The digital age has come, and it’s time for you to make the change or be left behind by your competitors. As technology increases in demand, so do the difficulties of acquiring the new essential pieces to keep up with it. This includes IT-related services.
The demand for IT services has reached an all-time high. It’s come to a point where the top IT outsourcing companies worldwide have increased their clientele to meet everyone’s needs.
You might be wondering why companies are choosing to outsource their IT needs. Hearing about the various countries that provide IT services through a third party and the companies that seek them is one thing. However, understanding why they do it and why you should follow their examples is another.
Below is a detailed explanation of IT outsourcing, why it’s gaining traction, and the pros and cons of outsourcing should you wish to try it out yourself.
What are Outsourced IT Services?
There has been an increase in IT spending worldwide, not just because of its reliability but also because of the growth of technology. Meanwhile, outsourcing became more accessible and widespread because of unforeseen events that caused its necessity, like the COVID-19 global pandemic.
But what are IT outsourcing services, and what is their difference from regular IT services? Outsourcing means hiring a third party for specific tasks you need to be done. Let’s say you have a startup company that requires website development, marketing, or programming for specific structures. However, your budget can’t afford an onsite worker due to the high demand for IT professionals in your area.
That’s when you opt for outsourcing, which is the process of hiring professionals on a contractual or ongoing basis. It’s quite popular for IT professionals, who have a wide range of specifications and requirements that can be rare in some locations and available in others.
Types of Outsourced IT Services
There are three types of IT outsourcing that businesses can choose from. Onshore outsourcing, nearshore outsourcing, and offshore outsourcing are the three types of outsourced services businesses can choose from.
Onshore outsourcing companies refer to outsourced services that reside within the same country the company is hiring from. Meanwhile, nearshore ones refer to outsourced services that reside in neighbouring countries within the same time zone. Finally, offshore outsourced services are ones located in distant countries with different time zones entirely.
Depending on the capabilities of your IT service management, one of the three types would fit perfectly for your company. Keep in mind there are various things you should consider before choosing one of the three types.
Why Do Companies Outsource IT Tasks?
The balance between the advantages and disadvantages of outsourcing are things to take into consideration before committing to it for your company. Why companies end up deciding to commit anyway is the real question.
The reason is that there are many benefits of IT outsourcing that companies, especially startup ones, cannot ignore. At the same time, many possible issues could cause problems that can be easily solved. Below are 5 pros & cons of outsourcing services in IT that may help you get an idea about the risks and benefits.
Pros and Cons of Outsourced IT Services
5 Pros of Outsourced IT Services
There are many reasons why companies choose to commit to outsourcing. Below are five prime examples of the IT outsourcing benefits they acquire. These benefits make it hard for them to ignore the potential of outsourcing in general.
Cost Efficiency
A leading factor why startups and other businesses prefer the employees of an IT outsourcing company is its cost-efficiency benefit. The price of having an in-house IT team varies depending on the country in which you reside. The downside of this is the high demand for IT workers in a country, which could result in high costs.
Businesses and startups wanting to budget their finances without ruining the quality of their work rely on outsourcing world-class talents at a lower cost than their counterparts. Not only do they receive the service they pay for, but clients also receive innovative and experienced remote workers who provide world-class solutions to problems within their IT infrastructure.
Access to Specialised Expertise and Advanced Technology
What makes the IT outsourcing industry so crucial to today’s world is its globalised access to rapidly growing technology. Every day, there is an advancement for convenience, adjustments, or improved techniques. As a result, it may be difficult to keep up with all these advancements.
Even worse, the chances of finding experts who specialise in your required format can prove more difficult than you can imagine. However, with outsourcing your chances of finding one increase greatly.
Compared to the limited area you have circulating your area, the world becomes your oyster when you opt for outsourcing. Countless professionals are available, each with their requirements, specialties, and skill sets that you can utilise for your IT needs.
Scalability and Flexibility in Resource Management
Aside from the IT services and solutions these remote and outsourced employees provide, they also give you another benefit: growth. Scaling your resources and managing them is a key factor as to why companies opt for outsourcing.
Eventually, your brand’s IT infrastructure will grow just as your business grows. Ensuring the quality of your projects without harming the growth process maintains a sense of stability for your business.
That’s why having remote workers, who are flexible and able to scale up your structures, is crucial. Their innovative methods and experience working with multiple companies previously gained them an advantage over other professionals in terms of adjustment periods and collaboration.
Focus on Core Business Functions
A big disadvantage with in-house IT professionals carrying out most of the work is the delay in progress for core business activities. This causes issues for any progress on the business’s overall growth.
That’s why core business functions and collaboration should be handled by in-house IT employees and other professionals. Meanwhile, the structuring, maintenance, and development of your other software and necessities can be handled by outsourced IT workers.
By doing so, you can have your in-house employees focus on the growth of the business without worrying about any maintenance issues, security breaches, and other setbacks that the outsourced employee can manage.
Improved Security
There are many benefits to using third-party IT employees. However, this last one we will discuss is crucial. Improved security is necessary now more than ever since the acceleration of the digital age.
Criminals adapt to the changes of time. Now that data breaching, identity theft, ransomware, and malware have become popular, businesses must safeguard their clients and employees from the impending danger.
Outsourcing companies are ahead of the game in terms of cybersecurity. Ensuring the quality of your security and using multi-factor authentication systems are just some of the many options you can utilise when outsourcing. Even more impressive are data centres, which enhance the company’s storage, are cost-efficient, and are environmentally friendly.
5 Cons of Outsourced IT Services
Now that we know about the benefits of outsourcing, it’s time to learn about the cons. Below, you’ll find 5 major IT outsourcing disadvantages that put off curious business owners and recruitment teams. However, included with these cons are solutions that can create a foolproof opportunity for your brand.
Communication and Time Zones
A big problem that many startups and companies face is miscommunication and time differences when outsourcing. The problem starts when the cultural aspect and language aren’t the same. This can cause some issues between employers and contractual employees who work for a third-party company.
Time differences can also cause delays and can be especially damaging during emergencies. The trick to solving these issues is simple.
Remember when we talked about the three types of outsourcing? Instead of choosing offshore outsourcing, the best would be either nearshore or onshore for those concerned with time zone differences. In terms of communication, choose a country that can speak the same language as you do.
A great example of excellent multilingual countries are the Philippines and India.
Loss of Control over IT Processes
Outsourced IT services may result in a loss of control over your day-to-day IT processing. This can result in miscommunication or delayed instructions. The best way to resolve these issues depends on your outsourcing provider.
Some outsourcing companies prefer to direct communication from them to the remote worker. Meanwhile, other companies would allow you to manage the remote workers you have hired. A great example of a flexible outsourcing company is Flexisource IT itself, which provides you with handpicked employees, with your methods being the priority.
Security and Privacy Concerns
Here’s the kicker: while you may have good cybersecurity, what do you do if it’s an insider breach? The risk of having in-house employees and remote employees breaching your data remains possible.
However, by ensuring a non-disclosure agreement (NDA) and using authentication factors while monitoring the activities of the employees when handling company data, you can ensure your brand’s data remains safe.
Dependency on Service provider
Using outsourced IT services has many benefits. Unfortunately, it can create a certain dependency on the service provider. Having a business unable to stand independently can alarm many. Why? Because the moment you stop hiring from your service provider, the company may crumble.
That’s why it’s important to ensure the quality of your brand’s independence and use your service provider as a support instead. This will take self-discipline and collaboration, where you can create a partnership between your outsourced employee and your in-house employees. That way, both types of employees can enhance their skills and increase your employee’s capabilities.
Low Morale
Speaking of in-house and outsourced employees, it’s important to take note of the morale of your in-house employees. When hiring a third-party employee it could spark confusion on the part of your in-house employees. Questions such as “Am I not doing my job right?” or “Are they going to replace me?” could surface.
This leads to room for doubt, instability, and even your employees quitting. The importance here is to ensure your employees that the incoming third-party employees are there for support and that their jobs aren’t harmful.
5 Factors to Consider When Outsourcing
If you have decided to commit to outsourced IT services, there will be a few things you need to consider before you choose the third-party company you choose. Keep in mind that there are many outsourcing companies all around the globe, and some may be less impressive than others.
Listed below are five important factors to consider when outsourcing your IT. Once you have an estimate of your limitations and expectations, choosing your partner in this outsourcing journey will be easier.
Size of Business
The important part of choosing your outsourcing is to consider the size of your business. Before you get a headstart in outsourcing, you should ensure whether or not you need it. Some IT needs can be solved simply by your in-house employees.
However, if you find yourself stumped with the overload of maintenance, security, and development, consider how many things you will have your third-party employees do. Checking in on the size of your business can help you give an idea of what your startups can benefit the most.
Big businesses will require heavy maintenance and development. This will require heavier processing and strict cybersecurity. Meanwhile, medium-sized businesses may require less, and startups may require even more.
Once you understand the size of your business and its requirements, it’ll be easier to pinpoint which service providers have your needs.
In-house Capabilities
Outsourced IT services are only required when your in-house IT employees cannot function alongside the growth of your business without risking your IT infrastructure. That being said, keep in mind the performance, quality, and capability of your employees first.
It’s completely possible that your employees can handle the required specialties or necessities your IT structure requires. On the other hand, if you find that your in-house employees are overwhelmed, communicate with them on which areas they need support.
Having an idea of where they need support from their own words while understanding their capabilities gives you an idea of what to look for and where.
Budget
Money makes a big impact when considering outsourcing services. While outsourcing is cost-effective, it does not necessarily mean it’s cheap. Cases wherein outsourced employees can cause a heavy hole in your pocket include specialties, advanced technology, software development, and other IT infrastructures.
That’s why you should consider your budget and how much you’re willing to pay for outsourced IT. There will always be an outsourcing company that fits within your expenses. Especially since you can find service providers all over the world. The important part is to know how much you can spend before investing.
Location
The location of your service provider can make or break your brand’s relationship with them. Hiring offshore service is significantly less costly. However, this could cause miscommunication and delayed production due to the time differences. The question is, can you risk that?
Meanwhile, nearshore services adjust with the time zone while remaining at an agreeable cost. A challenge when utilising nearshore services is communication and cultural differences. What if, in your culture, it’s not a big deal, but to theirs, it may be offensive? These things can cause unnecessary delays in your project development.
The last option, nearshore services, provides the same time zone, same culture, and same language. However, these tend to cost more.
The good news about this is that there are companies from nearshore areas or offshore areas that can give good communication, have similar time zones, and offer the same high-quality production. A great example of this is Australian businesses utilising IT outsourcing in the Philippines. Not only do Filipinos speak English, but they also live in the same time zone while having adopted a Western work culture.
Experience
Now that outsourcing has become a lucrative business more and more companies are beginning their journey to become service providers. Unfortunately, this has led to many inexperienced service providers that have caused more delays, issues, and setbacks compared to actually supporting the companies that hired them.
To defend yourself from the chances of hiring inexperienced service providers, it’s important to research the background of the outsourcing company you’ve chosen. Experienced outsourced IT services in the Philippines, India, and other countries should have testimonials, reviews, and high client satisfaction.
How to Choose the Right IT Outsourcing Provider?
It’s expected that by 2030, outsourcing will reach over 525 Billion USD. That’s a lot of money and a lot of companies investing in their outsourcing companies to provide service worldwide. While this gives you a wide variety, it also poses a new challenge: which one do you choose?
The right IT outsourcing provider will have the expertise, professionalism, reputation, and seamless communication that adapts to your brand’s needs while matching your budget. That means it depends entirely on the factors above which one can fit you the best.
That doesn’t mean you can just choose right away. Consider the values and goals of your brand and if they coexist with the outsourcing company’s methods and values as well. A great example of this is Flexisource IT, which is a flexible IT outsourcing company that caters to its clients as a partner who supports their brand.
Conclusion
We hope you learned a thing or two about the potential of outsourced IT services. More and more companies are opting to transition into remote settings as the years progress. Technological advancement has created an opportunity for a globalised workplace that helps people from around the world collaborate toward a business’s growth.
Find the right partner in your journey as you adapt to the new normal. Contact Flexisource IT to discuss your IT needs and explore our outsourcing solutions tailored to your business now.
