IT Outsourcing – Best way to offer technology partnership
Let us start with describing what IT outsourcing is: IT outsourcing is the practice whereby a firm hires resources outside of its own payroll in order to handle certain technology verticals. IT outsourcing is usually done when either the firm is looking at starting a new vertical and wants to have experts for it without having to invest in hiring. Another reason for such an investment in software development outsourcing or IT outsourcing is when the firm wants to cut down on its operational and infrastructural costs in general.
The most common types of IT outsourced functions are website development, custom software development and mobile app development, website maintenance, technical support, database development, database management, telecommunications and IT infrastructure support.
A lot of IT firms, be SME (Small Medium Enterprises) or StartUps, mid or large scale, have now taken up outsourcing in some form or the other. While some firms outsource just basic testing, others might as well outsource the entire product development of vertical management. It is obvious that if outsourcing has become such a trend, there has to be something which is driving it. So, this blog talks about the advantages that technology outsourcing has for businesses.
The most obvious benefit is of course cost control itself. Sometimes it so happens that a new vertical or even a new feature has to be developed. In such a case, one can either build all the capabilities in house or outsource it. Also, sometimes such requirements aren’t permanent or get significantly reduced over time. In such a case, building a permanent capability in house doesn’t make any practical sense. Outsourcing however can solve the purpose by becoming a limited time development project followed by a maintenance one, the cost varying accordingly.
In addition to this, one can monitor the kind of resources being added, how many of them have to be added etc among other factors. Also, it goes without saying that the firm which will be finally selected for the project would be the one within the budget. Thus, cost control gets guaranteed.
Reduced Operational costs
Technology experts or even the staff for certain technologies such as the emerging AWS or Azure cloud technologies, machine learning etc have their resources coming at really high prices. Now, not every firm would want to invest so much in these resources. The reason for this reluctance could be purely strategic or even budget related. However, the work cannot and should not stop because of these constraints. In such a case, outsourcing comes to the rescue again.
Trained and Qualified Resources
It is not necessary and also, practically not possible that one person would be qualified enough to handle each and every project. Plus, sometimes, when bidding for bigger projects, certain qualifications are required to have in the team. In such a case, outsourcing becomes a better option to go for because one gets a pool of qualified, certified and trained candidates to choose from.
Multiple Capabilities in One Place
An outsourcing firm is in business because it can offer multiple capabilities, all at one place. Irrespective of the kind of experience that would be required, the number of resources required, the type of the project being done and hence the infrastructure for that, an IT outsourcing firm provides all of that, all under one roof.
Most of the technology outsourcing firms take the projects on a time bound basis and hence whatever implementation or development needs to be done is done in a time bound manner. It is not surprising that a lot of IT outsourcing firms take up the projects on an hourly payment manner too i.e. they get paid for the number of hours put in. Such a step further ensures that the tasks or the project gets completed on time.
Project Based Focus
Unlike an IT company where a team is responsible for looking into so many verticals, which may be some time not even related to each other. An IT outsourcing company on the other hand has dedicated teams to handle projects related to specific verticals. Such team selections are done on the basis of the capabilities of the people involved.
Now every business has a certain amount of risk involved. Be it the risk from changing markets, upcoming competition, government regulations, changing technologies or financial situations, all of these need to be managed. All the technology outsourcing providers assume and take care of these risks for your business. Plus, the kind of expertise that they have, puts them in a better position to strategize for the project.
Level the Playing Field
There is a huge gap in the resource capabilities of small and medium firms and the larger ones. Outsourcing their technology processes helps small businesses to compete with their larger counterparts without having to unnecessarily bear the brunt of adding costs.
Compliance and Security
There are several things that a firm needs to take care of other than just development. There are questions about the security, installation of DMZ, workstation auditing, PCI security standards etc. An IT outsourcing firm can easily take care of all these as well. Thus, all you need to worry about is the coordination and maintaining a basic understanding of how well the work is going. Rest all would be taken care of by the technology outsourcing company.
While technology outsourcing has a lot of benefits, we feel that as a responsible firm, it is our duty to also enlist the probable risks one should factor in. The three major ones are mentioned below
The firms should clearly lay out points about the availability or the number of hours to be put in. An IT outsourcing company does not sit in your compound and hence coordination can be tough sometimes. It is important that all the monitoring clauses are thus well noted in the agreement to avoid any clashes or arguments at a later stage.
Loss of Personal Touch
It goes without saying that any day it is the internal team which knows the vision of the firm and the ideas for the product better. However, it is not easy to share knowledge or hand over to somebody. Hence, it is important that the KT (Knowledge Transfer) is done well.
Substandard Security Protocols
This is especially important while dealing with offshore IT companies because security protocols aren’t really universal. They vary with every nation and while at some places these would be lax, at other places these protocols would be super stringent, so much to even create a huge entry barrier. Hence, while you choose an IT outsourcing company, make sure they are well versed with the geographies you are looking at for your project.
In today’s digital world, any business that wants to remain competitive must rely on strong IT support. If you’re planning your IT infrastructure, you may be tempted to think that maintaining an in-house IT department for all technical support and services is the way to go.
However, the advantages of outsourcing can be considerable. This is especially true if you are running a start-up, or a mid-sized company seeking to grow.
A Final Look
Given how fast the world is pacing right now in the digital domain, it becomes a tempting proposition for the firms to go for developing resources in house. However, that might not be such a good idea. But, that doesn’t mean that it wouldn’t be.
Hence, to conclude, we would say that before starting head on towards either of these approaches, sit back and think of not just the long term but the short term too.