How to Optimize Your IT Outsourcing Cost - Intellectsoft Blog

Updated: April 14, 2021

Since 2020, businesses faced the new social distancing reality that is pushing towards investing in remote management tools, excellent delivery services, and other types of software digitalizing and automizing processes.

At the beginning of the Coronavirus pandemic, these intentions were rather chaotic and impulsive as businesses were facing the collapse threat. But steadily, these remote models are evolving in outsourcing strategies, according to BCG forecast.

In 2021, the global trend shows that businesses are searching for more sustainable pricing models and contract terms after an impulsive decision to save what’s left in the previous year.

And the digital market has numerous options to offer to this demand, with different price tags and seniority levels ranging from country to country.

We’re here to describe the specifics of the IT outsourcing cost model in 2021 and provide practical recommendations on how to pick the one working in a long-term perspective and with the real value-for-money.

The Benefits of IT Outsourcing in 2021

Numerous companies refer to an offshore development team with a bucket list of demands. For years, our clients are expecting outsourcing software development to be cheap, of fair quality, and having certain risks. In the circumstances of global lockdown, it promised a new highly important advantage: an ability to digitalize fast.

And this perk outweighed all other advantages in 2020. But in 2021, businesses recalled there are other benefits outsourcing should bring — and have started demanding them back.

In practice, the recent digitalize-to-survive rush has led to the critical number of inaccurate software solutions and outsourcing models on the market.

This year, companies have more time and knowledge and are willing to change the situation and an accurate solution for their digital needs. And here, an ability to calculate the IT outsourcing cost and prevent all the possible risks is the basic skill a business owner should master.

2 Factors that Define IT Outsourcing Costs

For those who have no idea how the IT market works and are cautious of the hidden costs of outsourcing, start by considering the country and the level of expected expertise first.

These two factors will work as a needed lens to choose among the relevant options and pick a good outsourcing pricing model for your company.

Location

Geography plays a determining role in defining the cost of outsourcing. Commonly, the developers from the USA and Western Europe have the highest hourly rates on the IT market, having a reputation of top skilled professionals.

For these locations, the seniority level doesn’t make much difference — Junior specialists are still paid higher than others.

If you’re searching for cheaper options, Ukraine and India are commonly associated with the average cost savings of outsourcing.

At the same time, developers from Eastern Europe in general and Ukraine, in particular, are paid slightly higher and offer a sustainable quality for this money. Latin America is also the market with modest pricing models.

Expertise

Like in any other sphere, knowledge, and skills define the cost of outsourcing. Senior specialists are paid higher than entry-level developers. In practice, the situation is more complex, though.

You may assume on saving money while hiring a mid-level offshore worker, for example. But you can easily end up paying twice more than expected because the project scope appeared to be dynamic and requiring extra skills constantly. And so, it would be cheaper to get a Senior developer right away.

How to Optimize Outsourcing Development Price: 4 Recommendations from Intellectsoft Experts

Even though the benefits of IT outsourcing are convincing in theory, its misguided application may bring unsatisfactory results — like the inability to control the total cost of ownership and achieve the needed quality of service.

To prevent this disappointment from happening, Intellectsoft experts have prepared the top 4 recommendations that will help you get the real value for money while requesting IT outsourcing.

Sign a Detailed Contract

According to the BCG report, the majority of problems in outsourcing success come from intransparent pricing structure, poorly tracked objectives and KPIs, and inadequate contract management.

Basically, all these things should be discussed at the very beginning of your cooperation with the outsourced team. Otherwise, numerous unexpected spendings will increase your overall IT outsourcing cost on the way.

Select the Relevant Seniority Level

Requesting the IT expert or tech talent is not always necessary. Most software-related tasks can be performed by a middle specialist with solid experience in this field. At the same time, the complex digital solutions require top-quality development by one or more IT specialists.

That’s why, for example, you should hire a development team of experienced professionals for building a mobile app from scratch but a sole developer with a lower seniority level for adding a smoothly working delivery in an already existing app. Knowing the needed seniority level will save your outsourcing cost.

Check Both Hard and Soft Skills

Many business owners practice a result-oriented approach. Because of that, they rather think they achieved a mutual understanding with the development team than achieve it actually.

To prevent this from happening, establish the common language with your job applicants: double-check if they get you right and offer relevant options, not only whether they possess the needed skills and experience.

In this context, make sure time zones and different cultural backgrounds won’t be an obstacle for your business communication.

Be Flexible, But Evaluate Strictly

Even if you’ve signed a detailed contract and determined your project needs and limitations correctly, the dynamic world we live in will inevitably call your cooperation to evolve.

Nevertheless, these shifts shouldn’t work as an excuse for getting an inaccurate result. You can agree on changing terms and making slight software adjustments, but your outsourced software-building project should still have a fixed scope, time, and resources. If you hire a team that didn’t create for you the software you’ve ordered, this team failed. It’s objective.

How You Can Hire an Outsourced Team from Intellectsoft

Since we’ve determined how an outsourced price should be calculated and how the team should work, you’ve ready to order this service in a smart way. To save you time and effort on searching, we offer our help in getting professional IT outsourcing.

We work by sticking to all the recommendations mentioned here. Our process starts from discussing the project and determining all the possible risks in advance.

Then, we’ll cooperate by assigning the responsibility areas transparently. In particular, the client stands for a product and the Intellectsoft team takes all the personnel and resource-related tasks. Follow the link to learn more about our dedicated development team service and discover how it can be enhanced with a build-operate-transfer model in IT industry.

With IT outsourcing from Intellectsoft, you will enjoy numerous advantages — including scaling velocity, real-time assessment, experience-proven expertise, and critical onshore resourcing.

If you’re looking for a reliable outsourcing partner for an affordable cost, you came to the right place. Talk to our experts and find the top-matching solution and cost of outsourcing IT services so your business 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

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.

Source: Deloitte

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.
Helpdesk Software: Resolve customer issues optimally.
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.

Tetiana Borysova

Content Writer

What Defines IT Outsourcing Price and How to Optimize Your Costs

The Benefits of IT Outsourcing in 2021