How to Outsource Information Technology in 2023
- June 16, 2023
- 8 min read
- By Sabeeha Banu
TABLE OF CONTENTS
The COVID-19 pandemic has fundamentally altered industries, ushered in new-age customer demands, and stimulated technology advancement. It prompted companies to rethink their business operations. Outsourcing has burgeoned, where some IT firms streamline their business while cutting costs and minimizing risks.
The IT outsourcing market has grown tremendously for hiring the best talent and discovering hitherto untapped outsourcing benefits. Global IT outsourcing contracts are staggering $66.5 billion. It’s obvious that IT outsourcing is in demand, but how can it help small firms expand, especially if they’re still in the early stages of growth?
This blog explores how IT outsourcing solutions can help businesses of any size to meet their business goals and increase revenue.
What Is IT Outsourcing?
IT outsourcing is a business practice that involves managing IT infrastructure, providing software service offerings, developing robust design apps, and managing many service desks using outside service providers.
It is turning to outsourcing providers to access the best technology and talent at a low price to maximize profits.
When Eastman Kodak took the historic decision to outsource its IT operations in 1989, there weren't many significant suppliers. Today IT firms have many options for delegating their IT needs.
IT Outsourcing Types
Offshoring is outsourcing IT operations to a partner in another country. Businesses use offshoring to hire a larger talent pool at affordable costs. Usually, firms offshore their services to countries with low labor costs, political stability, and tax savings. The main downside of offshoring is the distance which can make communication difficult and lead to cultural differences. It can also be challenging to manage and monitor an offshore team.
In contrast to offshore, where the service provider is in a foreign country, nearshoring uses a local service provider. With nearshoring it's simpler to coordinate and communicate with a team in a similar time zone. Additionally, it is less likely that cultural differences may cause problems.
Onshoring is outsourcing IT operations to a service provider within the same country. Organizations onshore either acquire skilled labor that is not accessible locally or benefit from tax incentives. Onshoring allows IT firms to coordinate and communicate easier. On the other hand, onshoring doesn't likely provide the same economic advantages as offshore or nearshoring.
Multisourcing refers to the use of several outsourcing providers. By working with several vendors, businesses reduce their risk. The main benefit of multisourcing is IT firms can mix and match vendors to get the optimal balance of cost, quality, and service. The biggest drawback is that maintaining several providers and managing several vendors in various time zones can be more challenging.
What Drives a Business to Choose IT Outsourcing Over Hiring In-House
Outsourcing allows IT companies to save costs while focusing on their core business activities. It is a practical means of addressing capacity issues. With outsourcing amid growing market share and elevated product value, businesses can work on projects with the most potential.
Companies outsource their IT process owing to limited resources and resource optimization. With outsourcing, IT organizations can easily bypass the drawn-out and time-consuming hiring process and onboarding. Businesses that outsource are more adaptable and can scale up or down as needed.
Benefits of Outsourcing Information Technology
Businesses can outsource their IT and gain the following benefits over time:
Strategic IT Expertise
IT firms frequently experience difficulties in hiring people.
Did you know that 53% of European businesses say it is tough to find qualified IT candidates? For this, IT firms need to seek assistance to have access to a skilled base of IT specialists.
Through Information Technology outsourcing, IT businesses can combine their internal resources with external knowledge. They can access staff with top-notch skills and technological expertise.
Increase in IT Efficiency
A top-notch IT outsourcing provider will have the tools to carry out the tasks effectively. However, handling the same project in-house, finding the candidates, and training them could take time. Reliable outsourcing partners like Office Beacon brings years of knowledge, saving time and money.
Information technology outsourcing enables companies to optimize their internal resources and free up team members to focus on their competence.
Support In-House IT Team
In-house IT teams usually become overburdened by handling general help desk requests, software updates, and other tasks. Employing an externally managed IT service can free up internal IT staff's time so they can work on core IT tasks.
With creativity and innovation at the forefront of every IT outsourcing operation, they complement the in-house team's endeavors.
Compliance & Security
With IT companies expanding into the digital sphere, cyber security is crucial to the operation of any successful company. Sensitive information about your business and clientele is at risk if you don't have a solid cyber system. IT companies can secure client information and other sensitive data by outsourcing with a PCI compliance provider.
A reliable outsourced IT team works around the clock, ensuring zero downtime. They are available 24/7 to tackle any IT-related issues promptly.
For instance, if a website is down, sales possibilities are lost. 37% of businesses have experienced client losses due to website outages.
Hiring, training, and turnover in the IT department can be expensive. Above all, it means your employees are on a perpetual learning curve. Outsourcing IT services means dealing with experienced staff and a company that bears the financial burden. With IT outsourcing, businesses don't have to worry about paid time off, health insurance, or replacing outdated software or broken hardware. Now, IT firms can repurpose finances in other areas that help their business grow.
How to Build the Best IT Outsourcing Strategy
IT outsourcing demands the coordination of several departments, such as legal, HR, operations, etc. The top things that drive businesses to outsource are sophisticated technologies and resources at the lowest possible cost.
Here are a few best practices to follow to create the ideal IT outsourcing plan for IT businesses:
Outsourcing for the Right Reasons
Many IT firms place a lot of emphasis on performance optimization while overlooking their primary goal to improve business performance. These business goals need additional space to experiment and test out novel ideas, new applications, new solutions, and more. Businesses need outsourcing to free up the resources for these activities.
A good IT outsourcing strategy is where the business is upfront with its expectations from the external outsourcing provider. Also, IT businesses need to outline the business value of outsourcing and how it supports business goals.
Utilize the Right IT Outsourcing Partner
Finding trustworthy, dependable, and high-quality service providers is a very crucial choice. An ideal Information Technology outsourcing partner needs to be capable of completing all the complex IT project requirements within the stipulated period. Before signing the contract, businesses should ensure they work with the right partner.
Nondisclosure agreements, or NDAs, are the primary checkpoints to outsourcing collaboration. These contracts will help IT companies to conduct business without disagreements or issues. Therefore, the security of intellectual property must be kept in mind while selecting an outsourcing partner.
Gauge Communication Skills
When selecting an outsourcing partner, look at how well a company communicates. Start looking for a partner who discusses the need in detail. Communication can establish trust for IT businesses to create successful, long-term business relationships.
Also, keep track of the daily progress of virtual assistants. Get everyone on the same page by communicating frequently and defining KPIs.
These are the primary factors to consider when choosing the right outsourcing partner for IT business tasks.
IT outsourcing saves companies money and provides high-quality services at their discretion. An outsourcing partner with highly skilled staff and an appetite for growth can propel IT firms onward. Office Beacon assesses clients' needs to deliver the finest IT services possible. Ready to take the next step? Let's connect.