With uncertainty surrounding today’s global economy, software companies need the opportunity to extend or downsize quickly, which is often impossible with today’s labor laws. IT outsourcing is what helps increase the flexibility of scaling your projects and benefit from professional expertise.
As we all know, when the pandemic started, many companies, including the IT sector, faced difficult times, and they needed to let some employees go, or make some budget cuts. Luckily, outsourcing was a huge thing before all of that happened, and many companies were using this type of service to improve their work.
There are different situations, and we need to understand how all of that, including every positive and negative aspect, and how it really works. Some people are still skeptical about that, and they hire professionals, which is good on one hand, but on the other, they have to calculate a proper salary, and sometimes these employees may not have a task for a whole month, depending on the nature of the company.
So if you want to alleviate pressure on your in-house staff with software outsourcing, this article will go over the basics of this practice and unveil the hidden benefits it can reap for your business.
What Is IT Outsourcing?
According to Devox Software, IT outsourcing is the practice of delegating some or all of the IT functions required by a business to an external service provider. The service provider then manages and administers the selected processes to an agreed standard.
This is a go-to practice in the technological landscape, as it is a magic wand of scaling-up and down as needed. The global market for outsourced services is worth almost a staggering $93 billion — and is continuing to grow as more companies continue to leverage external teams’ capabilities.
How it’s helpful? For you as a business owner, can be very cost-effective, and save you a lot of money, even though the service by itself it’s not cheap. For the person who will take the task, it’s a good way to earn more money, because they will give everything by themselves to be more productive and efficient, knowing that a great amount is waiting for them. In the end, their quick performance is what those who hire them want and hope they will get.
Now, let’s have a closer look at the advantages that IT outsourcing brings for your business.
6 Key Reasons Why IT Outsourcing Is Worth Trying
1. Access to the international talent pool
When geographic boundaries are factored into the recruitment process, it automatically lowers your chances to find the bright mind your company needs. What if you could take your search onto an international level? You can easily do it with overseas employment. If your location is skill-constrained, outsourcing allows you to find specialists that may be in short supply or unavailable locally. The freelance websites are a great example of how it can work pretty smoothly, without causing any additional problems. Sometimes, the right person for you may be on another continent, but today, with all that technology available, there should be no boundaries between two compatible sides who can benefit from each other.
2. Broad expertise
Going out into the world also unlocks unprecedented levels and types of software expertise. Along with tapping into the global IT market, companies are also exposed to a diverse database of candidates with a wide range of skills and development experiences, including rare tech stacks and cross-field expertise like software logistics or marketing. With other words said, you will have a chance to have the best professionals in your team, who will provide great service. Skilled people are still in a high demand, in almost every business area.
3. Faster hiring
Many times stranded with internal crunches, companies farm out some functions to supplement gaps in their internal talent acquisition team. If there appear any hold-ups in recruiting experienced and ingenious specialists needed to drive objectives, then excelling or at least keeping pace with competitors becomes rather challenging. This is where outsourcing services come in handy, as they significantly accelerate the recruitment process thanks to a vast candidate pool.
When you hire someone permanently, you have a great responsibility to find the right people, make the needed interviews, and choose between the candidates. But, the outsourcing companies and even individuals are aware that the jobs may be short-term, and they have defined conditions, so every side can be satisfied.
4. Team flexibility
Vendors have various resources at their exposal, while in-house staff often have bounded resources and capacity. Outsourcing can give businesses more flexibility in their recruiting policy and overall workflow. By hiring contractors, the organization gets the ability to handle seasonal and cyclical workloads, without sacrificing performance.
5. Lower operational costs
Cost savings is another reaped benefit. Outsourcing enables companies to reduce their costs on hiring search, onboarding, payroll taxes, and labor. Companies also turn to vendors when there pop up tasks that will be more costly to complete in-house. Or, if we turn all of these in simpler words, you have a chance to have a professional in your team, without having to cover all the employment expenses, and providing them an office, computer, and desk, because it can be too much for your budget. But, those who offer this type of service already have everything they need to complete the task for you right in time.
6. Lower workload
By handing over the non-core activities to external agencies companies can take the burden off their internal workers. Also, outsourcing helps with functions that are difficult to address and control in the chaos of daily processes. Not every manager can handle a whole team, especially if they don’t have knowledge in some particular area. Outsourcing is a great way for them to appreciate the people who already work for them, and prevent the company from huge expenses.
Types of IT Outsourcing
The words “offshore” and “outsource” are often used as synonyms. However, outsourcing is the umbrella term, while offshoring along with two other models means a specific location-based type of outsourcing. With that said, let’s solve this puzzle below.
The onshore type refers to the outsourcing model that presupposes hiring a vendor in your own country. This is a great option for companies who prefer the convenience of the local industry network and are prepared to cover for high hourly rates.
This model is similar to offshore outsourcing. The only difference is that the outsourced team is based in a close geographic region that shares similar cultural codes, mindset, and traditions.
Offshore outsourcing usually offers a cost-saving advantage by sending IT-related work to a company located in a foreign country. This type also locates the process in a distant country for a number of other advantages mentioned above.
The Bottom Line
Outsourcing has come on stage to become an easy and cost-effective technique, which is used widely in today’s digitization world. Farming out your IT services to a third-party provider grants you financial benefits such as leaner overhead, bulk purchasing, and lower operational costs. Outsourcing IT functions also allows your management to focus on your core competencies and business growth, rather than wasting time and money on mundane tasks.
If you have to make a quick decision on this, we hope that this article helped you decide what is best for you and your work. We also hope that it will help the people understand the importance of these services, so they will hire these professionals more in the future.