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Advantages and Disadvantages of Outsourcing IT Operations

With advancements and innovations in technology, the requirement for skilled individuals has gone through the roof.

Companies all around the world now believe in outsourcing a chunk of their business functions to independent agencies or freelancers to boost efficiency and growth.

This is especially a common practice with outsourcing IT operations.

You can either entirely ditch the traditional, in-house business solution in favor of outsourcing or hire specialized vendors to complement your internal team.

In this manner, you can bring in a wide range of expertise and different levels of experience to a project without having to break the bank. These mainly include Software Development, Mobile App Development, Database Management, Chatbot Development, Chat Support, Website Development and more.

Companies like Skein Technologies are there to help businesses with outsourcing Software Development processes and IT Operations.

If you are a business owner and are looking for a cost-efficient solution for accomplishing IT operations, outsourcing may be the right way to go. However, there are a couple of things you should know.

People always debate on whether to outsource tasks like Mobile app development to agencies or not. In this article, we will be recounting the advantages and disadvantages of outsourcing IT operations so you have a clearer idea about it.

Advantages of IT Outsourcing

There are several advantages to outsourcing IT operations. Let’s look at the top five:

Better utilize your time and resources

When supporting processes of your business are outsourced to a reliable agency, you save time and pursue your core business goals. This also frees up your internal resources to concentrate on the primary tasks and strategies of your business.

Risk mitigation and resource flexibility

Outsourcing provides you with an opportunity to shift responsibilities to a qualified vendor and share the risk that comes with it. This also results in better risk mitigation. Furthermore, an office can operate consistently and efficiently even when it is short-handed.

For example, if your in-house IT operations department is understaffed due to unavoidable reasons, you can rely on your outsourced vendors to take over and fulfill the necessary requirements in a cost-efficient manner. It’s an ingenious approach to avert substandard levels of operations.

Reduced cost of operations

Possibly the top reason why companies opt for third-party vendors for IT operations is the cost benefits they stand to gain from such an alliance.

There are no recruitment or overhead costs involved. Plus, the additional resources bring you flexibility and agility that is not possible with in-house teams.

A recent survey indicated that companies that outsource part of their business operations save 18% more on average than companies that don’t. This helps companies free up capital for potential investment opportunities.

Increased quality and efficiency

A third-party IT operations agency is dedicated to providing IT support and specializes in providing the technical expertise it requires. This is an excellent way to gain some fresh perspective. Besides, you have a higher quality product.

Naturally, increased quality results in better efficiency and positively impacts the productivity of the company.

Faster growth

Outsourcing IT operations to dedicated and qualified agencies result in faster releases, which increases your company’s reach (better products implies higher demand). Consequently, your company grows.

Disadvantages of IT Outsourcing

Although the advantages of IT outsourcing overshadow the disadvantages of IT outsourcing, you should still know the risks involved.

Lack of control

It is easier to streamline irregularities in an ongoing project when it is an in-house team. With outsourced vendors, you don’t have enough accessibility or control over turnaround periods, quality assurance, and overall management.

Hidden Costs

if you aren’t thorough about the contractual agreements, you might end up shelling out a lot more you agreed to. This is especially common when dealing with offshore outsourcing companies.

Confidentiality risk

Involving a third-party agency in your operations can put the privacy of your company and others involved at risk.

Financial qualms

While you can ensure the wellbeing of your business, you can’t be too sure of the financial stability of an outsourced vendor. If they were to go out of business or failed to deliver as specified, the financial burden would fall on you.

Lack of focus

You don’t always have the undivided attention of a freelancer or a third party agency. While attempting to juggle several clients at once, a freelancer or hired agency may jeopardize your project.

How To Choose The Right IT Outsourcing Company?

Popular companies like Skype, GitHub, Tech, and Telco outsource their work.

Do you know why?

It’s because of the advantages we’d highlighted earlier. If you’re determined to outsource IT operations of your business, read this section on how to choose the right IT Outsourcing Company:

  1. It is important that you choose an outsourcing partner you can trust. Especially with IT operations, you should make it a point to review their market reputation, connect with their past clients, or visit forums (Clutch, GoodFirms) that provide you this information.

An unprofessional outsourcing vendor whose business goals do not align with yours or one that misses deadlines can do more harm to your company than anything else.

Therefore, it is a good measure to look for proven track records, experience, and credentials before proceeding.

  1. Do not just look at outsourcing as a means to reduce costs. Concentrate on skills and qualifications that will add value to your company and promote innovation. Ask yourself what your business needs are and what might meet your requirements. Based on this, define a clear roadmap to navigate further.

  2. A good outsourcing service provider has methodologies in place to ensure proper management of projects, resolve issues, controls, and track the quality of work. Discuss this with them beforehand to understand how they plan on delivering your projects.

  3. Do a trial run with a potential outsourcing partner to ensure you are compatible. This also gives you a chance to assess their technical expertise and professionalism.

  4. Concentrate on whether partnering with a particular outsourcing service provider boosts your market reputation or gives your edge in the competitive arena.

  5. Communication is key. As long as you ensure your needs, deadlines, and budget are communicated properly through the right channels and important instructions are not getting lost in translation, you can hope for smooth-running of processes.

  6. Some parameters to keep in mind during the hiring process are Experience with software technologies, technical acumen, skillsets, business goals, financial stability, and resolving capabilities.

An outsourcing service provider that has implemented Agile methodologies in the workplace may be your best bet.

  1. Another important factor to keep in mind is data privacy. In case you are giving out an outsourcing partner access to sensitive information, there is a possibility of mishandling.

Therefore, you should have counteractive measures in places such as Non-Disclosure Agreements (NDA) and regular security checks to prevent data leaks. You must also ensure your future outsourcing partner places due to the importance of security.

Outsourcing IT Operations: Should You Do It?

Outsourcing lets you overcome time and budget constraints. Since you can choose a qualified outsourcing partner from anywhere around the globe, you have the flexibility to plan your rates and come up with optimum strategies for your business.

As per reports, over 37% of all organizations outsourcing application development processes are looking to increase the amount of work they will outsource.

Companies are also investing in cloud services and automation software to improve outsourcing so they can outsource higher-level jobs in the future.

If you are a small business, outsourcing can prove to be a boon for you. As long as you strategize in advance, define a clear scope of work, communicate your needs, give due priority to expertise, and most importantly, choose a trusted partner with a reliable market reputation, you can avail the many benefits of outsourcing.

Good luck!

Vikas Vimal

Web Designer and Developer from India. Music and Food Lover.