The marketplace has become global and this has made outsourcing something companies look at in order to scale their own businesses. Outsourcing used to be considered extremely risky, but with companies like Your Virtual CTO leading the charge, this is no longer the case.
It is true that the global outsourcing market has gone through some extremely serious changes. This has happened in large part due to technological advances. In addition, companies like Your Virtual CTO stepping up to manage these remote teams has helped immensely. It doesn't matter whether it is outsourcing business processes, research and development, or software development, this industry has been booming for over 25 years.
Businesses wanting to manage costs use nearshoring and offshoring. This business model also helps companies access very skilled professionals who are not locally available. This helps businesses gain a competitive advantage while mitigating risks. Scaleability is another consideration, and this
Some well-known companies wouldn’t be here today without outsourcing. As this topic continues to be on the minds of project managers and CTOs, let’s explore some success stories.
1. Procter & Gamble (P&G)
It should be clear by now that outsourcing isn’t just limited to bootstrapped startups, it can also be the perfect solution for giant product companies like P&G.
Product companies are continually faced with needing to perform in a quickly morphing marketplace. To maintain a competitive advantage, you have to be the first to come out with a new product.
P&G had managed everything in-house for many decades. One day they decided to outsource some of the research and development tasks to accelerate innonvation.
They were extremely pleased with the outcome. Innovation and productivity increased by as much as 60%. The revenue they generated from the new products (almost 400 new products) exceeded $10 billion. As of this day, P&G has half of its innovation coming from collaborating with outsourcing partners around the world.
When you think of outsourcing, you think of outsourcing to countries like India or China from the U.S. or Western Europe. But, that’s not always the case!
The multinational e-commerce, retail, Internet, Artificial Intelligence (AI), and technology conglomerate Alibaba used outsourcing of development to the US. This is because the skills and experience required to build the world’s largest online marketplace were scarce in China but available in North America.
This approach allowed them to innovate even when there were government restrictions and stiff competition from eBay. This type of success story shows how having access to superior talent located anywhere int he world can lead to success.
3. Rainkine Thomson Limited (RTL)
RTL is a leading custom telematics company. They provide sophisticated logistics management tools to enhance commercial fleet safety and efficiency. For the last two decades, they have been working with leading truck manufacturers to include advanced tracking, monnitoring and reporting to overcome logistic challenges.
RTL is based in the UK and Australia. They outsourced to the Ukraine to supplement their staffing needs, sustain their growth, and scale to meet their ever evolving needs. They were able to achieve their goals by
Dmitrijs Jurins, Technical Director at RTL, tell us “within a month, we had a fully functioning team to work on our products, and we were able to release new functionalities to our customers. We’ve received positive feedback on the work we’ve released, and we’re now able to more successfully support our mobile platform…”
Prior to being purchased by Facebook, WhatsApp was a very small company with just 5 part-time employees and 30 full-time employees. Most of the development work was done in Russia with outsourced developers. This enabled them to keep costs lower.
As the company scaled, some of the developers moved to their headquarters in California. This approach enabled this app to get off the ground with very litttle money.
When Slack started, it was just an internal team collaboration tool used by a very small team. As they began thinking about releasing their tool to the world, they hired MetaLab to rework their logo, website and app.
As a result, they earned $221 million last year and had over $900 million in cash. They currently have over 3 million paying customers with 8 million users overall.
These five success stories show you that outsourcing works. When you include professional management from a place like Your Virtual CTO, your success rate skyrockets.