Lowering Cost to Risk Management: Outsourcing is becoming the Backbone of Companies

Outsourcing

OutsourcingGrowing companies are often challenged by the question of how and when they should hire for certain positions and skill sets within their organizations. This then leads to the question of whether or not it’s the best choice to hire an in-house team of employees or if it’s a wiser option to partner with an outsourcing company as a virtual team.

Outsourcing a wide array of everyday business functions has become an incredibly common practice for companies all over the globe. This is due to a variety of reasons, including budget limitations, time constraints, and general operation pressures. The outsourcing of IT is one of the most notable areas to outsource.

As technology has advanced over time, the need for skilled professionals with a wide range of expertise and experience has grown exponentially. IT outsourcing is the solution to this need. By utilizing external providers, companies gain access to a wide variety of solutions for their everyday needs. Some businesses choose to outsource the entirety of the IT staff or department while others choose to leverage these companies as skilled consultants to complement their current internal resources.

 

How outsourcing works

For a company to effectively outsource responsibilities, it is important to focus on the business partnership as much as the logistics. Outsourcing is about managing relationships more than service-level agreements and is a partnership, not a purchasing project. Maintaining and securing a trusted relationship is essential in outsourcing efforts and is more complex than establishing service levels and relationships.

Some experts recommend placing extra emphasis on the exit clause of a service contract. Companies need to know when the contractual agreement inevitably times out and ensure that the involved parties fulfill their obligations and stick around until the contract is up.

 

Reasons for outsourcing

Companies often outsource as a way to lower costs, improve efficiencies and gain speed. Companies that decide to outsource rely on the third-party providers’ expertise in performing the outsourced tasks to gain such benefits. The underlying principle is that because the third-party provider focuses on that particular task, it can do it better, faster, and cheaper than the hiring company could.

Given such benefits, companies often decide to outsource supporting functions within their businesses so they can focus their resources more specifically on their core competencies, thereby helping them gain competitive advantages in the market.

However, some companies decide to outsource for other reasons.

For example, they outsource because they’re unable to hire in-house, full-time employees with the specialized skills and experience needed to perform certain jobs.

 

Benefits of Outsourcing

Extended Resources and Skill Sets – If a business chooses to hire an in-house team to meet their IT needs, the knowledge bases and schedules of those few team members will restrict the company. Outsourcing to a team of a trusted IT provider allows companies to benefit from both availability and additional skills. Experienced outsourcing teams continuously train and hire for the latest technologies and unique skills on the market to meet the needs of their customers. To hire for each required technology in-house would cost an organization an astronomical amount.

Scalability – Additionally, IT outsourcing allows companies to scale as their workload or projects require. Should businesses slow down, their outsourcing team is easily reduced. If something requires a quick turnaround or for a unique project, additional team members can jump on the team.

Security Benefits – Outsourced IT providers train employees to make the best security recommendations depending on the needs of the individual business at hand. They understand which technologies are available, their benefits, and how to implement these advanced tools to best protect the organization.

Most IT providers also provide round-the-clock remote monitoring services to ensure the protection of everything related to the project is running as smoothly as it should be, no matter the time. This is typically impossible for an in-house team. Should an emergency occur, an outsourced IT provider will also be able to provide an expert to help get things repaired and up and running as soon as possible.

Reduced and Predictable Costs – While an in-house team may seem like a predictable cost, factors such as sick leave, vacation time, employee turnover, hardware, and software must all be factored into the price. Outsourced IT teams require a fixed cost regularly for the most part. As outsourcing also means no need for health insurance, employment taxes, training, and recruitment for these positions, costs are also lower than they would be hiring for and retaining in-house employees.

Focus – It isn’t uncommon for many employees to wear many different hats within an organization, especially in the tech world. Outsourcing IT needs means that those IT specialists working in-house can focus on their core tasks while knowing that the outsourcing team has their back.