IT outsourcing is when a company hires a third party or person for software development outside of the in-house structure to save costs and control all the processes. In IT outsourcing, companies hand over task implementation to the partner and your job is to keep an eye on things.
IT outsourcing can be done in two ways, you can do it outside the country or within the country. There are three main types of IT outsourcing services.
3 types of IT outsourcing services
There are three types of IT outsourcing:
- Onshore
- Nearshore
- Offshore
Offshore Outsourcing
One type of IT Outsourcing is Offshore outsourcing, which is a place away from the place of client usually based in various terrain or mainlands. However, it was chosen as an offshore terminus as it satisfies business needs to optimise the overall enterprise process. This type of IT outsourcing needs to increase the budget to recruit resources from a multinational pool of monthly or hourly charges. There are several occasions in offshore outsourcing when one needs outsourced IT support.
In this type of IT outsourcing, time overlap is a huge advantage during e-meetings and internet calls, and different business time zones play a key role in remote work. The responsibility majorly goes to the outsourced IT services team for the project quality and performance.
Nearshore Outsourcing
Another IT outsourcing is Nearshore outsourcing, which is the outsourcing location which is the closest geographic location promising easier operations. The outsourced projects are carried out by the citizens of the home country or they can also move to the nearby country for IT outsourcing services. In nearshore outsourcing, the outsourcing countries within the restricted vicinity are chosen with fundamental objectives such as travelling whenever desired and it is easy to fly. The culture and method of Nearshore outsourcing are very similar to other models.
Onshore Outsourcing
In this type of IT outsourcing, companies work with other software developers in the same land. Any type of company meeting will be between two corporations based in the same geographic territory. There is a huge demand for such IT outsourcing services types as it decreases the travelling cost and saves time. Global companies mostly prefer the Onshore outsourcing model as the same time zone and reduce cost. There wouldn’t be cultural differences which include the same type of holiday list, working method, and people.
IT outsourcing benefits
Companies are outsourcing their IT functions for different reasons. A few are listed below.
Another question that might appear to your mind is why companies choose to outsource IT functions for varying reasons. Some of the key benefits of IT Outsourcing are mentioned below:
Reduced IT costs
The major benefit of IT outsourcing is it turns fixed costs into variable costs. This means the payment of enterprises used to pay only for the resources and the time they use outsourced IT support. The cost incurred while hiring a full-time employee via outsourced IT services, includes insurance, employment taxes, and retirement plans.
Global selection
There are chances that the person you are trying to find in your region may be found somewhere else. IT outsourcing can play a pivotal role in help you hire IT professional who offers more abundance of possibilities for your business. You can outsource talents related to specific niches and skill sets required in IT outsourcing services.
Someone may not be available internally who is ready to take on the challenges that your IT company might be looking for. Many small enterprises require engineers’ outsourced IT support and some technicians to quickly hire internal personnel. In such situations, outsourcing is a perfect option to rely upon.
Implementation
Another advantage of IT outsourcing is getting expertise on your new project immediately. If your business doesn’t have a big IT team, you can start implementing your programs through quickly outsourcing rather than finding a person internally.
Security
Some companies believe in outsourcing their cybersecurity to this party as such teams who lack security personnel can outsource and get threat intelligence, detection and response running in no time.
However, one thing which comes with it is that IT outsourcing has some risk involved in it as in this process your partner has a different time zone and can’t respond immediately to alerts. In the IT department, outsourcing an IT function comes with security risks, which can share partial or complete resources with a third party and compromise with your data and network.
IT outsourcing disadvantages
As you have seen plenty of advantages of IT outsourcing, but it does have some disadvantages, which you will get to know here:
Language barriers
Many IT outsourcing firms work in different countries, and language is the biggest challenge there. It also makes the relationship a little complicated with outsourced IT services providers. This can hurt the project when a problem or solution is required. However there is a lack of communication between the employee and the outsourced IT support vendor.
Time zone differences
The time zone is another barrier as the person you are outsourcing resides in a place which has a completely different timezone and he is not able to respond to outages or potential cyberattacks. If team members are not constantly available to avoid the potential threat then there is no use of IT outsourcing.
Decreased quality
There are chances that IT outsourcing reduces work quality despite investing time in filtering potential vendors. Not all outsourcing parties offer high-quality services. Even the company can often struggle with their outsourced IT support which is insufficient work and wastes a lot of time and money.
Compliance threats
The compliance of business also depends a lot on third parties. As every single vendor works with can make the business non-compliant. It can potentially break the GDPR and other company’s regulations which is not a good sign for businesses who outsourced IT services.
Security
These IT outsourcing vendors can share the company’s internal system or important data with third parties and this makes such vendors highly unsecured.
Strap
IT outsourcing is the process of onboarding an external service provider for the purpose of completing a project. Here is all you need to know about outsourced IT services.