9 Types of IT Projects To Outsource

In the current business environment, there is a growing trend of outsourcing IT support for business processes, application services, and infrastructure solutions to enhance business results. IT outsourcing enables companies to lower expenses, speed up product launches, and tap into expertise and resources that are not available internally.

Gartner’s July 2026 forecast puts worldwide spending on IT services, which it reports separately from infrastructure as a service, at USD 1.57 trillion in 2026, up 5.3% from USD 1.49 trillion in 2025.

It is anticipated that the worldwide IT outsourcing sector will increase in size in 2024, reaching an estimated market worth of USD80.7 billion by 2028.

There is a wide variety of IT projects suitable for outsourcing, and each method has its own benefits. In this piece, we will explore various types of IT projects that are commonly contracted out, enabling you to determine which option suits you the most.

What Is IT Project Outsourcing?

Outsourcing an IT project involves assigning a full software development project to another company. Companies choose an engagement model that fits the project, such as project-based outsourcing, a dedicated team, or staff augmentation. Companies typically opt for a fixed-price model when outsourcing.

This enables businesses to reallocate resources to different areas as the IT project is being managed externally. Outsourcing not only maximizes resource utilization but also frequently results in more effective software solutions. Many companies choose it to gain external expertise and keep internal teams focused on their core business functions.

Benefits of Outsourcing IT Projects

Outsourcing offers numerous benefits, from lower operational costs to more time for core competencies. Below are a few of the key advantages of contracting out IT tasks:

• Businesses can lower capital and labor expenses by outsourcing IT operations instead of handling them internally;
• Having access to specialized knowledge and advanced technology also provides a critical benefit;
• Outsourcing enables companies to concentrate on their main tasks;
• Outsourcing offers the potential for growth and adaptability.

For a balanced look at the trade-offs, read our overview of outsourcing benefits and risks.

IT Project Outsourcing Models

Companies that outsource IT projects usually choose between three outsourcing models: project-based outsourcing, a dedicated team, and staff augmentation. The choice of an IT project outsourcing model mostly depends on how clearly the scope is defined, how much control the company wants over day-to-day work, and whether an internal team already exists.

The project-based model fits work with a well-defined scope and an expected result, such as building a specific product or migrating a system. The vendor takes responsibility for entire projects from start to finish, so the client spends less time on daily management.

A dedicated team is a group of specialists assigned to one client, usually working as remote teams that act as an extension of the company. This setup often fits complex, long-running projects where requirements evolve, because the company directs the outsourced team‘s priorities itself. Jelvix offers this setup as a dedicated team model.

Staff augmentation adds individual specialists to the internal team, which makes it a practical way to close skill gaps or scale resources quickly. It is covered in more detail in the Staff Augmentation section of this article.

IT Project Outsourcing in Various Industries

Finance

Global digitalization significantly affects financial institutions, and they often turn to IT outsourcing solutions. Organizations typically delegate various technological processes, such as software development or infrastructure maintenance and management, to external service providers.

Partners with experience in financial software development can take on this work while the institution focuses on its core business.

Healthcare

The healthcare sector often faces the challenges of implementing the latest technologies. Given its specific nature, the industry frequently needs more internal IT resources. Typically, contracts are concluded to provide CRM portals, EMR and EHR platforms, data warehouses, legacy software upgrades, and telemedicine applications.

Retail

Retail, too, relies heavily on adopting the latest technologies to remain competitive. Predictive analytics enables data-based decision-making, and dedicated ERP and CRM systems improve operational management. IT outsourcing is often used to deliver such advanced features as AI-powered personalization, robotic delivery, and cashless checkouts.

Vendors with retail software development experience can build these features without stretching an internal team.

Manufacturing

The manufacturing industry is no exception to the involvement of IT outsourcing and is increasingly using this approach to improve efficiency and innovation. For example, outsourcing can provide real-time data analytics for better decision-making, improve supply chain management with cloud-based solutions, and increase product quality with the newest manufacturing technologies.

Education

Educational institutions also require advanced IT outsourcing solutions in today’s dynamic environment. Online learning is now a regular part of both education and corporate training, so schools, universities, and employers often look to external teams to build the supporting platforms. Companies are outsourcing the development of solutions for remote educational courses, employee training, and more. The sector can benefit from easy-to-navigate audio and video conferencing and language applications.

IT Project Types To Outsource

 

#1. Staff Augmentation

Staff augmentation is an engagement model that implies the use of external talents temporarily to expand teams and close the existing skill gaps. For example, you may require a few additional people or a specific talent your in-house team needs for your software development project. You might also need to close the gap in your resources quickly but don’t want to spend time on a lengthy recruitment process.

For a longer engagement with a stable group of engineers, a dedicated development team is an alternative worth considering.

The main benefits of staff augmentation outsourcing are:

• When hiring external specialists, the client retains complete control over the team;
• Rapid onboarding is critical in staff augmentation, and specialists usually join the project almost immediately after the client interviews and approves them;
• Staff augmentation often fits short-term needs because the company adds skills for as long as the task lasts, with no long-term hiring commitment.

Here are some examples of successful outsourcing of staff augmentation projects:

1. Google relies on a large external workforce. The New York Times reported in 2019, citing an internal document, that as of March 2019 Google worked with about 121,000 temps and contractors alongside about 102,000 full-time employees. The figures cover many roles, not only IT.
2. Microsoft used a large contract workforce alongside its employees. In 2014, GeekWire reported that the company had more than 70,000 contract workers in 2013 compared with about 100,000 direct employees.
3. In 2009, WhatsApp co-founder Jan Koum worked with a freelance iPhone developer, whom a friend found on the RentACoder marketplace, to build the first version of the app.

#2. Software Development

Software development outsourcing is when you transfer the development and support of software applications (coding, testing, debugging, etc.) to an external company. It gives companies access to technical expertise and advanced technology without building a large in-house engineering department.

The main benefits of software development outsourcing are:

• Outsourcing allows you to bring in specialists for niche technologies or domains;
• Skilled developers can often be found in regions with lower wages and operating costs;
• Projects can be completed faster, bringing your product to market faster.

Here are some examples of successful outsourcing of software development projects:

1. In 2021, Mercedes-Benz extended its contract with Capgemini until 2024 for the development and maintenance of its core Electric/Electronic Product Data Management (EE-PDM) application.
2. In 2018, Verizon signed an agreement with Infosys to take over a large part of its IT operations, with application development and management services in scope.
3. Apple reportedly buys software services from Indian vendors. In 2012, The Register reported that Infosys provides software services to Apple and Wipro tests apps for the company, and a Wipro spokesperson confirmed that Apple is a client.

#3. Web Development

Outsourcing web development is when companies delegate the task of managing web development by hiring an external vendor while retaining control over the project. Vendors assist at all stages, from design development and conceptualization to pre-launch testing and maintenance.

The main benefits of web development outsourcing are:

• Companies reduce training, hiring, operations, and development costs;
• Getting a web product to market quickly can provide a competitive advantage;
• Access to experts with specialized IT knowledge, technology stacks, and experience worldwide;
• The IT market offers many web development companies specializing in full-cycle product development.

Here are some examples of successful outsourcing of web development projects:

1. Target outsourced the e-commerce technology behind Target.com to Amazon in 2001. They also had outsourcing relationships with Toys R Us and Borders.
2. In 2005, Marks & Spencer outsourced its e-commerce infrastructure and online IT to Amazon Services Europe, while keeping control of web branding, content, and customer service.
3. In 2015, Coach relaunched its flagship website, Coach.com, on the Demandware Commerce Cloud platform, with the agency SapientNitro as implementation partner.

#4. Mobile App Development

Mobile application development outsourcing is when external developers or development teams create mobile applications. Businesses can continue to do their core activities and leave the creation of mobile applications to experts.

The main benefits of mobile app development outsourcing are:

• Getting new mobile apps to market just a few weeks or even days earlier can make a big difference due to the rapid changes in the industry;
• Using app development companies opens up opportunities to build flexibility into your projects;
• Available long-term business support in related areas, including market research, marketing, business analytics, and technical maintenance.

Here are some examples of successful outsourcing of mobile app development projects:

1. Uber hired an outside firm, Mob.ly, to rebuild its first app prototype before the App Store launch, according to Ryan Graves in Fortune’s 2015 oral history of the company.
2. When Starbucks trialed mobile payments in its Starbucks Card Mobile app for iPhone, a company spokeswoman said the vendor mFoundry was its primary partner for the launch.
3. Domino’s Pizza in the UK launched a Windows Phone 7 ordering app that was created by the agency Vexed Digital and developed and tested together with Nokia.

#5. Cloud Computing

Outsourcing projects for cloud computing involve third-party vendors who supply and oversee cloud infrastructure, platforms, or software. The goal is to implement the newest technology offered by cloud providers and guarantee secure data management, allowing businesses to concentrate on their main objectives.

Companies that need help with migration or deployment pipelines often add cloud and DevOps consulting to the engagement.

The main benefits of cloud computing outsourcing are:

• Access to cutting-edge cloud technologies;
• Vast storage capacities offered by cloud service providers;
• Backup options for potential live production data problems;
• Decrease in expenses related to infrastructure.

Here are some examples of successful outsourcing of cloud computing projects:

1. Netflix completed the migration of its streaming service to Amazon Web Services in January 2016 after a project that began in 2008, and shut down the last data center used by the streaming service.
2. Pinterest has used Amazon Web Services since 2010, and in June 2026 it signed a US$4 billion cloud agreement with AWS that runs through 2031.
3. In 2016, General Electric and Microsoft announced that GE’s Predix platform for the industrial internet would be available on Microsoft Azure. In 2018, GE said it would also migrate a wide range of IT workloads to Azure.

#6. Maintenance and Support

These projects require the hiring of external service providers to handle maintenance and support duties. A third-party supplier takes on the responsibility of organizing, arranging, and carrying out maintenance tasks.

Providers usually combine routine upkeep with technical support services such as incident handling and user assistance.

The main benefits of maintenance and support outsourcing are:

• Outsourcing maintenance and support provides the ability to control costs in a flexible manner;
• Organizations now have access to maintenance strategic expertise they were previously missing;
• Assigning different everyday duties like overseeing stock, contacting vendors, and doing regular upkeep and fixes.

Here are some examples of successful outsourcing of support and maintenance projects:

1. In 2016, British Airways signed a contract with Tata Consultancy Services for some of its IT activities, with end-user computing among the functions moving to the supplier.
2. In 2014, HCL Technologies was reported to have won an infrastructure management services contract from PepsiCo, and HCL confirmed it was working with the company.
3. Vodafone Idea extended its IT partnership with Tata Consultancy Services for five more years, with TCS managing its customer-facing applications.

#7. Cybersecurity

Cybersecurity outsourcing occurs when a company collaborates with a security service provider to manage different cybersecurity tasks. These aspects include risk evaluation, vulnerability testing, monitoring for threats, responding to incidents, and creating security strategies. The scope of IT outsourcing services can differ based on the provider and the unique requirements of the organization.

The main benefits of cybersecurity outsourcing are:

• Access to advanced expertise and up-to-date cybersecurity technologies;
• Outsourcing cybersecurity offers a more cost-effective solution;
• Outsourced services typically provide the ability to adjust scale according to the cybersecurity changing requirements.

Here are some examples of successful outsourcing of cybersecurity projects:

1. After the November 2014 cyberattack on its network, Sony Pictures Entertainment hired the Mandiant incident response unit of FireEye to help clean up and restore its systems.
2. After discovering its 2017 data breach, Equifax engaged the cybersecurity firm Mandiant on August 2, 2017, to run a forensic investigation of the incident.
3. Colonial Pipeline hired Mandiant in May 2021 to investigate and respond to the ransomware attack that shut down its pipeline.

#8. IT Consulting

In IT consulting outsourcing, a third-party firm provides IT consulting services, including guidance on IT technologies, cost reduction, efficiency enhancements, automation, enterprise-level systems, and IT audits.

The main benefits of IT consulting outsourcing are:

• Reducing costs through the removal of in-house resources and infrastructure;
• Accessing a diverse group of IT consultants with unique expertise from around the world;
• Businesses can prioritize their main operations as specialists manage intricate IT difficulties.

Here are some examples of successful outsourcing of IT consulting projects:

1. Andersen Consulting, later renamed Accenture, and Microsoft formed Avanade in April 2000 as a joint venture that provides consulting and technology services on the Microsoft platform.
2. In 2016, Welsh Water outsourced most of its IT estate management and its ICT services to Infosys under a contract of up to 10 years.
3. When Shell moved its IT infrastructure and telecom services to AT&T, T-Systems, and EDS in 2008, the sourcing advisory firm TPI advised it on the program.

#9. Data Analytics and Business Intelligence

This form of outsourcing entails enlisting external specialists to handle data analysis and business intelligence assignments. This frequently involves analyzing extensive datasets, extracting valuable information, and producing reports to assist companies in making educated choices.

Teams that need to work with large datasets often look at big data and analytics expertise first.

The main benefits of data analytics and business intelligence outsourcing are:

• Significant cost savings are achieved by eliminating the requirement for internal data analysts and tools;
• Accessing advanced skills and technology for enhanced decision-making;
• Expanding analytical capabilities without being limited by a lack of internal resources.

Here are some examples of successful outsourcing of data analytics and business intelligence projects:

1. Siemens signed a five-year outsourcing deal with Accenture to run and maintain several of its data analytics and business intelligence services, and transferred its team of professionals to Accenture.
2. In 2011, Capgemini was selected as one of two vendors supporting Telekom Deutschland, under a five-year business intelligence framework agreement.
3. In 2023, Genpact opened a delivery center in Sofia as part of a multi-year agreement with Coca-Cola HBC to provide data-led insights for its finance operations.

Outsourcing IT Projects in Various Stages

Outsourcing IT projects is a complex and multistage process. Here are the main stages of outsourced software development:

 

Initial project planning and feasibility studies: This stage is about defining the project’s scope, objectives, and requirements. Feasibility studies are conducted to assess the outsourcing project’s viability and potential risks. A project manager usually owns the plan and keeps the client and the vendor aligned from the start.

Development and implementation: Once planning is complete, the actual development begins. This phase includes coding, integrating systems, and implementing the designed solutions. Phased implementation helps control risk and keeps delivery speed steady.

Testing and quality assurance: After development, the software undergoes testing to identify and fix bugs. Quality assurance ensures that the product meets all specified requirements and functions correctly. Software testing usually runs in parallel with development so that defects surface early.

Project closure: The project closes with a formal sign-off on deliverables, followed by the handover of source code and documentation to the client. A clear handover helps the client’s team take over the product without depending on the vendor.

Post-deployment support and maintenance: Once the software is deployed, ongoing support and maintenance are provided to address any issues, make updates, and ensure the system remains efficient and effective.

How To Choose an Outsourcing Partner for IT Projects

Outsourcing partner choosing starts with the business goals of the project. Then compare each outsourcing company on experience, client references, technical expertise, and data security.

This checklist helps shortlist vendors:

• Clear business goals set up front
• Proven track record and client references
• Access to specialized expertise in the required area
• Industry experience and knowledge of industry best practices
• Data security and compliance
• Engagement model and transparent communication

For software development outsourcing, read our guide on how to choose an outsourcing software development company.

Unlock business growth with the right IT partner, optimize operations, enhance scalability, and stay ahead in the digital era.

What Should Be Practiced for Best Outsourcing?

Below, we outline several key strategies for effective outsourcing of IT projects based on industry best practices:

 

#1. Set Clear Goals

Clear goals can help any IT project. It is vital to set out and communicate to the project team clear key performance indicators and measurable objectives.

#2. Track Progress

Once you set your goals, track your progress regularly, whether it’s every two weeks, every month, or every quarter. Communicating the outcomes against the set objectives creates a feedback loop that involves everyone.

#3. Perform Regular Check-ins

Check in with your outsourced IT team. Whether you hold regular one-on-ones or team meetings, encourage active listening by ensuring everyone can voice concerns and ideas. With regular updates and check-ins, you and the external IT team can review progress, discuss issues, and plan the next steps.

When the vendor works as one of several remote teams, agree on overlapping hours so check-ins are not delayed by time zones.

#4. Streamline Communication

Place one person in charge of the communication process to ensure messages are clear. In some cases, disputes or challenges may arise.  A project manager on the vendor side is often the natural single point of contact, and the internal team should have a counterpart who works with them daily. In some cases, disputes or challenges may arise.

This is why you need escalation and dispute management processes in place. After every meeting or stand-up, write everything down, email your team, and ask if any questions or areas need clarification.

#5. Simplify the Tasks You Send

By sending a massive project document to your outsourced IT team, the likely result is confusion. They may need help determining which aspect is a high priority, or you may have yet to consider language barriers, meaning the complexity will likely cause a greater misinterpretation. Break up tasks and make them smaller and more manageable.

#6. Learn from Past Experiences

IT project success is often achieved when we avoid repeating past mistakes. Use communication channels and protocols to invite your team to analyze what worked well and what didn’t regarding communication and the specific project outcomes. Knowledge sharing is essential, and by carrying out post-project reviews, you’ll have the chance to share experiences and learnings.

Learn how to create a software requirements specification document to bring financial and tech goals together.

Conclusion

In summary, IT project outsourcing offers numerous advantages, such as cost reduction, access to specialized expertise, and the ability to focus on core business activities. Various industries are using IT outsourcing to improve operations and remain competitive in a rapidly evolving digital environment. Understanding the specifics of possible types of outsourcing is important for the effective implementation of such projects.

If you are considering strategic development and need professionals to assess your company’s outsourcing needs, contact our experts.