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The advantages of IT outsourcing: why companies increasingly outsource their critical IT tasks

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IT outsourcing has become pretty standard for many companies that do extensive IT development work while attempting to keep up with the changing conditions of contemporary markets.  Outsourcing IT development can give a business greater bandwidth for scaling up while also reducing costs and gaining the ability to focus on the other key areas  for growth such as sales strategy or marketing analytics. But IT outsourcing is a model of collaboration with its own unique considerations. On our blog, we elaborate on the pros and cons of outsourcing tech development and list the things a company must consider to make IT outsourcing work efficiently within the business.

First of all, a company must be clear on what IT outsourcing actually is and in what ways it is most commonly included in modern IT planning. IT outsourcing is the use of third-party resources for delivering information technologies solutions deployed within a company’s business processes. The Pandemic bolstered the practice of IT outsourcing, as many companies moved to remote work environments. With no option for actual in-house IT departments, many business leaders considered hiring external remote developers. There are three main types of outsourcing which companies choose to handle their IT tasks.

Project-Based Outsourcing

This approach involves a full transfer of a project to a vendor. In this case, the external IT team is responsible for all the steps of development and its results, but the client may arrange to oversee parts of the project itself.

Out Staffing

An outstaffing model is often applied to solve specific IT issues within a company's business processes. The client hires talents from an IT provider and pays for the time of employees on an hourly or monthly basis. 

Offshore Office

In some cases, the most suitable way for a company to address its IT challenges is to open a research and development office in another country. Depending on the location, it may be much cheaper than creating a tech development department in the country where the main office is based.

The benefits of IT outsourcing

Now we would like to tell about the valid reasons why many companies has already outsourced IT functions to the vendors:

  1. It cuts costs. Hiring outsource IT talent doesn’t require building workspaces and paying for labor costs. In case of using an offshore office model, companies may also avoid unnecessary  taxes.
  2. It opens opportunities for headhunting global talent. The best employees from all over the world can be hired to work on the project.
  3. It is more professional. A reputable IT outsourcing service has expert knowledge in many IT areas due to the various projects they've successfully completed. Their insight is invaluable.
  4. It allows executive leaders and C-level management have more time for addressing top-priority issues such as diversifying the business or accelerating growth.
  5. It mitigates risk for the company by sharing it with the outsource provider. An outsourcing partner assumes responsibility for what is outlined in the project and guarantees the client specific outcomes.

The disadvantages of hiring outsourcing developers

While there are many benefits to delegating IT functions to an outsource provider, there are some challenges a client may face when hiring a third-party developer. Language barriers, time differences and work habit differences may cause issues or hinder project development. The only way to avoid this is to be careful selecting a vendor.

Choosing a right IT outsourcer

When selecting an IT outsource provider, a company must pay particular attention to the types of outsourced services a vendor offers and the format needed to successfully complete the project and help the business grow. A vendor should have extensive expertise and offer flexibility in project deployment. To ensure a successful outcome, a company should carefully plan how they will employ an outsource provider, taking into consideration security and privacy protocols, and then plan for regular meetings to analyze the vendor's progress and discuss the project's results.


 

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