What is Outsourcing?
When you contract out a business function that involves the transfer of people, processes and assets to an external supplier, it is known as outsourcing. The term has been mostly associated with the Information Technology (IT) sector, although it is increasingly finding its application in a wide range of business process such as HR, Finance, Customer Service etc.
IT Outsourcing has off late found its footing in the global market regardless of business models. While IT outsourcing has always been a tedious exercise, it has become more of a necessity in the last two decades. When it comes to traditional IT outsourcing, difficulties arise in transferring the staff, formatting and renewing contracts and assessing the impact of selling physical assets financially.
Factors That Drive IT Outsourcing:
Typically, cost reduction and asset-liability reduction are the two major driving factors behind IT outsourcing. However, there are quite a few other factors that play an important role in supplementing the demand for IT outsourcing.
Fast-Paced Development: A new or an existing business/company can utilise the option of outsourcing to implement its key functions much more quickly at reduced costs than opt for an in-house department from scratch.
Adaptability: Outsourcing certain operations that are non-core can provide the flexibility/adaptability for a company/business that needs to keep in sync with the changing demand and business opportunities.
Special Skillsets: IT sector demands extraordinary skillsets that are hard to come across. Attracting, equipping and retaining skilled employees can pose a serious challenge. Outsourcing the same to external agencies can give access to the same.
Circumstances to Consider Before Outsourcing IT:
At this juncture, it is clear that outsourcing IT operations helps companies grow their business and align their focus on its key functions that deliver fast-paced growth and superior client satisfaction.