Software Development
Guide to Outsourced IT Services
Companies are outsourcing IT services as a strategic move. In fact, did you know that 92% of G2000 companies rely on IT outsourcing to improve their operational efficiency while enjoying specialized global expertise?
Let’s discuss outsourced IT services in detail and understand what it is and why businesses all over the world are opting for it.
What Are Outsourced IT Services?
The term refers to when you hire third-party companies to handle certain IT tasks for your company instead of having in-house teams handle them.
Over the years, this practice has grown (COVID-19 helped expedite it, too). 92% of G2000 companies rely on outsourced IT services. G2000 is a Forbes ranking of the world’s largest public companies.
The outsourced IT services include various services such as software development, data analytics, server management, and more.
What are the types of outsourced IT services?
There are three types of IT outsourcing:
- Onshore
- Nearshore
- Offshore
Onshore IT Outsourcing
It is when your business decides to hire professionals or a company that’s located in your city or nearby. This is a good option for businesses that want to keep everything under control and be able to do a physical meeting with their outsourced IT provider while keeping cultural alignment on point.
Nearshore IT Outsourcing
This is the term used when your IT outsourcing happens in neighboring countries that share the same time zone as your business. This makes it easier for your in-house team to communicate with the developers. For instance, a business operating in the US might outsource IT services to a company in Costa Rica.
Offshore IT Outsourcing
Outsourcing to countries outside the same time zone is referred to as offshore IT outsourcing.
Keep in mind that the biggest cost savings happen when you opt for offshore IT outsourcing since the rates of developers are the lowest in certain countries. Different types of IT outsourcing models can be used, such as:
- Project-Based Model
- Dedicated Team Model
- Outstaff Model
Your choice of type of outsourcing and the model you choose will depend entirely on your needs, scope, and budget.
What are the benefits of outsourcing IT services?
A business can enjoy a multitude of benefits when it brings an outsourced IT provider on board. Some of them are discussed below:
Global Talent Is Within Your Reach
One of the biggest benefits of opting for outsourced IT services is that your business can engage global talent. Imagine having a team of specialists from around the world working to assist your business in its endeavors.
Scalability
When you outsource IT services, you can easily scale up or down, enabling you to quickly adapt to market trends without incurring undue costs or hassles.
Incredible Cost Saving
Instead of spending resources and time on finding the right talent in-house, training, and maintaining them, you can simply rely on outsourcing IT services. All of this translates into huge savings for any business. For instance, when you hire a resource, you have to pay the overhead charges, cloud systems, devices, and much more.
Say Hello To Innovation
Outsourced IT service providers are up to date with the industry norms and have amazing portfolios. As a result, they bring innovative ideas and fresh perspectives to the table. This enables you to improve on your existing business acumen and helps you make informed decisions.
Focus On What Matters
Ask anyone who’s running a business, and they’ll tell you that operations and people management are what’s taking up most of their time. When you engage in an outsourced IT services model, you can free up your time to focus on your core business, knowing that the technical side is covered.
How to outsource IT services?
You can easily outsource IT services by following the steps outlined below:
Step 1 – Determine Your Needs
The first question that you need to answer is what particular services and/or skills you are looking to outsource. This will require an analysis of your in-house IT capabilities and identification of key areas where an outsourced IT service provider can offer value. Another way to go about this is to determine which technologies and expertise you need for your projects.
Step 2 – Outline Your Workflow
You need to decide which workflow would be ideal for your project. This is where you can discuss the requirements with potential IT service providers and consider different approaches and methodologies.
Step 3 – Assess Project Complexity
What kind of project are you undertaking? Is it a straightforward one? Have you ever executed a similar project? Or is it a complex project with multiple moving parts? Will you be requiring a scalable solution, or is the scope of the project limited? These questions can help you determine just how complex a project is and what kind of outsourcing you need.
Step 4 – Aligning On Workflows
When considering outsourced IT services, alignment with workflows becomes imperative. What does that mean? You need to consider time zones, cultural differences, and language barriers, for starters, to ensure that you have an effective communication line in place with your partner.
Step 5 – Due Diligence on Companies
Before you choose an IT service outsourcing company, be sure to check out their reviews and portfolios. You might also want to get a list of references and check in with them before you hire them for your IT needs.
Step 6 – Shortlisting Vendors
Once you have shortlisted potential outsourced IT services providers, take a look at their strengths and weaknesses. This will help you determine the best fit for your business. It is also imperative that you consider the kind of projects that they have tackled in the past.
Step 7 – Getting Quotations
If you’re getting a proposal that doesn’t outline the project’s timeline along with details of how it will be done, consider it a red flag. A good outsourced IT provider will submit a detailed proposal. Once you have such proposals, you can easily compare them to further shortlist your potential partners.
Step 8 – Negotiation & Finalization Of Agreement
A proposal is just that: a proposal. You can and should always try to negotiate to find a better deal for your business. During the negotiation phase, you can set clear expectations, deliverables, timelines, and payments to ensure that you enjoy a hassle-free experience.
Step 9 – Bringing The Partner Onboard
Ensure that you have an onboarding process in place for the chosen partner. It will help you speed things up and get the ball rolling. A good onboarding plan will help the partner quickly understand your business context and come up to speed on how your business handles projects.
In the end, remember that a collaborative approach is crucial for effectively managing the outsourcing of IT services.
How much does IT outsourcing cost?
There’s no straightforward answer to this question. Each project is different, with varying requirements, and simply quoting a figure is quite difficult. Furthermore, many factors are at play: the geographical location of the outsourcing company, the complexity of the project, the number of personnel working on the project, the number of hours required, and more.
However, we can still safely state that IT outsourcing can cost anywhere between $50,000 and $250,000, depending upon the services being procured. It is important to remember that the price may go lower or higher depending on the factors already discussed above.
You can also choose to outstaff, in which case you would pay the hourly wage of the talent you bring on board, which varies from $25 to $100 per hour.
How can we help you in outsourcing IT services?
Are you looking to outsource IT services? Coding Crafts can help you! With a wide range of IT services at its disposal and a proper workflow in place, Coding Crafts is the premier choice when it comes to Outsourced IT services.
We have more than ten years of experience, and whether you’re looking for app development, software development, or cloud solutions, our scalable solutions have you covered! Feel free to reach out today to discuss your particular needs.