Advanced technologies we have these days facilitate the workflow and daily operations for companies in every industry. They also make it possible to simplify the hiring process and give access to a worldwide talent pool.
Not long ago, organizations were limited to their locations, so you could only look for the right employees in your home town. Nowadays, the situation is quite different, and businesses tend to outsource to other cities and countries.
Previously, companies were mainly interested in outsourcing software development within the IT sector, but now it is not limited to this sphere.
What is “outsourcing”?
Outsourcing is a type of agreement in which one company hires a vendor to complete a particular task or project. A vendor provides a company with all the necessary resources, including a skilled team, tech tools, and a project plan.
This article will discuss why companies use software development outsourcing, its pros and cons, and how to make it successful.
Why Do Companies Outsource?
Digital transformation drives industries outside the IT field to develop better software solutions to improve their services and deliver high-quality products. Thus, outsourcing software development becomes more common as businesses turn to third-party vendors to complete in-house projects and provide necessary solutions.
Software outsourcing is a phenomenon that becomes more popular every year due to several reasons:
reduction of costs
resolution of capacity issues
enhancement of service quality
access to the international talent pool
focus on core business needs, etc.
It allows small and medium-sized businesses to access and hire professional teams of developers for lower prices.
Software outsourcing gives a chance to find one expert and the whole team with all the necessary resources and tools to complete your tasks within limited time frames. In this way, your in-house team can solely focus on the company’s core activities.
Why Do Companies Outsource to Other Countries?
Nowadays, it is a common practice to look for outsourcing software development companies overseas. In most cases, companies from developed countries tend to hire experts from developing countries.
What are the reasons for this to happen? Why would developed countries outsource to developing ones?
First and the main reason lies in costs. For instance, in the US, the UK, German, etc., companies are more likely to hire a software outsourcing company from Eastern Europe or India than in their own country.
Companies from developing countries offer their services for lower prices, but their services are of the highest standards.
Apart from this, Eastern Europe and India are famous for their tech education. There are renowned universities that train thousands of students each year and provide top-class education.
What is more, it is required to work continuously without delays and minimum time losses when it comes to business.
Outsourcing software development from other countries in different time zones is a great way to keep your company continually running. Outsourcing offers agility, and projects are more likely to be completed on time.
Why Do Companies Outsource Software Development?
It is impossible to imagine the modern world without software and its solutions. Companies outside the IT industry rarely have in-house development departments, so software development outsourcing is essential for the business to survive the competition and keep up with the modern trends.
Up-to-date software solutions are necessary for companies in the industries like Healthcare, Finance, Logistics, Mobile Development, etc. The software allows improving daily administrative operations and providing efficient services to the final users.
In some cases, even IT companies require to reach out for external support, as they might lack the right staff or tech tools necessary to create a solution or complete the project.
Software Outsourcing: 5 Things You Need to Consider
Before you start working with a software outsourcing company, take into consideration the following things:
Understand the workload: make sure that everyone in your in-house team has enough work, and no employees can take on a new project. It is essential to maintain the team’s spirit within your company, explain why you need additional help and what roles your team will perform during the development process.
Identify the project scope: prioritize tasks, think of the ones you can exclude, or add later in the process.
Outline budget and deadlines: ensure you have a detailed plan and realistic picture of the project’s budget.
Have a list of possible software outsourcing companies: study their portfolios, check previous projects and customers.
Examine vendor’s corporate culture and services
Companies often dismiss these aspects and pay attention only to the percentage of saved costs. Do not forget to consider the highlighted ideas, as they will contribute to your company’s successful cooperation with a vendor.
Outsourcing Software Development Process in 8 Steps
Turing outsourcing into professional cooperation requires some time and effort. There are several questions and issues you should consider beforehand. Here is a list of simple steps to follow:
Determine your needs (staff, resources, goals)
Find target outsourcing location (think whether you will outsource nearshore or offshore)
Choose the vendors and get to know them
Choose the right partner
Select the collaboration model (outsourcing, IT staffing, dedicated team, staff augmentation, R&D center)
Test the employees
Establish good relationships between in-house and outsourced teams
Start working
Software Outsourcing Company: Choosing the Right Company
There are numerous software development outsourcing companies that offer their services, but choosing the right vendor is not straightforward. The abundance of companies doesn't mean that each one of them is capable of completing your tasks. Follow the tips to make sure you are choosing the best possible vendor.
Finding the right vendor starts with knowing your needs and goals. Once you know what you want and need, you may begin the process.
Research vendors: make a shortlist of suitable candidates.
Check their background;
Examine their portfolios and completed projects;
Evaluate vendors' capabilities (tech and staff);
Read previous customers reviews;
Contact the previous customer and ask for additional information about the company.
Contact vendors and communicate with them.
Learn about their companies’ cultures.
Choose a vendor.
Determine Quality Standards.
Review legal/security aspects.
Analyze business (rates, engagement model, value for money, etc.)
It is crucial to take into account all highlighted points to find the right vendor for your project. Pay much attention to the company’s background as it is challenging to control offshore companies, and have a full picture of how the company works.
Create high-end software solutions for your company with Intellectsoft
Every partnership has two sides. Software outsourcing development is not an exception to the rule. We will discuss the most prominent pros and cons of outsourcing software development.
Pros:
Cost reduction
Access to the large talent pool
Flexibility
Reduced time-to-market
Responsibilities delegation
Cons:
Miscommunication
Lack of transparency
Lack of quality and labor control
Advantages of Outsourcing Software Development
Software development outsourcing company brings numerous advantages when you decide to recruit one. One of the most prominent benefits is that you speed up the development process, as you can hire the whole team at once.
There is no need to run dozens of interviews and waste your time on secondary tasks when your in-house team can pay much attention to core business activities.
Another significant advantage is that the global talent-pool opens right in front of you. You can find specialists with the right set of skills and experience to quickly and professionally deal with a project.
In addition to this, service outsourcing means reducing costs that you could spend if hiring individual employees.
Outsourcing also allows you to work on core business activities continuously, as a vendor will pick up on some duties and take responsibility for the project. There will be more flexibility in the development process. It will be easier to scale up the project if necessary and apply the agile method, so there are no delays in development, and you fit the deadlines.
Reasons Why Organizations Outsource Functions
Software outsourcing and other outsourcing types have proven to give many benefits for companies in different industries. There are several reasons why this type of cooperation is popular and becomes more widely used, penetrating various sectors.
Companies continuously face the lack of in-house staff that has specialized skills, knowledge, and experience. Third-party vendors ensure that their development teams suit high standards, are organized, share partner’s values, and set strong business relationships.
Outsourcing software development companies also gives access to the advanced technologies other companies might not possess. It is vital to use the latest technologies and tools to enhance your products and deliver better services to the end-users.
Outsourcing is a quick and effective way to produce new products and services. It is a time-saving model where you spend less time searching for the right candidates and more time on the development process.
Instead of interviewing and hiring staff individually, companies have a chance to employ the whole team at once. In this way, the in-house team stays focused on core business processes, while the external one takes on the other projects.
It follows that every business aspect is maintained correctly, and there are no crucial drawbacks in the company’s development plan.
Another reason for the success of the “outsourcing” phenomenon lies in cost savings. The company reduces costs on HR, as there is no need to interview every team member individually. In addition to this, hiring the whole team is less costly, as vendors have settled prices for their services. It also results in lower taxes.
Last but not least, outsourcing provides access to professionals worldwide. Now you are not limited to one particular location, and it is possible to find a suitable team faster, even if the right team is in another country.
What Are the Industries Where Business Outsource Processes the Most?
We have already mentioned that previously outsourcing was primarily associated with the IT industry, as tech companies were looking for outsourcing software development.
Today, we observe a shift in this way of thinking, as other businesses across all sectors try to improve their service and processes.
For instance, your company specializes in mobile app development. It is your core business activity. If you want to reach more customers, find new ones, etc., you should promote yourself via different social media platforms and know how to use analytical tools to make the best of your advertising campaigns.
Social media marketing is not your core activity, and, quite often, small- and mid-sized companies do not have a separate department specializing in this direction. Thus, you try to outsource a professional team to fill out the missing part.
Another example can be a delivery company. Technologies significantly influence day-to-day operations, and there are constant growth and enhancement in tech tools and solutions. It is hard to keep up with all the changes when you have limited resources, so outsourcing software development can be a suitable option for your company.
The list of tasks the companies commonly outsource these days includes:
HR activities
Marketing activities
Customer support
Administrative work
Mobile/Web app development
Web Design
Manufacturing, etc.
If we talk about industries, the IT sector remains the top contributor to outsourcing industry growth and development. Although, as we can see, it is not limited to this one field anymore.
Companies of different size and specialization tend to outsource the following processes:
IT services
Finance/Accounting
Digital Marketing
HR Activities
Customer Support
No wonder that software IT outsourcing takes up the top position. As technologies develop and enhance, there is a constant need for their upgrading and refining.
Cloud technologies change on-premise systems, a growing number of mobile phone users, the popularity of mobile apps all contribute to the development of the IT sector.
Small- and mid-sized businesses usually tend to outsource specific operations to experts who have all the necessary resources. In this way, companies protect themselves from making incorrect decisions resulting in significant losses or failure.
How to Perform a Successful Outsourcing Operation?
Successful software outsourcing development depends on several aspects that are essential to the process of hiring external resources. The process might seem to be simple in execution, but there are hidden points that you should consider beforehand. It includes:
Knowing Your Goals
A company that clearly defines its outsourcing goals is one step ahead in the competition. Outlined aims of your company will allow you to search for the right partner and make sure the external team suits your expectations.
What is more, you can use the available resources to the full and as effectively as possible.
Defining Budget
Map out the project plan and calculate the required costs while considering your present company needs and possible or unexpected expenditures. Ensure that you choose a reputable vendor for cooperation that has proven to provide transparent services.
A reliable vendor will help you calculate the costs and find the balance between their services’ affordability and the results you want to see when a project is over.
Choosing Outsourcing Model
Define the specialized skills your company needs for the period of the project. It will be easier for your HR and managerial teams to choose the right outsourcing model (onsite, nearshore, or offshore).
A clearly defined model will help you save a lot of time and effort. Thus you will get to the development phase quicker.
Establishing Relationships
Communication is essential when it comes to outsourcing. It is necessary to build stable and friendly relationships with your partners and make sure that you share the same goals and values.
Software development outsourcing brings numerous advantages for the companies that specialize in industries outside the IT sector. Digital transformation is only taking its path, and there is a lot to come in the nearest future.
Successfully performed outsourcing strategy and choosing the right vendor for your company would promote your business services and help you reach the desired results.
Talk to our experts and find out more about the topic and how your business or project can start benefiting from it today!
The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor Customer Service
Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.
Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).
When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!
How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.
Examples of Intellectsoft projects
Property management systems (PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.
Existing Customers First: Building Loyalty with Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.
Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.
More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.
Source: Deloitte
How does technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.
Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."
Leveraging Software to Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.
Upselling via Apps
Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource Management Software
Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.
3. Equip Your Team
Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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