than the discussed disadvantages of outsourcing IT functions, there are certain negative consequences that the industry faces due to this practice.
Restriction Of Skills:
There are a number of skills that you may possess, but only at a beginner level. One can only gain expertise in such skills when they practice them and learn more about them, but IT outsourcing has highly restricted this honing of skills. How? Let us give you a quick walkthrough.
As we discussed the advantages of outsourcing IT functions, it became evident why companies would want to outsource IT functions rather than hire employees for the job.
Since students know majoring in such fields would not bring better job opportunities for them, they avoid majoring in high-tech studies. Therefore, only the existing talent is left that is capable of completing the job efficiently.
Compromised Customer Satisfaction:
When a task is performed by a company itself, they have complete control of the end result. The services and products hence provided are up to the mark set by the company standards. If the company wants to raise the standard, they have complete control over producing better results when all their tasks are being accomplished by them.
Source: Neil Patel
But when these same tasks are outsourced to another company, they no longer possess that control. The quality of service or product may then drop or elevate depending upon the services provided by the IT outsourcing company. This would make the company be inconsistent in its delivery of services or products, eventually reducing customer satisfaction.
Diminished Loyalty Of Employees:
While working at a company, an employee is aware of the role he plays in the company and understands the services that the company needs him to provide for it. Knowing that the company needs him, creates a sense of loyalty amongst the employees. This pushes them to work harder and provide the company with the best of their services, But when these same employees become aware of the fact that they can easily be replaced and their job be outsourced to another company, this sense of loyalty no longer remains. The employees no longer put in the same effort, and their productivity is considerably diminished as well. The result is a fall in the quality of services provided by the employee as well as the company overall.
Irrational Labs Explained reasons to consider which drives employee loyalty.
Alternatives For IT Outsourcing?
We have now established that while IT outsourcing may have some advantages, it also has a number of disadvantages and a great number of long-term consequences. While a lot of companies outsource just to save time and money, others do so because they need to. Given that every company has a reason to outsource work, what are some alternatives that can be adopted for these companies?
Let’s discuss some.
Hiring Students:
For companies that find IT outsourcing to be a method of saving costs, hiring students is the perfect alternative. Students or even fresh graduates can be hired at cheaper wages. What makes these individuals ideal for the job is that:
- They have great technical knowledge in the field
- They are new and need a consistent cash
- They are also eager to learn and work
It is only a matter of time till they polish all their skills and come on par with the professional IT workers.
Hiring Members Of Family:
If you didn’t afford to pay even students, an efficient way would be to hire a family member that comes from a technical background. Since paying a family member would bring the amount back to your own house, it would prove to be a great way of saving costs.
Hire One Professional:
If you cannot afford to hire a group of workers and can’t compromise the quality of work being done, then hiring a single professional would be a better alternative.
You wouldn’t have to pay the price to hire a whole team, but you will also get top quality services from the individual you hire. Win-win.
Final Thoughts:
Outsourcing of IT functions is nothing new. It has been the go-to option for a number of website development company for a great number of years and still is. In UAE, it is an industry that is thriving and is at its best.
There are a number of advantages that can be gained from the process, but also a number of disadvantages that a company might face. Given the steady rise in the outsourcing of IT functions, it is important that it be balanced out by the adoption of some alternatives in order to avoid the long-term impacts of it.
Some Tips to Consider:
- Research the outsource Market.
- Exercise due diligence. Avoid Cheapest Bidding.
- Understand your team. Talk to former clients.
- Tech-savvy person should be on your side.
- Hire a Product Owner.
- Make sure to complete the requirements.
- Demanding Transparency and accountability is important.
- Work out a communication Plan.
- Sign a non-disclosure agreement.
- Aim for long term partnership.
FAQs For IT Sourcing
Outsourcing of IT functions in the UAE is a very vast topic with multiple aspects. Despite the above discussion, there are chances you may still have some questions regarding it. In order to help you out, we have answered some of the most frequently asked questions by other users.
Recruiters, who focus on IT outsourcing?
Since the number of IT outsourcing companies is steadily rising, so is the need to hire workers for these companies. There are a great number of recruiting firms that focus on workers for such outsourcing companies. But the firms for different companies are different. Depending upon which part of the world you live in, there are likely to be different firms that recruit employees for these firms. Another important aspect that is considered s the nature of the outsourced task. You need to be qualified sufficiently in a relevant field to be hired by these recruiting firms.
How much does it cost to create a basic app using outsourcing?
The cost that is to be paid to outsourcing web and mobile application development agency in Dubai usually depends upon the company being hired and the type of outsourcing android app developer. Some well-known companies usually charge greater rates, even for very simple tasks. At the same time, there are others, ones that are just starting out that provide great services at very cheap rates.
Apps can be very deceiving. Sometimes a very basic mobile application development can be of very complex background and cost over $250. While a seeming complex app could be very simple to develop and cost as low as $75.
When outsourcing IT development, who is on the project steering committee?
The steering committee is formed with the objective of defining the KPIs and objectives of the project. This is an intermittent part of creating a collaborative framework for all of the teams to work together. Since it is a vital decision-making body of the project, it consists of the key leaders on the project. You will find on this team a list of top managers along with decision-makers that provide strategic directions as well as a number of stakeholders on the project.
How does outsourcing works in IT solutions?
Outsourcing in IT solutions usually works the same way that it does in any other industry. A company hires an IT outsourcing service for a certain project. The web design and development companies agrees to provide their services for the project at a set rate. Regardless of the number of employees involved in the process of the task being completed, the company has to pay only the agreed amount for the specific project. Once the required services have been provided by the external service provider, the agreement between the two parties comes to an end. The same service provided may be hired again for another project, or if the service was not satisfactory, another service provider might be hired for their services in IT solutions.
Which of the following is a risk of outsourcing IT functions?
Outsourcing IT tasks comes with a lot of risks. The most imminent risk is that of data theft. Since outsourcing IT functions require you to allow third party access to your systems, there is a great risk of your data being stolen. Furthermore, it may also reduce the overall quality of the service or product that you provide and reduce customer satisfaction.
