What is the influence of COVID-19 on the outsourcing industry? It has been more than a year since the first case of COVID-19. Every inch of the world has been struggling with the pandemic, which has had a huge influence in many different ways. From business to general industries, formal education and modern medicine.
Like many other industries, the IT outsourcing industry has been greatly affected by a coronavirus. Recovery after the influence of COVID-19 on the outsourcing industry will be slow. But, outsourcing companies should be ready to bounce back as soon as possible after the recovery period. What will happen afterwards? Will outsourcing become more relevant than ever before or not at all?
The general purpose of outsourcing companies is to support businesses by providing relevant expertise. Companies opt to utilize outsourcing for many different reasons. This reasons can vary, but most of the time it is to lower the burden, focus on core business, and save money.
Because outsourcing companies exist to support primary businesses, they are dependent on the general situation of the industry. If primary businesses are not functioning well, that will most probably influence the outsourcing company.
If you are interested in learning about the pros and cons of software development outsourcing, check out this link!
What are the main challenges?
There are many different challenges outsourcing industry has been facing since the coronavirus outbreak. This goes from national and international travel restrictions to inadequate infrastructure and lack of equipment to let employees work from home.
Many outsourcing companies are unable to continue on outsourced projects, and probably still won't be able after the crisis is over. Some companies that still manage to somehow successfully deliver their work, will face a lack of new incoming projects. This can easily get smaller companies out of business.
Many cities and municipalities around the world are under lockdown. Different legislations in different countries allow or not allow people to go to work. Public transports are being shut down, and many employees from smaller companies depend on it.
As mentioned before, working from home has been a struggle for many companies. This is because many of them are unable to provide relevant equipment or quality management. This can greatly affect the continuity in work, and slow down the whole project or business.
Some countries have strict rules about foreigners visiting the country. This is a big deal for outsourcing companies. Most of them are in different countries or even different continents from their primary business. This makes it impossible for the primary company representatives to come to visit and check up on work in person.
These travel restrictions have also lead to staff deficiency. Many people are unable to leave their towns or even houses in some situations. Even though some part of the work can be done remotely, physical presence is of great importance for the quality project outcome.
Work on Hold
Absolutely nobody was well enough prepared for the fast-spreading of coronavirus. Many business owners, clients or employees were struck unexpectedly. This was the reason many projects were suddenly put on hold. In worse case scenarios, after being on hold for too long, many projects were even cancelled. This even leads to closing down of many smaller companies. Many primary companies have even cancelled their orders because they are not getting anything from the market. From money to feedback needed for core business development.
Also, money that was invested by some primary companies only got them a partially finished project. Transferring projects to another team might take a lot of time. And time is money. There is no doubt that lots of money were lost because of the influence of COVID-19 on the outsourcing industry.
Work from home
While occasional remote work proves to be sufficient, being forced to transfer the whole development to employees homes has had its consequences. The quality of work greatly suffered because of unsatisfactory working conditions at home.
The sudden change in the work environment might have taken a lot of time for people to get used to. Some outsourcing companies might have taken more time to gather and provide relevant equipment.
Crowded home-environments and living with many people can be disturbing for focus. It can also be harder for people at home to get into the flow and be as sufficient as they are in office. Also, online communication can be limiting or slow down the communication process. This can also slow down the continuity of work.
Primary client companies are also being faced with troubles whether they are continuing with outsourcing or are just about to start. So, what can a company that wants to integrate outsourcing into their business plan expect during the pandemic?
Outsourcing companies might charge higher prices for their services in order to fully implement project development. Also, with fast-changing legislation and restrictions, timeliness can get messy and delays are to be expected. Some outsourcing companies might even be unable to deliver high-quality projects. Let’s not forget that all communication is happening online, which can for some crucial meetings be ineffective.
Naturally, there is a lot of mutual understanding among companies and business owners around the world. After all, this situation is affecting everyone. If schedules are unexpectedly being changed, or deadlines aren't met, most companies will be flexible and understand. Regular and well-managed communication is important to keep the progress on the best possible track. Being honest and transparent about the project status is crucial for the desired output.
Influence of Covid-19 is still a major concern, and we don’t know for sure for how long will it stay like this. The way our general society will continue to function will affect the businesses of primary client companies. And if these companies do not get enough business, they won’t be able to afford and utilize the outsourcing services. In order for the outsourcing industry to keep on functioning, software development must not stop. It most probably won’t stop, but will definitely slow down.
After the recovery period is done and everything is back on the usual track, there is no doubt that outsourcing companies will come back stronger than ever. The demand will be bigger and there will be more business opportunities.
Despite the influence of COVID-19 on the outsourcing industry, some companies have adapted to the pandemic situation better than others. Addria is one of the companies that have quickly and efficiently turned to remote work. With well-managed communication amongst the staff members and clients, our projects have all been very well continued. The development pace is more or less predictable and the quality of work is on point.
If you have a project idea or need professional advice on software development during the pandemic, our contact page is just one click away! We’ll make sure that your project finds its place in our development team.