IT outsourcing is a model of business that involves two parties. One of the parties is a company that is looking for specific IT services and is willing to pay the price for it. The other party is the service provider that holds expertise in a variety of IT services. It is a give and takes business relationship like all the others that we know of. However, the size of the company seeking expert IT services doesn’t matter in outsourcing.
Whether you are a large enterprise, a small company, or a startup, you can hire an IT outsourcing company to help you with certain aspects of your IT infrastructure.
Over the years, IT outsourcing has become a popular way of filling the technology gap that a lot of businesses suffer from. No wonder we have seen a sudden rise in the companies investing more money in IT outsourcing, especially in hiring software outsourcing company for building high-quality software products. The amount of investment that comes from large companies is slightly higher than what it is from medium and small companies. It means that larger businesses more quickly understand the benefits of IT outsourcing than their medium and smaller counterparts. The size of the IT outsourcing market reached a staggering $85.6 billion figure in 2018, and it is only expected to grow further in the time to come. There are several reasons why businesses choose to work with IT outsourcing companies – reduction in costs and access to a diverse pool of talent are only a couple of those.
Different Types Of IT Outsourcing
IT outsourcing provides businesses with other possibilities that they can make use of without worrying about limitations based on market or location. It is especially great for businesses that don’t have in-house software development expertise. They can hire a software outsourcing company at only a part of the cost associated with hiring a full-time employee to fill this gap. There are different types of outsourcing, depending on the location from where these services are offered. Let us take a look at these.
- Nearshore IT outsourcing: This type of IT outsourcing involves a company based in one country that hires another company located in one of the neighbouring countries.
- Onshore IT outsourcing: In this type of IT outsourcing, a company hires another company that is located in the same country for their IT expertise.
- Offshore IT outsourcing: With offshore IT outsourcing, companies can hire another company or individual located at least five time zones away from them. It is one of the most popular forms of IT outsourcing as it allows businesses to get IT services at a much lower cost.
It is essential to know these differences for making the most out of your outsourcing partnership with another company. Let us now turn our attention to a few critical benefits of IT sourcing.
Benefits of IT outsourcing
The benefits that you will experience from your association with an IT outsourcing company will depend on your business objectives, budget, and the type of IT services you are looking for.
- One of the most significant benefits of IT outsourcing is how it allows you to bring your IT costs down. It is especially true for offshore outsourcing. When you hire an IT outsourcing company from a developing country, you are likely to save a lot more money than what you will be able to with a nearshore or onshore outsourcing. The cost of outsourcing, no matter what type you choose, will always be lower than setting up an internal team. With outsourcing, you neither have to pay a fixed salary every month nor pay for additional benefits. IT outsourcing is especially beneficial for startups and small and medium-sized businesses that have a limited budget to work with. They can use the money that they save in improving internal operations.
- IT outsourcing helps in saving time. IT tasks like maintenance and support amongst others consume a lot of time. When you outsource, you save a lot of your time in setting up teams to handle these tasks. At the same time, your team that you were going to align those tasks will be able to focus on other essential things.
- Another benefit of outsourcing is the talent that you get access to. Some tasks require special skills. If you don’t have such talent in-house, you will likely have to pay a lot more money in hiring a resource that possesses those skills. With IT outsourcing, you have the benefit of working with talent of different skill sets at a fraction of the cost.
This guide can prove useful for all those businesses that are planning to outsource IT tasks to a company with the required expertise.