Outsourcing in IT – advantages and disadvantages

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Outsourcing is now extremely popular in IT. Learn how it works and take a look at models here.

IT outsourcing: in detail

More and more companies that want to optimize costs are using outsourcing or Team Leasing. The delegation of part of the processes to an external company not only enables savings but also the efficiency and quality of the IT service is improved, and significant risks are avoided. How does IT outsourcing work, and what are its advantages and disadvantages?

How does IT outsourcing work?

In short, IT outsourcing consists of delegating some tasks to an external company that specializes in a certain type of services and processes. Organizations take this step for a variety of reasons. Most often, there is a lack of sufficient resources and your own IT infrastructure, as well as the desire to avoid high recruitment costs. Outsourcing can include various activities, such as server administration, computer network administration, troubleshooting, or device maintenance. Outsourcing problematic tasks to a properly selected partner usually help to solve them faster, cheaper, and more efficiently.

However, it is noteworthy that the cooperation with an outsourcer is not to commission tasks ad hoc but is long-term. Companies that use outsourcing usually decide to delegate selected processes permanently or for a predetermined but always long period of time.

Outsourcing models

There are various models and methods for classifying IT outsourcing – advantages and disadvantages also result from the right adaptation to the organization. However, the choice of the right solution always depends on the individual needs of a company: the type and number of processes it wants to delegate, its human and material resources, and the goals the company wants to achieve with it.

IT outsourcing can be divided into complete and selective outsourcing. In the first case, the entire IT infrastructure and its service will be moved to the headquarters of the outsourcer. In the second (and most common) process, specific processes for outsourcing are selected. As a rule, these are not essential tasks for the functioning and development of a company but tasks that require a lot of time and resources and can easily be taken over by others.

The second classification method is the division into employee outsourcing and body leasing. In the first case, it is the outsourcer who builds the customer’s team at the headquarters. In the second case, the company hires specialists with specific competencies to work on a specific project. This solution means that the organization does not have to carry out costly recruitment and then terminate the contracts with the employee after the end of the project. This also reduces the risk of hiring a person with inconsistent competencies, which is often the case with less technologically savvy companies. All formalities then remain with the sending company, and employment in such a model offers great flexibility.

When outsourcing, the location of the company headquarters is also important. This is what makes nearshoring and offshoring stand out. Nearshoring consists of delegating tasks to a place that is relatively close to the customer’s location. In offshoring, the outsourcer’s premises are usually located in a remote place such as India or the Philippines. This option allows companies significant savings, although the geographical and linguistic barriers carry greater risks.

How much does IT outsourcing cost?

It is difficult to clearly define how high the IT outsourcing costs are – the advantages and disadvantages also apply to the costs and their determination. It depends on many factors, such as the chosen model and scope of cooperation, the type of service, the equipment required for its implementation, and the number of employees. As a rule, they are billed on an hourly or part-time basis. Sometimes certain tasks and services are also appreciated. All financial and technical agreements are defined in the form of an SLA document (Service Level Agreement).

However, it should not be forgotten that the most common reason for using outsourcing is cost optimization. Delegating tasks is usually significantly cheaper than recruiting, buying hardware and software, and organizing employee training. It is also necessary to provide workplace and work equipment, a company telephone, a laptop, wage-based services, and the organization of representation in the event of an employee’s temporary absence. Both the skills of team members and the IT infrastructure require constant updating and continuous improvement of performance, which typically takes a significant part of the budget.

Building your own IT team is, therefore, very complex, requires a lot of skills and thus is also risky. According to a precise calculation, it often turns out that significantly better results can be achieved thanks to outsourcing. The tasks are then completed faster, more cost-effectively, and efficiently and the risks of unsuccessful recruitment or the purchase of incorrect devices are reduced to a minimum.

However, in order for IT outsourcing to work efficiently and bring tangible benefits, it is important to carefully select a partner. If you still have not decided to work with a specific outsourcer, contact several professionals: they will help you analyze your needs and suggest which outsourcing model you should choose and what type of company you work with.

Understandably, our article does not completely exhaust the topic, but we believe that it has given you an idea of how to prepare well to use this service in your organization.

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