A common goal of every business is to make advancement and tech businesses are no strangers to this. Outsourcing has proven to be one of the most reliable modern ways to ensure business improvement. Here is exactly all you need to know about outsourcing and its role in the technical branch.
What is IT Outsourcing?
Outsourcing is the engagement of organization(s) or third-party personnel from outside your organization or company, to handle some aspects of your business process, which can be done internationally or locally. IT outsourcing involves acquiring the skills of personnel outside your organization to handle Information Technology functions. IT-related functions that are usually outsourced include data storage, web development, software and application development, technical support, telecommunications, and infrastructure, etc.
Specific Features of IT Outsourcing
Like in any industry, outsourcing in the IT sphere has its unique features.
- Offshore IT Outsourcing
This refers to delegating IT services to third-parties to distant locations so as to tap into a larger pool of talent and benefit from favorable economic conditions and time zones as well as from cheaper labor. The extreme difference in time zones in offshoring will ensure uninterrupted tech services. A good example of this is a UK-based strategic marketing company, offshoring its graphics design to a Canadian design company.
- Nearshore IT Outsourcing
This is quite similar to offshoring, just that it involves outsourcing of IT-related tasks to areas closer to home, either to areas within similar time zones or close to it. For instance, a British based Journal outsources its digital Marketing to an Irish-based company.
- Onshore IT Outsourcing
This refers to giving out IT related services to a different outfit within the same country often as a result of cheaper operational and labor costs. Even though saving costs drive onshoring, it can also result from a shortage of skill or talent pool in a given part of the country.
- Home Shoring
Home shoring is an aspect of onshoring whereby employees of a given business outfit work from home. An example of outsourcing is a case whereby a company in Arkansas employs the services of a Fintech firm from New York.
This involves outsourcing different operations to different vendors. For instance, a Texas Software development firm might outsource design projects to a smaller agency in Louisiana. After acquiring bigger and long-term projects over time, they may need to partner with another firm in Canada to meet their demands. Later on, the company decides to release its own suite and would need the services of a marketing agency in China to get the product across the local market.
Why exactly do you need to outsource different IT specialized tasks? Here are five reasons.
5 Reasons for IT Outsourcing
Each of the following reasons explains the benefits that your company may have thanks to IT Outsourcing.
- Reducing and controlling operating costs
In most cases, outsourcing saves money as a result of cheaper infrastructure, lower costs of labor and gaining an advantage over the tax system in locations where tasks are outsourced.
- Improving the company’s focus on its core activities
Running a company requires a number of activities. A financial company may be distracted from its core activities by trying to pay attention to its IT needs. Outsourcing will save the company time and help employees attend to their roles.
- Providing the internal workforce freedom to let them do other tasks
Delegating tasks to third parties will allow your internal workforce to focus on more pressing and meaningful tasks. It increases productivity.
- Gaining access to outstanding IT skills that internal workforce may lack
The local workforce might lack IT skills or resources, which might be surplus in other areas. With IT outsourcing you can easily tap into the talent pool found in such areas.
- Reducing risks of using inappropriate or obsolete technologies
The absence of the required tools may result in employees cutting corners and employing the use of obsolete technologies in getting things done. You will be better served by outsourcing tasks to third-parties with the latest technologies as this will maintain the standard of operation.
Let us have a look at the dynamics of IT Outsourcing during the last years.
IT Outsourcing in numbers
IT sourcing is now a mainstay that has seen global acceptance in recent times. The IT Outsourcing Statistics for 2017/2018 by Computer Economics reported a rise in IT outsourcing from 10.6% to 11.9% between 2016 and 2017.
Furthermore, the budget spent on outsourcing by big companies within that time got to 8.7% from 6.3%.
Meanwhile smaller businesses and midsized companies have seen an increment in budgets from 6.7% to 7.8% and 4.7% to 6.5% respectively.
How to choose the right IT outsourcing type?
To help you decide what type of outsourcing it is better for you to employ, you have to take some steps, which include:
- Clear identification of the goals for the product that is going to be enhanced via IT Outsourcing services. This will help you determine what type of outsourcing should be incorporated. Is your goal to reduce cost, or get the right skill set for the job, or tap into a large workforce? Considering such questions will help you arrive at your decision.
- Identify if your internal workforce is going to participate in this IT project. The extent to which your internal workforce will be part of the project will play a long role in determining the choice of outsourcing. What will be outsourced, what skills are needed and where would you get such skills?
Selecting the right type of IT Outsourcing is essential for achieving the goals of your business.
Advantages of Your Cooperation with Technorely
There are many benefits associated with IT Outsourcing. We offer outsourcing solutions to help you achieve different goals in Blockchain, Fintech, Healthcare and Industrial projects. The skills of our R&D team correspond to the standards met in delivering top-notch services. We are always ready to lend you a helping hand and provide an ideal solution. Reach out to us today, as we are looking forward to hearing from you.
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