IT Outsourcing

IT outsourcing is an expression used to describe the method of seeking resources, subcontracting at the outside of an organizational structure for all or part of an IT (Information Technology) purposes.

Definition of IT Outsourcing

IT outsourcing is the practice of external service providers to deliver IT-enabled business process effectively, application service and infrastructure solutions for business outcomes.

Types of IT Outsourcing

  • Offshore Outsourcing
This includes sending IT-related work to a company in a foreign country, such as India, China or the Philippines, which offers political stability, lower expenses and tax savings.
  • Nearshore Outsourcing
This involves sending IT-related work to a company in a country which shares a border with your own. Apparently, this should make travel and communication between the two companies easier.
  • Onshore or Domestic Outsourcing
This involves contracting an external service provider, which is located in the same country as you, to provide IT-related work, on-site or remotely.
  • Cloud Computing
Contracting an external service provider to provide IT-related services over the internet.
  • Managed Services
This involves contracting an external company to provide network management functions such as messaging and call centers, virtual private networks (VPNs), firewalls and networking monitoring and reporting.

Advantages of IT Outsourcing

There are many reasons why companies outsource for services. Here are some of the reasons for it:
  • Reduce and control operating costs
In outsourcing, you can eliminate the costs associated with hiring an employee, such as management oversight, training, health insurance, employment taxes, retirement plans etc.
Advantages of IT Outsourcing
  • Increase the focus of the company
It is impractical and is unlikely to be the fertilizer of all trades. Outsourcing lets you focus on core competencies while other companies focus on theirs.
  • Gain access to exceptional capabilities
Your return on investment is so much higher when you outsource information technology to a firm that specialises in the areas you need. From the knowledge of only one person, you benefit from the collective experience of the IT professional team. IT outsourcing companies usually require their IT staff to have proper industry training as well as certification.
  • Free interior resources for other purposes
You may have someone in your office who is good enough with a computer or accounting, but this is probably not the job he was hired to do. If they are spending time taking care of these things, who is doing what they were hired to do? Outsourcing lets you retain employees for the highest and best use, rather than wasting their time on things that might take them longer than someone trained in these areas.
  • The resource is not available internally
On the other hand, you may not have anyone in your company who can manage your IT needs, and hiring new employees is not in the estimates. Outsourcing can be an alternative that can be implemented, both temporarily and for a long time.
  • Maximizing the benefits of restructuring
When you restructure your company to improve cost, quality, service, or speed, your non-core business functions may be set aside. They still need to be addressed, however, and outsourcing is the optimum way to do this. Do not sabotage your restructuring efforts by failing to follow non-core needs.
  • Functions are difficult to manage or out of control
This is a scenario when outsourcing to experts can make a big difference. But do not make a mistake of thinking you can forget about the current problem that it is being “dealt with.”
  • Create an existing capital fund
By running a non-core business function, you can spend your capital funds on items that are directly related to your product or customer.
  • Reduce risk
Keeping the technology needed to run your business is expensive and time-consuming. Because professional outsourced IT providers work with multiple clients and need to keep up with industry best practices, they typically know what is right and what is not. Such knowledge and experience can reduce your risk of performing wrong decisions.
However, business owners who is considering IT outsourcing function need to know the following risks:

Some IT functions are not easily outsourced

IT affects the whole organization; from tasks that are easy to do every day to complicated automatic aspects. Make sure the external vendors are eligible to take care of your greatest need.

Control may be lost

Critics believe the outsider will not be a full-time employee who is under the same management of another employee. Other concerns include data confidentiality and disaster recovery. However, a knowledgeable supervisor in managing IT staff members is usually required.

Employee morale may be affected

This is true if you are going to place workers to replace their job function with outsourcing firms. Other workers may wonder if their work is risky too.
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You can get "locked"

If vendors do not document their work on your network and system, or if you are forced to purchase proprietary software, you may feel like you can not go anywhere else or restore your network. Many outsourcing companies require you to sign yearly contracts that limit flexibility.

The Rewards of IT Outsourcing

There are many rewards you can expect when you outsource your company’s IT functions as well:
Access To Latest Technology

Access to the latest and greatest in technology

You may be aware of how quickly the software and hardware become obsolete in the industry. How can a staff stay up-to-date with everything? Outsourcing would give you the benefit of having more than one IT professional. And as it is the company’s core competencies, they can give you good advice to put your IT dollars to work for you.
High Quality of Staff

High quality of staff

Given that it is their core competency, IT outsourced vendors look to hire staff with certain qualifications and certifications. You probably do not know what to look for if you hire someone to be a full-time employee, so you may hire the wrong person for the job.
Cost Savings

Cost savings

Outsourcing of your IT services provides financial benefits such as lower overheads, bulk purchases and leasing options for hardware and software, and licenses of the software.
Flexibility

Flexibility

Vendors have a variety of resources available to them, while internal staff may have limited resources and capabilities.
Job Security

Job security and burnout reduction for regular employees

Using an IT outsourcing company removes the burden from your staff who have taken more than he is hired because “someone needs to do it.” You will create better relationships with your employees if you let them do what they do well and what they are hired to do.

Who would need an IT Outsourcing?

IT Outsourcing
IT outsourcing can help small businesses to lower the IT costs and access new technologies. It begins with an understanding that IT operations can benefit from being managed by third-party service providers, which can be offshore outsourced, or somebody based on the beach. Outsourcing enables companies to reduce costs, accelerate time to market, and leverage on expertise, assets and / or external intellectual property.

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IT Outsourcing
Article Name
IT Outsourcing
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WSG are offering IT outsourcing and effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes.
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Wingo Starr Group
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