IT outsourcing is a rapidly growing sector of the industry and a valuable solution for a variety of businesses. Both large corporations and young startups benefit from the advantages of outsourcing. This approach can help you save money or gain a competitive advantage. Furthermore, according to a Deloitte survey, COVID-19 has dispelled the notion that physical co-location of resources is required to develop a trusting relationship in the workplace.
All of this suggests that the pendulum will begin to shift in favor of outsourcing.
So, here’s your comprehensive IT outsourcing guide to help you understand what it is and why you need it.
What Exactly Is IT Outsourcing?
IT outsourcing is the business practice of hiring outside companies to handle information technology functions such as software development, infrastructure solutions, and software support.
Access to better skills, a good price-to-quality ratio, and the ease of scaling are all popular reasons for outsourcing. Companies also frequently outsource data storage because hiring a third party is less expensive than purchasing and maintaining their own data storage devices and facilities.
5 Significant Advantages of Outsourced IT Support Services
Outsourcing IT support services is a fairly common practice among most businesses.
It provides lower costs, better access to skilled talent, greater flexibility, and even responsive customer service.
Let’s take a closer look at these key advantages of IT outsourcing:
In most cases, an outsourcing model would be far more cost-effective for a company.
Here are two major reasons:
Any outsourced resource requires little to no capital investment. You can, for example, avoid the upfront costs of servers and other IT infrastructure, such as a data center.
You can save money on labor costs that would otherwise be incurred during the recruitment and training process.
Furthermore, skilled human resources from developing countries can be hired for a fraction of the average cost. For example, you can find a high-quality offshore developer in India for much less than hiring someone in New York.
However, before hiring an offshore software development service provider, make sure to look into their track record and reviews for quality assurance.
2. Availability of a Global Talent Pool
Typically, when hiring locally, you are limited to talent in your specific region.
However, when you outsource a project to an IT service provider remotely, you can find and hire the best talent from all over the world.
This is especially useful when a specific service level or skill set is in short supply in your area.
3. Capability to provide service 24 hours a day, seven days a week
Your clients and customers may not all be in the same time zone as you. As a result, it’s common to receive IT queries or tickets outside of normal business hours.
So, how do you respond quickly to their emails, IT support tickets, or chat inquiries?
Outsourcing allows your service provider to provide you with a dedicated team that is available around the clock. You won’t have to worry about hiring talent from all over the world because the service provider will handle it for you.
This way, your IT support can be available 24 hours a day, seven days a week!
4. Increased Flexibility
Many small and medium-sized businesses do not require a specific IT service all year.
For example, if you own a restaurant, you may require the services of a web developer in the near future to build and launch your website. Then, every now and then, you might need a professional to take a quick look to ensure everything is running smoothly.
In this case, hiring a web developer as a full-time or even part-time employee makes no sense.
A good outsourcing strategy allows you to hire and pay for services only when they are required. This can save you a lot of money and increase your company’s profitability.
5. Enhances Business Focus
Because the IT industry is constantly improving with new frameworks and emerging technology solutions, every IT department must be dynamic.
Normally, you’d have to worry about upgrading your current IT team’s skills or, worse, stressing out about these changes yourself!
Not only is this ineffective because most small business owners aren’t IT experts, but it will also divert time and resources away from critical business processes.
What is the solution?
Allow outsourced IT professionals to handle it while you concentrate on your core competency to gain a competitive advantage.
5 Different Types of IT Outsourcing
Here’s a quick rundown of the five main types of IT outsourcing services:
1. Offshore Outsourcing
Offshore outsourcing entails offshoring your IT functions to a company or freelancer in another country in order to save money.
Because the costs of living (and salaries) are lower in these countries, you end up paying much less than you would if you hired someone from your home country.
However, lower labor costs do not always imply lower work quality, as popular outsourcing countries frequently have a plethora of talent specializing in outsourcing activities.
2. Outsourcing Nearshore
When you outsource IT-related work to a company in a neighboring country, this is known as nearshore outsourcing. The idea is that it will make traveling and communicating easier if any clarifications are required.
For example, if you are based in the United States, nearshore outsourcing would be outsourcing to Mexico.
3. Domestic or Onshore Outsourcing
This refers to an arrangement for outsourcing within your own country, either remotely or on-site.
It’s an excellent way to avoid communication problems caused by language barriers and time zone differences that may arise when outsourcing your business process to a foreign country.
4. Outsourcing Using Cloud Computing
When you purchase IT-related services online, you are using cloud computing-based outsourcing. Models such as Platform-as-a-Service, Infrastructure-as-a-Service, and Software-as-a-Service are included.
Here is a brief description of each of these cloud computing services:
Services that provide customers with a digital platform to run, develop, and manage things without the need for them to build and maintain the infrastructure themselves.
Internet-based services that provide virtualized computing resources.
Provides services that include hosting an application online and making it available to customers.
5. Outsourcing of Managed Services
This refers to entering into an agreement with a third-party managed service provider (MSP) to outsource network management functions. Firewalls and virtual private networks are among the services provided by the managed IT service provider (VPNs).
To date, technological advancement has permeated all industries. Big data, cloud computing, and other widely used technologies are supplemented by disruptive technologies such as robotics, encryption, and artificial intelligence. As a result, the future of IT outsourcing is changing. Automation is taking the lead, with the goal of replacing at least some operations. Humans are being replaced by robots and cloud computing.
According to Deloitte, 93 percent of businesses have implemented (or plan to implement) cloud computing within their organizations. These businesses also expect their outsourcing providers to embrace disruptive technologies. Disruptive outsourcing is expected in all business functions, including IT, HR, and accounting, because it provides flexibility and scalability in comparison to more traditional outsourcing strategies.
IT outsourcing not only saves you money, but it also allows you to focus on your core business tasks, allowing your organization to grow.
That is why it is critical to hire IT professionals with caution.
And, while managing your outsourced help can be difficult, with the right tools, it’s a piece of cake.
Furthermore, tools like Time Doctor can help you increase the productivity of your entire team, not just your outsourced professionals. As a result, both your on-site and outsourced staff will be performing at never-before-seen levels!