The world of business is constantly evolving. Traditional business models are being overturned as emerging technologies and novel approaches to problem-solving take center stage.
For this reason, companies are now experiencing a step change in the workforce skills they need to thrive and grow. This has led more businesses to utilize outsourcing to obtain the skills and expertise they need to stay competitive.
One area where outsourcing is increasingly being adopted is information technology (IT). Software development, cloud computing, cybersecurity, and technical support outsourcing are just some of the IT management services that corporations are leveraging to maximize efficiency and optimize their operations.
Why Do Businesses Outsource their IT Operations?
Lower Costs — Outsourcing IT operations to an experienced third-party provider often results in lower costs and improved business performance. This is because they grant businesses access to a broader talent pool and eliminate the need to maintain an in-house IT department with all its associated costs.
Greater Agility — By outsourcing IT operations, businesses can respond faster to changing market conditions and customer demands. This kind of agility allows them to stay ahead of the competition and capitalize on early opportunities.
Increased Focus on Core Business Functions — Freeing up valuable resources from IT management can enable businesses to focus on core functions such as sales, marketing and product development. Small and medium-sized businesses with limited resources find this especially helpful, as it lets them focus on key tasks.
Improved Security — The right third-party provider can give expert guidance and technical support that helps reduce the risk of data breaches and other security threats. This is a critical business requirement for organizations where customer data is stored and shared.
Access to Advanced Technologies — IT vendors usually have their fingers on the pulse when it comes to the latest technologies. Working with an external specialist allows businesses to access this expertise and leverage the latest tools to improve efficiency and performance.
Responsive Maintenance and Support — An experienced IT partner can provide around-the-clock maintenance and troubleshooting services, enabling businesses to maintain the highest levels of service quality.
Breadth of Service — Outsourced IT suppliers offer a plethora of services to fulfill all your IT requirements. Some of the specific services that they offer are:
Network Operations Center
Service Desk or Help Desk
Mobile App Development
Cloud IT Support
Eight Steps to Guarantee the Success of Your Outsourced Project
Hiring an IT outsourcing partner is a smart decision. However, to gain the most value out of this arrangement, consider following those few short steps:
1. Define Business Goals
When it comes to the realm of IT outsourcing, making strides is all about pinning down precisely what it is you're looking to achieve. Perhaps you're interested in developing a new software product, or maybe you want to enhance your network security.
Having identified your goals, move on to evaluating the scope of the project and determine what capabilities are needed from a technical standpoint. Examine your available resources and consider how they can help you reach your target. This includes your current team's skills and the budget you've allocated for the project.
After going through this process, you should have a clearer idea of whether an IT partner is the optimal choice.
2. Start the Vendor Selection Process
While many IT outsourcing companies may boast impressive websites and prestigious clients, appearances can be deceiving. Having a strong selection framework in place is crucial in identifying your top contenders. Below are several critical factors to consider when vetting potential IT vendors:
A. Technical Expertise
Your ideal outsourcing partner should have a proven track record of successful IT initiatives in your niche. Only then can you feel confident enough that they will support your project through its various lifecycle stages, like development, design and testing.
Additionally, they must already be familiar with the systems you use, so they can hit the ground running with your project requirements — be that day-to-day maintenance or large-scale upgrades.
When entrusting a third party with access to your business data, confirm that they can guarantee the safety of this valuable information. Ask about their security protocols and the kind of measures they have in place to protect your data from malicious actors or other ways of online intrusion.
And you can always consult client references and online reviews to assess their reliability and risk management capabilities.
C. Outsourcing Model and Cost
There are various models to choose from when considering IT outsourcing. And each one offers different advantages and pricing. Remember to focus on your outsourcing goals, the type of services you need, and your budget.
Onshore or domestic outsourcing is when the vendor is located within your business's country or geographic region. It has the benefits of quicker response times and easier communication. Still, it tends to be more costly than nearshore or offshore outsourcing.
Nearshore outsourcing means contracting a third-party provider near your country, typically within the same time zone or close to it. It strikes a great balance between cost-effectiveness, ease of communication, as well as the existence of cultural similarities.
Offshore outsourcing is when the vendor is located in a different country or region. This can benefit businesses seeking access to larger talent pools and lower labor costs.
However, it may require additional resources for communication management and quality assurance since there will be a time difference between the vendor and the business.
3. Supply the Right Tools and Training Materials
After choosing your IT partner, it's time to get the project underway. To get off on the right foot, ensure that the vendor can access all the tools and training materials they need to get properly acquainted with your systems and workflows.
This might include user guides, system diagrams, design plans, coding standards and technical documentation. Give them a list of your software platforms so they know what's available for use.
And if possible, assign an internal team member to work alongside the vendor during the onboarding phase to help them quickly get up to speed.
4. Communicate Your Deliverables
To get the desired results, you have to be very clear about the expectations you have of your IT outsourcing. This means having a well-defined list of project deliverables, including the scope of work, timeline and budget.
Set measurable objectives for them to ensure that they are meeting all required standards. This will help you track the progress being made and hold them accountable in case of any delay.
5. Brief Your In-House Team
With any outsourcing arrangement, there will be some overlap in tasks between the IT vendor and your in-house personnel. To prevent any confusion, hold a briefing session with your in-house personnel to explain their roles and responsibilities during the course of the project.
For instance, if your third-party provider is entrusted with your website's development, then your in-house team should know their part in the process – say, giving feedback or managing customer data.
Appointing an internal liaison as the point of contact for both teams can also foster better collaboration and smoother operations.
6. Establish an Effective Communication System
Lack of communication is one of the biggest reasons why outsourcing efforts fail. So, building solid lines of communication between your two parties is vital.
Create a system where both sides can easily reach out and discuss any questions, blockers or progress updates in real time. This can include the use of project management tools or collaboration platforms. Also, schedule periodic check-ins to discuss the project's overall status.
7. Start Slow
Diving right in with an overly ambitious, complex undertaking is not a good idea. Instead, start by giving your IT vendor small tasks or a short-term project.
For example, you could have them conduct a code audit or perform some quality assurance testing. This will give you insights into their expertise and how well they can collaborate with your internal team.
Once they have proved their capabilities and you are satisfied with the outcome, you can gradually increase the scope of their responsibilities.
8. Monitor Performance and Review Results
Part of optimizing your business operations through outsourcing is closely monitoring the performance of your third-party provider. Schedule regular reviews to assess their progress and ensure they’ve met all the milestones on time.
Listen carefully to the feedback from clients, team members and other stakeholders involved in the project. This lets you gauge the quality of the vendor's work and identify areas where improvements are needed.
Outsourcing IT Management for Business Success
IT outsourcing is a great asset for businesses that don't have the resources or expertise in-house to fulfill their IT management needs. But any new venture comes with a set of risks.
You must take the necessary steps to properly vet potential vendors, ensure the security of your data and establish clear communication channels. You'd also do well to monitor their performance and evaluate the results regularly. Doing so will guarantee a steady flow of high-quality work and help you reap the benefits of outsourcing for business success.