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What Is IT Outsourcing? Ultimate Guide For Your Software Project In 2021

What Is IT Outsourcing? Ultimate Guide For Your Software Project In 2021

IT Outsourcing - The Best Survival Strategy In COVID19 For Businesses (1)

IT outsourcing is the practice of hiring resources outside an organization to deliver job functions that a business requires. These include, but are not limited to infrastructure management, software development, web development, data center management, data storage, disaster recovery, online threat protection, and technical support. Outsourcing is the perfect solution for companies of any size looking to scale up or get access to broad IT expertise especially if they bring global talent on board.

Most of us would agree that IT outsourcing has quite a bit of variety within it. Although it involves operating outside of an in-house model to save money, scale faster, and increase efficiency, businesses can achieve unique goals with different approaches. Let’s look at the available types of outsourcing solutions next.

IT Outsourcing Types

Onshore/Domestic

This involves contracting an external service provider in your own country. You can ask them to manage IT-related job functions onsite or remotely.

Offshore

This is all about relocating IT tasks to a third-party provider in a foreign country that offers lower labor costs as well as economic and tax savings.

Nearshore

This involves assigning IT services to a company in a country that shares a border with your own. When you outsource to third-party providers that are close by, you benefit from effective communication, closer time zones, and better commute.

What This Means

What can we understand from these models? The company that you choose as your IT partner can be anywhere, whether a few blocks away from your office or on an altogether different continent.

For example, consider how outsourcing plays an integral role in the increasing use of AI virtual assistants. Today, many organizations are automating processes with enterprise-level virtual assistants, leading to rising demand for specialized voice assistant apps. These companies then typically outsource the development project for skill and cost reasons. So, if a company is based in the States and offshores this task, they may hire a development firm in Pakistan or the UK. If they nearshore the work, they may work with a Canadian third-party provider.

Regardless of your preference, you should focus on both the business partnership and logistics. It is a partnership, not a buying project that simply addresses service-level agreements (SLAs). To achieve success, maintain a trusted professional relationship, and highlight the existing clause of a service contract. This will guarantee that everyone involved fulfills their obligations and remains available until the contract is up after which they can decide whether to continue.

Why Outsource IT Infrastructure?

The benefits of IT outsourcing are practically endless, especially for the technology sector. Here is a list of reasons why startups and enterprises go for services such as software product outsourcing:

  • Reduces OpEx and makes more capital funds available for other business investments.
  • Offers access to world-class skills and capabilities.
  • Makes up for a lack of in-house expertise.
  • Prevents work overload in teams and frees resources to focus on strategy or core competencies.
  • Helps meet challenging deadlines particularly when in time and mission-critical circumstances.
  • Improves focus by letting businesses target broader business goals while leaving operational details to outside specialists.
  • Provides access to innovation, thought leadership, and intellectual property.

Let’s explore these benefits in the following section.

Advantages Of Outsourcing IT Infrastructure

Financial Savings

Software development outsourcing models and services translate into financial savings for companies. Outsourced IT support is generally more cost-effective than putting together an in-house team. To begin with, developing countries have English-speaking employees who are willing to accept new opportunities at lower costs. You can find resources with years of experience in delivering quality work, which means you save on recruitment and training costs.

When offshoring, you need not invest in infrastructure as third-company providers are responsible for setting up and maintaining their computer systems. Furthermore, it becomes easier to develop ideas into innovative and practical concepts when resources from across the world offer unique perspectives. This reduces delays, enables faster delivery of products and services, and accelerates time to market. The reason is third-party providers focus on what they can do faster and better at affordable rates.

You can either pay a fixed monthly or per-user fee. Ask yourself what you consider more important. Is it the speed at which an outside company can reduce your costs or the total amount of savings they can offer? Do you want fixed costs or variable price options? Note that the exact cost depends on the number of users and the level of support you are receiving. Even then, the calculations are simple, and the price is just right. Not to mention most service providers have dedicated, out of hours support. There is no need to not worry about issues like holiday, accident, or sickness cover. It is possible to resolve issues remotely now that almost everyone is working from home. So, you do not require a complete, in-house team for all of this.

Talent

Working with an outside company provides on-demand access to knowledge and experience one may never have come across before. An excellent third-party IT service provider will have employees with impressive qualifications and expertise. There is always someone available to provide their services, whether it is a quick fix to a problem or for a long-term project.

Ask yourself if you require broad skill sets or expertise in specific areas to simplify the decision-making process. You can even choose to bring in a freelance consultant if skill shortages in your country make it necessary to seek talent elsewhere so you can perform critical tasks. Take the example of how COVID-19 has led to several economic recessions around the world. This has encouraged businesses to search for tech talent outside their countries and outsource software development tasks while optimizing expenses. We can safely say that this is the best way to outsource software development.

Strategic Consulting

Your portfolio of products and services directly reflects your brand. This is where great IT outsourcing providers come in as they can competitively support strategic plans and business objectives. With years of experience working across various industries, companies, and countries, they are in a good position to offer advice and recommendations to CIOs on future IT requirements.

Doing so not only ensures that everyone is on the same page when it comes to short-term and long-term technology demands. It drives sales, keeps customers happy, and simplifies product or solution maintenance. Businesses can then act proactively and succeed in today’s world of digital transformation.

Conclusion

Getting started with IT outsourcing is simple. It is only a matter of knowing exactly what you wish to achieve before outsourcing any functions. Communicate clear expectations to your IT partner so that they know the best way to collaborate with you and deliver results.

If you have any questions or would like to discuss your IT requirements, contact us. We are always happy to help!

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