When you should do outsourcing IT functions

outsourcing-it-functions

Whether or not you should do IT Outsourcing is still a contentious issue that cannot be resolved in a single day. However, there are some instances in which you should strongly consider outsourcing IT functions for your company.

1. Outsourcing IT functions to reduce cost

When it comes to IT outsourcing, it is often recommended that you outsource functions that are simple to train and specialize in. It not only assists you in obtaining IT professionals with advanced skills, but it also saves you a significant amount of money due to geographical pricing.

Because of the impact of Covid-19, the economy’s primary focus is now on the numbers, cost savings, and overall profit. As a result, when you choose to outsource your IT operations, cost reduction is becoming increasingly important. According to a Deloitte survey, 70% of participants said that cost reduction is their top priority in IT outsourcing in 2022. Those who have used IT Outsourcing have saved an average of 40% using this method.

Outsourcing IT functions - Cut costs
Outsourcing IT functions – Cut costs

To be more specific, IT Outsourcing can help you save money on labor, recruitment, infrastructure, and operations. Hiring a software engineer in the United States, for example, would cost approximately $157,570 per year, including taxes. The cost of using an outsourcing vendor, on the other hand, is reduced to $50,000 per year.

According to a Clutch survey, 26% of companies outsource primarily in the hopes of working with an expert, demonstrating how expertise is a valuable commodity for small businesses.

2. Little technology expertise

According to a Clutch survey, 26% of companies outsource primarily in the hopes of working with an expert, demonstrating how expertise is a valuable commodity for small businesses.

Outsourcing IT functions - Benefits
Outsourcing IT functions – Benefits

Because technical work is frequently temporary, many businesses do not have the time or resources to recruit and retain IT staff. Subject-matter executive recruitment is difficult, especially for a company with little to no reputation, because the project may not be appealing enough, or the scope of work is limited with no room for expansion.

When you choose to outsource IT functions, you gain access to a large talent pool with extensive experience and expertise. These individuals have already received extensive training and certifications for professional development, allowing you to benefit from the perspective of an expert. Aside from that, you can use a variety of technologies and get help whenever you need it.

3. Speed up time-to-market

The current pace of the IT market is becoming increasingly rapid. People now expect constant updates with new features, faster releases, and so on. To meet these increasing demands, software developers must take steps to reduce time-to-market, and IT Outsourcing is the perfect solution.

Outsourcing IT functions - Quick time to market
Outsourcing IT functions – Quick time to market

So, how can IT Outsourcing help to reduce time-to-market? This is why:

  • You can outsource multiple IT department functions at the same time. You can, for example, outsource software development to one vendor and software testing to another. Because the development and testing processes can be completed concurrently, the wait time is reduced, resulting in a faster time to market.
  • You do not need to spend time training new recruits because the outsourcing vendor has already done so.
  • When you outsource your IT functions, you are working with experts. Their expertise and experience will significantly contribute to the project’s completion date.

4. IT Recruitment Struggle

When it comes to building an in-house IT team, one of the most difficult challenges has been IT recruitment. You may encounter the following issues:

A limited pool of local talent

The talent shortage is a serious concern. According to the Bureau of Labor Statistics, the shortage of IT engineers in the United States will exceed 1.2 million by 2026. So, in order to recruit a sufficient number of team members, you must look for IT talent in other regions, preferably Asia and Eastern Europe.

It takes far too much time and effort to attract talent

Employers must do a variety of things to impress and thus attract talent, such as employer branding, training programs, benefits, and so on. Building these can take years, and many businesses lack the necessary resources and time. As a result, they outsource the recruitment process to a third party to relieve them of the burden of the hard work.

Outsourcing IT functions - Avoid struggle with IT recruitment
Outsourcing IT functions – Avoid struggle with IT recruitment

The cost of maintaining an in-house IT team is prohibitively expensive

Aside from the relatively high salary, employers must also provide benefits, healthcare, and sometimes housing to ensure that the talents stay with them. Again, it is very expensive, so many businesses cannot afford to do it and must outsource it to a third party.

A high rate of turnover

Sometimes a company simply cannot guarantee that its employees will remain with it indefinitely. Especially in the IT industry, where talent turnover is extremely high, disrupting the entire project. However, when you outsource IT functions, you can replace that staff member in as little as one or two weeks. The vendor will be in charge of finding you suitable IT talent.

5. Management takes far too much time and effort.

What can you do when you have a large IT workload but the majority of it is non-core functions? Outsourcing is the best solution for you.

Outsourcing allows a business that is overburdened by its workload to delegate some tasks to outside parties, allowing it to focus on the core functions. Third parties play an important role in this case by acquiring the tasks.

Outsourcing IT functions - Effective management
Outsourcing IT functions – Effective management

You and your staff will not be bogged down by non-core activities if you use IT outsourcing. For example, before beginning a project, you would normally need to conduct technology training sessions to provide the team with the necessary information and knowledge. This training process can take days, if not weeks, at times. This can be reduced to a few days with a third-party team that has well-trained staff with expertise and experience because they only need to spend time on the requirement analysis.

Indeed, it may give your in-house team more time and energy to focus on their actual work. The money that could have been spent on recruitment or training programs is now being used for other important things like facilities or marketing campaigns.

6. There are far too many minor IT functions.

Technology can refer to difficult programming languages or technological breakthroughs that can have a significant impact on the performance of your business. However, it can also refer to non-core, low-importance IT functions that are not required for every business’s core operations.

Outsourcing IT functions - Unimportant functions
Outsourcing IT functions – Unimportant functions

Data centers and cloud storage, for example, are frequently regarded as non-core functions that should be outsourced because they have no bearing on the company’s strategic operations.

Your company gains the following benefits by outsourcing these minor IT functions:

  • Delegated them to experts who can actually make them work more efficiently
  • Avoided time-consuming and tedious tasks that add no value
  • Placed a greater emphasis on strategic functions

To summarize

Outsourcing IT functions is a difficult decision for any business owner to make. However, if your company is struggling with IT recruitment, IT costs, non-core operations, time-to-market, a high turnover rate, or subject-matter expertise, you should begin thinking about IT outsourcing right away.

If you have more questions about IT outsourcing management, you can contact Lotus QA expert for more information:

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