IT Outsourcing Services

What is IT outsourcing?

IT outsourcing is a popular practice among businesses to hire a third party for managing their necessary IT operations to reduce operational cost, and to achieve maximum profit by accessing great talents across the globe.

This can be short-term or long-term engagement based on the business needs. Whether it’s a start-up or an enterprise company, anyone can hire IT outsourcing services to meet their business standards and goals. The best thing about outsourced IT services is, that it is flexible and can be immediately combined with ongoing projects whether it’s development, ideation, prototype, testing, or anything else.

What IT services do businesses outsource?

Businesses can outsource almost anything whatever they need help with. Whether it’s customer service help, development, designing, quality analysis, upgrading, maintenance, etc.

#1. IT Development services and software development

This helps businesses with technical IT stuff and managing the SDLC phase of the software. Hence they can focus on other priority projects or business tasks.

#2. IT consultancy

If you are a startup or beginning with any new technical service or development project, you can simply hire a good outsourcing company to manage the suitable IT needs and get a guide to get started properly and learn about the challenges and solutions to make things easier.

#3. Managed IT services

Hosting is an important part of deployment. If you are busy with other client projects and don’t have time for timely updating, hosting, and maintenance, hiring IT experts can help you to monitor and upgrade the hosting plans according to business needs.

#4. Infrastructure services

Infrastructure services are the basic building block. This includes software and hardware installation and other network and technical IT services.

#5. Data management, backup, and recovery

Data security is crucial and to continue the business securely, storing it in a safe place is a must. Data experts help to manage the data according to sensitivity and follow standard ways to process it securely.

They also help to recover the data in case of any issues.

What are the types of IT outsourcing?

There are mainly three types of outsourcing models: offshore, onshore, and nearshore. These models are named by considering the distance between you and the service provider. You must choose suitable outsourcing models based on your IT needs, project requirements, location, budget, and type of partnership, and by considering the necessary factors.

Other than this, the way of communication, culture, time-zone compatibility, flexibility, and level of control also matter for a successful business. Let’s explore each model one by one to understand it in depth.

#1. Offshore

Offshore outsourcing means hiring a company or particular professional team from outside the country, the continent, or far away region. As the price rates for outsourcing services vary from region to region, this is a good option if you need affordable service.

Other than this, as you work with different countries, you may face time-zone differences, language barriers, culture compatibility, working style conflicts, and other issues. Hence this model does not offer much flexibility as you don’t have much control over the team outside the country.

Overall language and culture are the secondary factors and can still be managed. The offshore model is beneficial:

• If you are a startup with a tight budget.
• Need expertise for large-scale projects with complex requirements.
• Budget and quality both are priorities.
• If you want to run operations 24*7

#2. Onshore

Onshore is a type of outsourcing model where the company works with a company located within the same country(within the same national borders). This is also popularly known as domestic outsourcing/homeshoring. Most businesses prefer this model because there is no time zone, culture, language, or other differences.

Eventually, when there is a language and culture barrier, half the problem is already solved as the company will have the same holidays, working style, and other similarities between them hence making the project work easier.

Consider onshore outsourcing when:

• When you require close collaboration within a project
• When you prioritize data security
• When dealing with highly complex projects that need face-to-face interaction
• When you need quick response and decision-making

#3. Nearshore

Nearshore outsourcing means partnering with nearby countries or areas (mainly the same zome or a few hours of difference). This has similar benefits to onshore but offers more flexibility as compared to onshore and offshore. Because it allows you to easily travel to the company location whenever needed. Also, the language, time zone, culture, and everything is the same hence it is best to have affordable service with maximum efficiency.

Go for nearshore outsourcing when:

• The time zone is the most important and the team needs real-time communication.
• If you want a balance between quality, budget, and work.
• If you are dealing with an agile project.

Engagement Models of IT Outsourcing

There are five engagement models based on financial factors. Here they are

#1. Fixed cost model

If you have clear project requirements, goals, and timelines then a fixed cost model is a good choice. You pay a particular fee at the beginning of the project according to the pricing plans and then the outsourcing partner starts working on the project.

It is suitable for small and medium-sized projects where you are not expecting much change and scalability in the future.

Note: The fixed cost model is less flexible due to its fixed price rate. Hence if you want to change anything in between ongoing projects, that can be difficult.

#2. Time and material model

This model charges price according to the usage of time and resources used. It is best if you need short-term, complex project modules that involve specific skills or resources. This model goes well with agile projects because of resource usage transparency and changes can be flexibly made at any phase.

Note: it can lead to unexpected costs if your requirements are frequently changed as it will consume more resources and time.

#3. Dedicated development model

A dedicated model is best when you want a team of professional who only works for you with total dedication. Choose this model for large-scale projects to get high-quality results because, with this, you have complete control over the project and access to specialized skills. Market demand can be easily adapted due to its scalable and flexible nature.

Pro tip: make sure you have an experienced project manager and project management tools to carry out dedicated projects in a better way.

#4. Hybrid model

A hybrid model is for constantly changing requirements, and you can customize and combine suitable models according to unique IT needs. This gives business flexibility across all stages but needs careful planning and coordination.

#5. Managed service model

If you want to hand over specific IT services like maintenance, customer care department, infrastructure, network, etc then the managed service model is the one. By outsourcing one of your departments to an outside company, you can free up internal resources and ensure quality work in other areas.

Why IT consulting services is important before going for IT outsourcing?

Most businesses don’t know what they actually want and where to spend. This is where IT consulting services come in. Here is why you should go for IT consulting before going for outsourcing.

1. Get accurate analysis: Consultants analyze your business in-depth and suggest to you the critical areas that you should outsource so you don’t overdo or overspend.
2. Clear strategy development: They can help you create the best strategy for your business that aligns with your objectives for profitable outcomes.
3. Get the latest technology insights: As technology keeps on evolving, experienced consultants can guide you about the best tech stacks for your business operations.
4. Better negotiation: They help you choose the best engagement models and negotiate with confidence with genuine points and experience. This helps to get better deals.
5. Risk mitigation: Consulting service helps to identify risks associated with business, data security, compliance issues, and more to fix the problem before outsourcing.
6. Vendor selection assistance: Consultants help you choose the best outsourcing partner by comparing features, and evaluating proposals and plans to pick the right one.

Reasons why every business should choose IT Outsourcing

Every business has its own reason for choosing IT outsourcing, below are some of the top reasons.

#1. Reduce costs

Investing in IT outsourcing is one of the smartest choices because, with a fixed-cost model, you only pay for what you use. You can save lots of finance because you don’t need to hire, train, or buy suitable resources for the project. Simply pay a one-time fee and focus on other core tasks.

#2. Access special skills and resources

You don’t need to hire a permanent employee on a full-time salary basis for short-term or long-term projects. Whether you need a developer, designer, consultant, tester, QA, BA, or anything else, you can flexibly hire them from an outsourcing partner and scale them as needed.

#3. Minimized downtime

It helps to protect your IT infrastructure from unexpected disasters, cyber-attacks, and vulnerabilities. By hiring professionals, you can secure your business 24*7 and have a peaceful sleep even when you are not online.

#4. Faster-time-to market

In case of suitable deadlines, hiring experts from other regions along with your in-house team makes sure that work is done 24*7. Hence it helps to launch the service or product faster as compared to others.

#5. Top-notch business security

Outsourcing experts know the best strategies to future-proof the business by keeping consequences in mind. By partnering with a reputed agency, you can ensure the best security for your IT infrastructure with remote monitoring, regular software updates, maintenance, and more.

IT Outsourcing Tips: Do’s and Don’ts for Smooth Software Development

Below are some useful tips for having a good outsourcing experience.

DO’s:

• Deep down, you know your business well so first understand the need and goals of outsourcing.
• List down the factors that need investment and the operations that can be handled by you and the in-house teams.
• Research and make a list of outsourcing companies, enquire, and compare to find the best fit.

Tip: Practically, go for nearshore whom you can visit personally, and have a smooth project development.

• Ask them about their security terms and agreement terms.
• Start with a small project if you are working with the company for the first time.

Dont’s:

• Don’t completely rely on the outsourcing company even if they are highly experienced. Stay involved and take regular updates about the project.
• Flexibility is the key. So avoid unrealistic expectations with fixed costs and timelines. Be flexible for quality to achieve good results.
• Culture and time zone differences can cause real pain during emergencies so don’t take this factor lightly.
• Don’t outsource if you can get that suitable job done by in-house experts.