The world of business, online transactions, and computerized technology is a fast-paced one, with new innovations and problems arising seemingly every day. As such, it can be difficult to keep up with everything by yourself, particularly if your company is already busy with clients, data, and revenue.
Finding the time or budget to maintain an in-house IT team for the sole purpose of maintaining your infrastructure and operational strategy can be a stretch for some companies.
If keeping a fully-staffed IT department is not feasible for your business, then looking into outsourcing such work might be right for you. For a full and in-depth discussion on IT outsourcing, its intricacies and benefits, and how it can work as a pathway to corporate success for you, keep on reading!
What is
IT Outsourcing?
To begin with, it’s important to understand exactly what we are talking about when using the phrase “IT outsourcing”. To summarize, this refers to the practice of employing service providers who are external to your company, specifically to handle the technology and IT concerns or issues that you and your employees might run into. In addition, a managed services provider is a partner and can help elevate your technology strategy and help you drive business goals.
There are many choices when it comes to outsourcing services from a business, with IT being only one of the options.
You might also outsource individual duties, such as payroll processing, human resources tasks, manufacturing processes, or bookkeeping.
And for anyone who provides such services, the IT market is particularly lucrative: an outsourced IT support worker in the U.S. can anticipate around $47 thousand annually, and a specialized systems analyst technician can earn about $85 thousand.
An outsourced IT support worker in the U.S. can anticipate around
A specialized systems analyst technician can earn
As a whole, the entire IT outsourcing industry has been growing at a rate of 5% since 2020, and is projected to achieve an impressive $486.16 billion in USD by 2024!
in USD by 2024!
In many cases, IT considerations are not the main focus of the business, and rather form an offshoot that needs to be handled when things go wrong, so keeping a full team on-staff is not only a waste of money, but it also diverts attention from the core of the business.
All of these aspects are important to keep in mind as we progress through a discussion on why you should consider IT outsourcing and how it can positively affect your company.
Now, let’s delve into some of the more specific types of IT outsourcing and what they mean for your company’s reliability and overall performance.
Different Types
of IT Outsourcing
Not all IT departments are created equally or with entirely the same specializations, so it should come as no surprise that there are a variety of different types of IT teams available for outsourcing. It varies depending on the location of a company, the distance, and the types of jobs an outsourced IT team is expected to complete.
No matter the type of IT outsourcing you choose, the entire industry continues to grow exponentially. The global IT outsourcing market stays strong and looks forward to a CAGR growth rate of 2.6 in the next seven years, taking it from $342.9 billion in USD to a whopping $410.2 billion in 2027.
With growth rates of this magnitude, it’s no wonder that companies choose to rely on the expertise and professional services provided by the excellent IT outsourcing that is offered across the world.
The Core Types of IT Outsourcing Services
There are a few primary types of location-based IT outsourcing, depending on how far removed the IT support team is from your own business. These types range from IT support that is close to home to teams that could be halfway around the world!
Recently, the nation ranked first out of other countries in a Tholons Digital Nations report, in terms of tech support and IT-based remote services.
So, it goes to show that outsourcing your company doesn’t have to reach the other end of the globe— there can be plenty of options right on your doorstep.
To better understand this practice, the following are some brief introductions to the core types of IT outsourcing services that are available to your company, should outsourcing be the route that seems best for your business.
Other Types of IT Outsourcing Services
Below are the main three categories of location-based outsourcing for IT, you can also choose to delegate outsources for more specific or individual tasks for your company. Let’s look at some of these options.
Business Process Outsourcing (BPO)
One of the more popular ways to outsource, BPO involves third-party services that can assist a company in any type of business functions— simple, complicated, multi-tiered, etc., it’s that third-party provider’s job to handle whatever is assigned to them.
Such processes typically include backend or front-office operations.
While this might seem fairly trite in the scheme of things, the business process outsourcing industry is one of the strongest up-and-coming markets, projected to reach over 405 billion in USD by 2027.
Co-Sourcing
When outsourcing takes the form of multiple clients or businesses and one provider, that is known as co-sourcing.
This is an interesting method of getting exterior sources, and can be slightly restrictive in terms of responsibility, but can benefit your business in the long run.
Information Technology Outsourcing (ITO)
This is a more umbrella-like term for outsourcing your IT department and covers aspects of a third-party provider handling things like updates, software support, infrastructure, and maintenance.
In other words, managing more day-to-day operations of your company’s inner workings.
Multi-Sourcing
As the name suggests, this refers to using a variety of outsourced functions to aid your company.
It depends on what your company needs, and the vendors available to meet those requirements.
Project Outsourcing
When businesses need to rely on external experts for help with an entire job or task, that’s where project outsourcing comes in handy. Projects can include content creation, marketing, website design, and much more— whatever a company doesn’t have the time, in-house budget, or proper personnel for.
The Business Benefits
of IT Outsourcing
of other companies delegating services
Did you know that the United States makes up most of the outsourced services in the world, with up to nearly 68% of other companies delegating services? With statistics like that, it’s no wonder that people find many advantages to relying on an outsourced IT service provider for their businesses.
Let’s take a moment to look at some of the most important benefits that come from engaging an outsourced service for your IT needs.
Cyber Security Compliance
IT teams make sure your infrastructure is safe from cyberattacks and malware, so bringing in an expert team to handle your security compliances is essential to keeping your business safe.
Firewalls, updates, security protocols, and vulnerability scans are all maintained and monitored by IT workers. And you don’t want company revenue information or client data falling into the wrong hands by having an outdated security system!
Financial Savings
Outsourcing services can help you save money on business costs.
In general, companies can expect to reduce expenses by 20% to 30% when using outsource providers. This includes savings on labor, training, and housing an entire department of IT workers within your business itself.
Navigating Time Zones
Working around some time zone differences can be problematic and make a job take longer.
But if you find an outsource provider to complete necessary updates and fixes during the off-hours of your business— thanks to their time zone— you can take advantage of the difference and benefit from it.
New Technologies
Not only does outsourcing IT support services provide you with a variety of new technology options to choose from, but these innovations can also be implemented even quicker by the experts within that IT role, leading to savings and better operations.
Saving Time
Once your business relies on outsourced IT services, you no longer need to worry about the time it takes to train and implement your own in-house IT department. Instead, third-party IT experts and specialists can handle any task quickly and professionally.
Skilled Resources
Being open to worldwide third-party IT service providers means that your business will have access to a wide pool of experts in various aspects of Information Technology, security, and overall infrastructure performance.
Steady Workflows
Setting up a productive schedule with your outsourced IT team means that you can anticipate uninterrupted workflows, as tasks and updates can be completed when you are not busy with clients or products.
Trained Expertise
For anyone not trained to specialize in IT, it can seem like a daunting field. However, with outsourcing this service, you don’t have to worry about training people or trying to navigate the complexities yourself— there are trained professionals for that!
Upscale Mobility
Without the hassle of doling out clients and projects within a limited team setting, your outsourced IT service can help you scale upwards quickly and efficiently, avoiding unnecessary time spent on training.
The Challenges
of IT Outsourcing
While the benefits of IT outsourcing are certainly prevalent in any decision-making that a business might have to tackle when determining if such a service is right for them, it’s also important to look at the challenges that come with engaging an outsourced IT provider.
Here are some issues that you need to keep in mind when navigating third-party IT outsourcing.
- 1 Navigating Outsourcing Deal Lengths
- 2 Selecting The Right Outsourcing Provider
- 3 Signing The Right Service Levels Agreements (SLAs)
Navigating Outsourcing Deal Lengths
Contract lengths with any vendor or third-party provider can be a difficult process to hash out, but it’s one of the first things to consider when finding outsourced IT help.
From freelance terms to 10-year long contracts, the outsourcing market offers a variety of options for deals, and it can be overwhelming until you step back and consider carefully.
Selecting The Right Outsourcing Provider
In any industry, choosing the right company to assist you in running your business operations is a difficult choice with much riding on it. Whether you are choosing one vendor or multi-sourcing your processes, it’s important to take time, consider your options, and make a decision based on long-term impact and profitability.
Signing The Right Service Levels Agreements (SLAs)
This agreement is essentially a contract of what the outsourced IT provider will and will not furnish your business in terms of service, but there can be some hidden intricacies to these documents, as well.
Make sure all penalty fine print, security clearances, and deadline information are expressed clearly and without possible loopholes in the text that could be exploited, either by accident or on purpose.
What Are the Key Concerns
When Considering To Outsource IT?
No matter what, you will run into some key factors and concerns when determining whether or not to outsource your business’s IT department. But that shouldn’t deter you from making the choice to switch to an outsourced form of IT services, if it is what will benefit your company in the long run!
Let’s go over some of the more pressing considerations that could arise when weighing the advantages of a switch to IT outsourcing.
Comparing Providers
As with choosing any other service, it’s important to compare providers and carefully weigh the pros and cons of each before making a final decision.
And with IT outsourcing, this is more important than ever! The fate of your company’s security, infrastructure, and outreach are all in the hands of an IT department, so making the right choice is essential to maintaining the highest business standards.
Costs Incurred
One of the primary factors to consider for your IT outsourcing is the cost— while you don’t want to go with the cheapest service that might not provide what you need, the most expensive option might not be the best, either.
Factor In Risks
Whenever you outsource a project or part of your infrastructure, there is always the risk of the third-party service taking ownership of it or making a grave error in their proceedings.
Make sure you know the risks of outsourcing and act accordingly.
Flexibility
An ideal outsourced IT team should be able to approach a problem with your database or infrastructure issue with a level of flexibility and openness to finding the right solution, even if it requires thinking outside of the box and trying some new techniques. Adaptation is key in this line of work, so keep an eye out for that.
Inspect The Tech
A good, outsourced IT service will have state-of-the-art technology and all the gadgets, software, and expertise needed to bring your company’s infrastructure up to date, so make sure that is indeed the case
And with IT outsourcing, this is more important than ever! The fate of your company’s security, infrastructure, and outreach are all in the hands of an IT department, so making the right choice is essential to maintaining the highest business standards.
Service Level Agreements (SLAs)
As with choosing any other service, it’s important to compare providers and carefully weigh the pros and cons of each before making a final decision.
And with IT outsourcing, this is more important than ever! The fate of your company’s security, infrastructure, and outreach are all in the hands of an IT department, so making the right choice is essential to maintaining the highest business standards.
Team Coordination
Whether you are outsourcing onshore, nearshore, or offshore, all teams should be able to work together as seamlessly as possible.
Vendor Reliability
Always check out reviews or available metrics on your chosen vendor’s services before signing a contract.
This includes their personnel availability, downtime resolutions, backup locations, and data protection methods, among other factors.
Work Delivery
If you are outsourcing to improve your company’s performance and overhead, make sure the IT service will deliver services promptly and without having to be chased down to complete a job.
What is the Future
of IT Outsourcing Services in 2022?
By simply looking at the figures, it seems certain that IT outsourcing is only going to grow in potential and market dominance over the coming year and well into the future. There is no end to the businesses opting for outsourced IT services, particularly after the Covid-19 pandemic has continued to sweep the globe.
In fact, about 95% of IT experts have found ways to redefine technological priorities since 2020 and continue to find further innovations in their way of completing services.
This is particularly important as remote work and access from home continue to be prevalent, including new cloud computing tech innovations that are projected to reach $760 billion by 2027.
Let’s look at some other metrics for IT outsourcing expansion in the near future.
Contract Alterations
As with choosing any other service, it’s important to compare providers and carefully weigh the pros and cons of each before making a final decision.
And with IT outsourcing, this is more important than ever! The fate of your company’s security, infrastructure, and outreach are all in the hands of an IT department, so making the right choice is essential to maintaining the highest business standards.
From Single-Vendor to Multi-Vendor
The shift here completely embraces digital transformations in the new age of business, and it also affects how companies approach outsourcing.
Instead of relying on one provider, accessing multi-vendor services for a comprehensive approach is becoming more popular.
Increased IT Outsourcing
With its vast popularity among businesses and corporations across the world, it’s no wonder that IT outsourcing is one of the fastest-growing industries today.
Its market value is projected to hit US$425.19 by 2026, meaning that companies will continue having the option of outsourcing to more and more specialized vendors.
Instead of relying on one provider, accessing multi-vendor services for a comprehensive approach is becoming more popular.
Increased PWA Abilities When Outsourcing Vendors
Instead of typical mobile device applications, companies seem to be showing a preference for PWAs or progressive web applications to help expand their business outreach and accessibility to even more customers.
This is an interesting trend, as it requires IT outsourcing teams that can adapt and handle this type of infrastructure, as well as the typical needs of a business, such as cybersecurity. And as such, more IT services are becoming proficient in PWA technology to meet the demand.
Quality-Focused
It should come as no surprise that outsourcing your IT work needs to come with high-quality returns, but that is more important now than ever.
As the world’s digitalization becomes spurred on by the continuation of Covid-19, the quality of IT service must overcome all previous standards and continue to make innovations to keep everything running smoothly.
Strategic Working and Collaboration
With more concentration put into defining the relationship between a business and the outsourced provider, there is a real change in the way two companies can work together.
This includes strategic relationships and relying even more on entrepreneurial startups to push innovations forward.
The Rise of Co-Sourcing
As a system that allows your third-party service vendor to work more closely with your business itself, co-sourcing is rising in popularity for its fostering of solutions side-by-side and sharing knowledge between the company and an IT outsourcing team.
Workflow Transparency
For any relationship, business or otherwise, trust and transparency are essential to making it work in the long term. And it’s no different for the connection forged between your business and the IT outsourcing service that you choose to use.
Instead of using the removal of distance or simply being a vendor hired to your company, the newest changes in IT outsourcing mindsets seem to approach the relationship a little differently— trying to work within the embrace of a business, rather than at arm’s length.
This means greater transparency, truthfulness, and the fostering of deep trust bonds that will keep the connection strong and the provision of services honest.
Why Do Companies Outsource
Their Tech Support?
At this point in time, about 54% of companies polled are outsourcing some of their corporate work, including for IT needs. That’s already a large amount, and the number just keeps on growing every year.
But why would you want to outsource from your company?
Well, it’s been a long-established practice to reduce labor costs and in-house considerations, something that helps to focus revenue and budgeting more succinctly on other personnel that are integral to the company.
And it means that a business does not have to worry about spending time or resources on training their own IT department— something that can take quite a while to attain the right specializations.
Overall, IT outsourcing is so prevalent because it frees up resources for companies, reduces costs, saves time, and brings many other advantages with its service, far beyond a simple software update or security fix.
What Are Signs a Corporate IT Department
Is Being Outsourced?
If you have a business that has not yet outsourced its IT services, there are certain signs to look out for that it’s time to sign that contract and use a third-party vendor to handle your IT needs. The following are five of the most prevalent signals that IT outsourcing is on the horizon:
As your company expands and progresses, you might notice existing IT abilities being left behind. This becomes problematic quite quickly and will cost you time and money.
If your systems are not fully up-to-date, and you don’t even know where to begin, it’s likely time for some external assistance. Don’t let your technology trail behind and cause you problems in the long run!
Once you start to get overwhelmed by juggling both the IT part of your company, and the front-end business side that deals with customers and revenue, it’s time to bring some extra hands in with outsourcing your IT.
From firewalls to backups, security privileges to vulnerability checks, safeguarding your company’s financial data, user accesses, and private information is essential to keeping any business afloat.
If you notice a slowing effect on your business’s infrastructure, whether it’s in terms of customer outreach or issues with high website volumes, such impacts can be detrimental if left untreated.
Finally, when downtime becomes so prevalent that you are not only losing hours to infrastructural issues, but also revenue, it’s time to go down the route of IT outsourcing for the betterment of your company.
IT Outsourcing as A Tactical Path To Business Success:
In Conclusion
If you have a business that has not yet outsourced its IT services, there are certain signs to look out for that it’s time to sign that contract and use a third-party vendor to handle your IT needs. The following are five of the most prevalent signals that IT outsourcing is on the horizon:
This is not a niche market either: the entire Global Transformation Market and IT sector is expected to soar to over USD 1,009 billion by 2025, thanks to constant innovations, business demands, and a CAGR of 16.5%. It means that no matter what, it seems that the option of outsourcing your IT department is here to stay!
in USD by 2025!
IT outsourcing also comes with a variety of benefits for your company, depending on the type of outsourcing that you opt for.
For more information on how outsourcing your IT support can benefit multiple aspects of your business, contact our team at New Charter Technologies today and discuss your options!
