The COVID-19 pandemic has led to a massive uptake in remote work. According to Gartner, 32% of professionals in knowledge-intensive jobs worldwide (i.e. engineers) will be working remotely by the end of 2021, compared to 17% in 2019. Remote workers will likely represent 52% of the United States’ workforce by the end of 2022.
The situation is no different in Europe. According to a recent study published by Whitelane Research on IT outsourcing in the Netherlands, 80% of Dutch companies will continue to outsource tech talent in the coming years and 48% plan to outsource even more—one of the highest rates in Europe.
Thanks to an increasing number of successful outsourcing case studies, (i.e. Pricena, Widget Brain, Slack, Skype, Studytube, WhatsApp, TransferWise, etc.) business owners are starting to consider how remote work and outsourcing can benefit their business.
65% of successful companies include outsourcers in their delivery model.
As of March 2020, 16 million U.S. workers started working remotely. According to Gartner, nearly 74% CFOs have planned to shift at least 5% of previously on-site employees to permanently remote positions after the quarantine.
Dutch companies stated in the Whitelane survey that they outsourced tech talent in 2021 to save costs (67%) but also because it offers more flexibility for team scalability (19%). It’s clear that remote work and outsourcing are viable options to keep their companies growing during any crisis.
What are some outsourcing examples? Besides tech workers, many businesses are also outsourcing their HR, accounting, and payroll departments to keep businesses lean and hyper functional.
Considering the global tech talent shortage, outsourcing is becoming an even more desirable option for businesses, as it solves a number of problems ranging from cutting software development costs to the challenge of finding the needed specialists.
The 2018 Deloitte Global Outsourcing Survey Presentation
IT Outsourcing Examples of Companies Built by Remote Teams
Pricena, StudyTube, Slack, WhatsApp, WidgetBrain, Citigroup, Klout, TransferWise, TenderApp, Oktopost, etc. are just some IT outsourcing examples of world-famous companies. To learn how companies grow their businesses and outrun competitors on the global market via cooperating with remote teams, we examined 10 IT outsourcing case studies:
Offshore Mobile Developers Helped Pricena’s Android App Reach 50,000+ Downloads on Google Play
Since its launch in 2013, Pricena has been offering its users accurate price information for electronic devices and home appliances across stores in the United Arab Emirates.
This cooperation proved to be successful — in November 2015, Pricena was recognized as the Online Startup of the Year when their Android App reached over 50,000 downloads and 4.3 stars on Google Play. Check the full Pricena’s IT Outsourcing Case Study.
How CuriosityStream Reached Great Success via Hiring Remote Senior Developers
CuriosityStream is a global independent media company and video-on-demand streaming service.
Before trying outsourcing themselves CuriosityStream had witnessed many companies gain benefits from outsourcing.
So they decided to give it a try. In 2019, CuriosityStream hired a team of 6 programmers, who helped them develop the video feature to increase the number of hours watched. Outsourcing software development also helped CuriosityStream cut costs.
Andre Silva, CTO at CuriosityStream: “Outsourcing is great value for a business, as hiring remotely makes it easier to scale. The main advice – try to figure out a way to integrate the offshore team with the on-site one. It can be challenging, but the return on investment is definitely worth it.” Read the full IT Outsourcing Case Study.
StudyTube Hires Remote Software Engineers in Ukraine
An online education platform, StudyTube, also relies on nearshore programmers. Based in the Netherlands, the startup initially leaned on part-time engineers.
However, the company soon realized that the approach was not best suited to building a solid product. For this reason, StudyTube decided to source its required engineering talent nearshore.
As a result, the company hired Ukrainian developers.
The startup has already secured 3 rounds of investment totalling €1,500,000 and continues to scale. Read the full StudyTube’s IT Outsourcing Case Study.
How Nearshore Outsourcing Helped Slack Reach $7.1 Billion
Slack is one of the far-famed tools that owes its success to outsourcing, as the company hired a Canadian design team MetaLab to help them develop the beta version into a successful product.
By outsourcing website or logo design, web and mobile applications, the company raised a $250 million investment for a total valuation of $5 billion in July 2017. Their latest valuation in August 2018 showed that Slack stands at $7.1 billion.
Slack’s story is deservedly one of the best IT outsourcing examples. By relying on MetaLab, Slack team was able to receive valuable feedback, which helped them create a tool that reached 15,000 users within 2 weeks of launching.
In May 2018, the number of users reached 8+ million with large companies like IBM, BBC, and Oracle utilizing Slack in their daily activities.
WidgetBrain Shares Their Experience of Working with Remote Developers
Widget Brain is a Netherlands-based startup that helps you automate the workforce and maintenance scheduling to save time, maximise employee happiness, improve business performance and compliance.
3 years ago they tried outsourcing and hired 5 developers in Dnipro, Ukraine.
Thanks to this cooperation, Widget Brain was recognised as one of hottest startups in the Netherlands by Techleap.nl.
Check out the Outsourcing Case Study:
Oktopost, Top Ranked Social Media and Content Marketing Software, Hires Nearshore Developers
Oktopost, a social media management platform, was launched in 2013. They operated in 3 countries and had 22 employees –14 in Israel, 3 in Ukraine, and 5 in the U.S.
In 2018, Oktopost hired software developers through Daxx that helped Oktopost extend their roadmap and add flexibility to their business – something they couldn’t have done without recruiting remote talent.
The key advantage of creating a development hub remotely is the increase of the available talent pool.
Liad Guez, Oktopost Co-Founder and VP Product: “I can certainly say that offshore development helped us extend our roadmap and develop the things we weren’t able to develop earlier.” Read the full Outsourcing Case Study.
WhatsApp Hires Offshore Software Developers in Russia
With barely any starting capital (the seed round was $250,000), WhatsApp needed to keep operation costs down.
To build and launch the product, the company turned to Eastern Europe in an attempt to source the required tech talent.
WhatsApp hired offshore developers from Russia because “there are excellent engineers there,” according to the company's Co-Founder, Jan Koum.
Most of the in-house employees were focused on customer support and operations, while development was handled offshore. Though WhatsApp initially had contracted most of its engineering staff offshore, it relocated some of the contractors to the USA later on.
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Citigroup Cuts a Quarter of 11,000 IT-Related Positions to Move Them Offshore
Citi has been outsourcing its tech operations since 1992. The company runs multiple offshore locations across India, the Philippines, and Poland. \
Moreover, in 2012 Citigroup reportedly cut 11,000 jobs at its HQ, at least a quarter of which were IT-related positions. Most of their IT operations are now carried out offshore.
Alongside their so-called “centers of excellence” (offshore development centers run by Citigroup), the company has ongoing relationships with a number of outsourcing companies, including TATA Consultancy Services and Wipro.
Other banking giants that have moved tech skills offshore are Bank of America, Barclays, Goldman Sachs, and J.P. Morgan.
Klout’s Founder Moves to Singapore to Hire Offshore Development Team for the Product
Klout is a startup that has benefited greatly from offshore development. To bring his idea to life, Joe Fernandez, the startup’s founder, went to Singapore and hired a custom made development team there.
He stayed there for 4 months, working closely with his developers to build a beta version of the product.
The first version of the product was funded by Joe himself, his friends, and family (seed funding was just $200,000). Yet, in just under 4 years, the company had attracted a colossal $40 million in funding, and later was sold to Lithium Technologies for $200 million in 2014.
TransferWise Relies on a Ukrainian Dispersed Development Team
According to TransferWise, a global money transfer service, they don’t “do offshoring, outsourcing or use consultants”. However, the company admits having a number of “independent workers”, who form an integral part of the core engineering team.
The company’s dispersed development team is located across Estonia and Ukraine. The company has been particularly active in hiring Ukrainian developers from the Lviv region in the western part of the country.
Meanwhile, some of the developers who worked with the company in its early days are now relocating to join the core TransferWise team in Estonia.
Marek Unt, Head of PR at TransferWise has often stated the value of Ukrainian technicians for their “quick technical wit and engineering education”.
11. The Dutch startup Vive’s Success Story With A Remote Team Of Ukrainian Developers
Vive is an app for professionals and freelancers who want to become financially healthy, providing a tailored investment strategy for each user.
The people behind the Netherlands-based startup stated that it was difficult to find talented developers locally, as many are picked up by large companies and offered salaries that a startup simply cannot compete with.
However their search for top tech talent changed for the better when they started to work with a remote team of Ukrainian developers.
Rogier Roukens, the CTO of Vive, stated that he was impressed not only by Ukrainian developers’ level of education, experience, and English, but also their investment in the project’s success. “We have the same goals, which creates a special team feeling and I think our Ukrainian developers are a really important part of that.”
Daxx Will Help You Gain Positive Outsourcing Experience
At Daxx, you will be the one responsible for your software development project, working directly with a dedicated team of talented software engineers.
- Describe your needs and staffing requirements - it's up to you to start by hiring one developer or an entire team.
- Interview, hire and manage your software developers by using tools and methods you prefer.
- The team starts working under your command, while our retention program will minimize turnover and keep your team happy.
- Focus on the development process while we handle taxes, payroll, office management, HR, etc.