ID 
EN Understanding the components and IT outsource cost is a critical first step in planning a budget that’s both effective and efficient. With various cost elements ranging from workforce to software licenses, companies can achieve up to 30% budget savings compared to building an in-house IT team.
In this article, we’ll break down the key cost components, pricing factors, cost-benefit comparisons, and practical strategies to maximize ROI from IT outsourcing services.
Key Components of IT Outsource Cost
The total IT outsource cost depends on several core elements. Let’s explore what typically makes up these expenses:
1. Labor Costs
Labor is usually the largest portion of outsourcing expenses. It includes monthly salaries or hourly rates per developer. In Indonesia, for example:
- Back-end Developers: IDR 6,000,000 – 9,000,000/month
- Mobile App Developers: Around IDR 6,000,000/month
- Senior Developers: Can command IDR 25,000,000 – 35,000,000/month, depending on skills and experience
2. Software Licensing
Enterprise software licenses can be significant. A standard ERP license may cost around IDR 15 million per month, while a full-featured enterprise suite can run into hundreds of millions of rupiah annually.
3. Infrastructure & Hosting
Infrastructure costs include either cloud hosting (starting around USD 38.54/month or IDR 600,000) or on-premise infrastructure, which requires upfront hardware investments and ongoing maintenance—amounting to tens of millions of rupiah annually per server.
4. Management Overhead
Overhead includes project coordination, reporting, and administrative efforts, typically adding 10–20% on top of direct labor and tech costs. This ensures service quality and prevents hidden charges.
Read Also: How Much Does It Cost to Build Android and iOS Apps?
Factors That Influence IT Outsource Cost
Beyond the main components, several variables can affect IT outsource cost:
- Project Scale & Complexity – Short-term projects (1–3 months) may have higher hourly rates due to initial setup costs, while long-term projects (6+ months) benefit from economies of scale.
- Team Location – Onshore teams in major cities often cost more than nearshore or offshore teams.
- Skill Level Required – Specialized expertise (e.g., AI, DevOps, data science) can cost 2–3x more than general development.
- Contract Duration – Long-term contracts typically receive lower rates.
- Local Regulations – Taxes, labor benefits, and social security (e.g., BPJS in Indonesia) impact workforce-related costs.
Strategies to Optimize Your IT Outsource Cost
While outsourcing can be a significant investment, the right strategies can help reduce costs and maximize ROI:
- Contract Negotiation – Negotiate lower rates based on contract duration or bulk hours.
- Hybrid Onshore–Nearshore Model – Use local staff for coordination and offshore teams for production to cut costs without sacrificing control.
- Shared Manpower Resources – Share developers across multiple projects for cost-efficient resource allocation.
- KPI-Based Cost Monitoring – Set cost-per-deliverable metrics and conduct monthly budget reviews to detect and fix overruns early.
IT Outsourcing Cost Comparison Table (Estimated Monthly)
| Service Type | Small-Scale Project | Mid-Scale Project | Large-Scale Project |
| Web Development | IDR 8–12 million | IDR 12–20 million | IDR 20–30 million |
| Mobile App Development | IDR 10–15 million | IDR 15–25 million | IDR 25–35 million |
| DevOps & CI/CD | IDR 12–18 million | IDR 18–28 million | IDR 28–40 million |
| QA & Testing | IDR 6–10 million | IDR 10–15 million | IDR 15–25 million |
| UI/UX Design | IDR 7–12 million | IDR 12–18 million | IDR 18–30 million |
Note: Rates may vary depending on vendor experience, location, and technology stack.
Read Also: How Much Does It Cost to Build an ERP Application For a Company?
Optimize Your IT Budget with GeekGarden’s Outsourcing Solutions!
As you’ve seen, the cost of IT outsourcing involves more than just salaries—it includes software licenses, infrastructure, and management overhead. Strategic planning is essential to keep budgets under control while still achieving high-quality outcomes.
By understanding these cost drivers and implementing proven optimization strategies, your business can maximize return on investment and run a more cost-effective and scalable IT operation.
Looking to streamline your IT budget with a reliable outsourcing solution? Contact GeekGarden today for a free consultation and get a customized cost estimate tailored to your business needs!
