Businesses across the world are eluding competition by utilizing market-leading techniques and technology to survive. However, businesses of all sizes and in all sectors are constantly working to increase their revenue sources and stay one step ahead of the competition. If we stick to the facts and talk about the IT outsourcing industry, Statista has made it abundantly evident that the outsourced market has been rapidly expanding.
The utilization of IT systems has gotten increasingly complex in today's world of increased demand for specializations like IT and software engineering, prompting the necessity for firms to have a competent IT department to control expenses while ensuring the system functions properly. Businesses can use a variety of IT outsourcing services, including database management, network management, and IT system operation.
This article seeks to outline the key meaning, benefits, and types of IT outsourcing and how you can outsource the correct people for your business.
What is IT Outsourcing?
IT outsourcing is a business strategy where many software business requirements are escalated to outside service providers who are knowledgeable about delivering software solutions and achieving quality standards. IT outsourcing began as a cost-cutting venture but has rapidly expanded into a trend for companies looking to discover untapped outsourcing benefits and get the right expertise for their business.
IT outsourcing can be characterized as a comprehensive process that involves managing IT infrastructure, providing software service offerings, developing robust design apps, planning development, and managing various service desks.
IT outsourcing encompasses numerous minor activities in addition to managing a single process or project. The IT outsourcing company is fully responsible for all aspects of software development, including ideation, designing, testing, deployment, and maintenance services.
Software outsourcing firms can provide technical help on a project-by-project basis, completely managed, in a co-sourcing model, or typically by enhancing facilities with the professional personnel of IT outsourcing organizations. Outsourcing accounted for 13.6% of the total IT budget in 2020-2021, which is an increase from 12.7% in 2019.
What IT Services are Commonly Outsourced?
Because there are numerous operations that businesses might outsource at a cheaper cost, the field of IT services is not restricted to a single technology offering or service. IT services make up a sizable portion of the IT industry and include numerous untapped services that organizations may require at any time. Some of the most commonly outsourced IT services are listed below:
1. IT Development Services or Software Development: Involves managing the development of any kind of complex software across all SDLC life-cycle phases.
2. IT Consultancy Needs: Providing ongoing assistance to organizations to help them handle their unique IT requirements easily.
3. IT Security Services: Providing protection for organizations from viruses, spam, and other online threats.
4. Managed IT Services: Provide prompt server hosting and application hosting services.
5. IT Infrastructure Services: Includes installation of networks, gear, software, and other technological infrastructure, among other things.
6. Data Center Activities: Data center outsourcing sorting, processing, and storage tasks are all part of data management.
7. Strategic Planning and Association: This phase addresses all the planning requirements, from conceptualization to strategic planning, implementation, and association.
8. Data Backup and Disaster Recovery: Data security is crucial because information is what makes up the majority of procedures today.
With the countless services it provides to its clients, IT outsourcing has been rapidly transforming enterprises. Now that we are aware of how businesses have been transformed by the demands of IT, it is essential for all enterprises to work together with IT outsourcing firms to advance and build profitable futures. Businesses can interact with other businesses using particular strategies. You gain a competitive edge over your rivals when you outsource, and your internal teams perform better as a result.
Types of IT Outsourcing
Location-Based IT Outsourcing Models
1. Onshore Outsourcing
Onshore outsourcing is when your outsourced team is located in your own nation. There won't be much of a time zone difference even if your developers live in a different part of your country. Since there are no linguistic or cultural obstacles, your internal staff will be able to communicate effectively with an onshore team.
2. Nearshore Outsourcing
Hiring a nearshore outsourcing development team entails outsourcing your work to locations close to where you are located. The time zones won't differ by more than a few hours under such circumstances. Nearshore outsourcing might be more economical than onshore outsourcing. However, depending on your location, communication difficulties may arise due to language problems.
3. Offshore Outsourcing
Offshore outsourcing is the practice of contracting out your development work to a company based in a nation other than your immediate neighbor countries. Outsourcing to another country may be relatively economical, depending on your choice of location. You can make sure that communication between your internal team and your outsourced workforce runs smoothly if you employ a competent project manager and, in some situations, a proficient translator. However, the best practice would be to hire from a country where the first language is English and offers virtual staff at economical prices, like the Philippines.
Relationship-Based IT Outsourcing Models
4. Staff-Augmentation Model
Let's say you require a professional to improve one of the more intricate components of your product. It makes no sense to go through a drawn-out hiring process to hire someone temporarily because this is a one-time requirement. In such cases, you can simply call an outsourcing company, and they will assign you a qualified professional for the time frame you specify. The expert will collaborate with you as a member of your team.
5. Dedicated Team Model
In a dedicated team model, you can use an outsourcing company to employ an entire team of developers to work on projects that you don't want to provide to your internal team. The difference in this situation is that the outsourced team won't need to work together with your own workers because they'll be working on separate projects. They will continue to communicate with you via a project manager or another person in a similar position.
6. Project-Based Model
You won't need to be active in the project development process if you pick a project-based model of relationship-based outsourcing, other than during the handover and delivery phases. It is typically the most well-liked outsourcing approach and has been shown to be successful for projects when stakeholder engagement is minimal.
This model's biggest drawback is that you won't have any control over how the project develops. You must establish the tone and frequency of your communications with the project manager the outsourcing company has given you in order to ensure effective communication.
Advantages of IT Outsourcing
1. Saves Truck Loads of Money
It is expensive to have in-house software development teams, especially for small businesses that are trying to cut costs. The organization may easily access the greatest services and skills by outsourcing its IT help desk, saving money that would have been spent on staffing, training, and other internal labor costs for software development. It is incredibly expensive to hire and educate IT professionals, and the caliber of temporary workers isn't always up to par.
You can concentrate more on your human resources by outsourcing the areas where you need them most. Additionally, outsourcing partners assist your company in reducing the need to spend money on the supplies and resources needed for successful software development. Outsourcing converts fixed IT costs into manageable costs, which aids in budgeting successfully.
2. Makes You More Time Efficient
You may concentrate more on your career and area of expertise when you outsource IT jobs because you won't have to waste time studying and completing work that doesn’t require specialized skills. The outsourcing company also has industry knowledge, so the job is typically of a higher caliber and is completed more quickly than it would be by an internal team.
The costs of production, research, distribution, and marketing are significantly greater for businesses that handle everything themselves and must be passed through to clients. The cost structure and economies of scale of an outside provider might give your company a significant competitive advantage.
3. Reduces Labor Costs
For short-term or minor tasks, hiring and training people can be quite expensive, and temporary staff may not always meet your expectations. Additionally, the current employees in your firm might not have the necessary specialist knowledge to evaluate and guarantee the quality of new hires when you hire them for temporary tasks. To assure quality, you will therefore need to use outside QA or QC. Outsourcing thus enables you to concentrate your human resources on your core activities.
4. Access to More Talent
One major advantage of outsourcing IT operations is that there are several people who may be accessed through onshoring, offshore, and nearshoring models. Companies can combine their internal resources with external knowledge through information technology outsourcing. Access to developers with top-notch capabilities and technical expertise is made possible via outsourcing.
5. Enhances Security
Data backup, protection, and monitoring are a few key security services that a corporation may outsource. Providers can maintain best practices for cybersecurity and keep up with updates to crucial applications like antivirus software. They can also keep an eye on and spot strange network activity. This is important because when certain businesses lack the resources to invest in their cybersecurity infrastructure, detrimental coverage gaps are generated. Future breaches are made possible by these gaps, which results in downtime and a host of other problems.
How can you Outsource IT staff?
Nowadays, there are various sources to find outsourced employees. You can be looking for a single individual, a group of people, or an entire department, depending on the requirements of your business.
Hiring individual virtual workers or small teams is typically not too difficult, especially when you hire from a dedicated outsourcing marketplace. Using a platform like VirtualStaff.ph will help you find staff, send them offers, hire them, get into contracts, use the time-tracking and management tools to monitor activities and hours worked, and pay them directly from within the platform without any processing fees. Here’s how the platform can help you overcome the challenges of outsourcing:
- English-speaking and professional databases of VAs remove communication and language barriers.
- Get into contracts with individual staff and not agencies. This ensures that the work is done by the selected individuals themselves and not outsourced further.
- The option to pay your hired staff from within the platform provides complete security of payments, without any hidden costs.
- Time-tracking and management tools ensure that you pay only for the hours actually worked.
- No requirements for advance payments as in the case of hiring agencies.
- Hire staff at almost half of the prices as compared to countries like US and UK.
To Conclude,
The number of IT outsourcing functions will increase quickly in the future. It is clear from the IT outsourcing industry's continuous strong expansion in both scope and depth that it is a management strategy that is here to stay and that, in the right situations, it may provide the benefits that its supporters have noted.
You can help your business get off the ground by working with a partner who offers reputable and competent IT outsourcing services. VirtualStaff.ph has been offering its clients the cost-effective IT outsourcing they need for ongoing operational needs and long-term strategic goals. After learning about IT outsourcing services, no matter the size of your business—small, medium, or large—if you're seeking comprehensive IT outsourcing, we can lead you in the right direction.
So, go ahead and check out the profiles of professional virtual assistants today and begin your IT outsourcing journey.
