Benefits and Risks of Outsourcing IT Services in 2021

This isn’t to say you can’t successfully outsource particular tasks, but you need to discuss the expected quality upfront. There are many reasons for this, including the fact advantages and disadvantages of it outsourcing that you are often hiring a contractor instead of an employee. And since the person is not working on-site, it can be difficult to maintain the level of control you desire.

And finally, set up a face-to-face meeting in order to get to know each other better. Considering Estonia’s outsourcing, we can see that the state cares about frequent training programs and IT-related education. This way, about 15,000 IT specialists graduate from Estonian universities annually, and this number is expected to grow to 20,000 by 2024, according to recent statistical predictions. Most students find their first job in IT organizations in 20 years and then gather more and more experience. Advantages of IT outsourcing also include open access to hiring IT specialists skilled in various technologies, even the rare ones.

  • Experienced MSPs like Bleuwire make data protection an important part of their SLA and services.
  • Here is one of the core negatives of outsourcing, as the data breach can cost a fortune for companies.
  • Outsourcing provides you with an opportunity to gain immediate expertise.
  • Throughout this period, which can range from several months to a couple of years, productivity very often takes a nosedive.
  • It specializes in Microsoft Dynamics 365 and Power Platform.

Companies can save a significant amount of money when they outsource specific tasks to partner agencies or individual freelancers. Five specific areas of focus with this advantage can help to make these relationships start to pay off almost immediately. You might need to provide access to your sensitive data to other vendors.

Are you grappling with the need to fill critical gaps in your IT capabilities? Or perhaps you’re looking to incorporate the expertise of trained IT professionals into your existing infrastructure? Whatever your motivations, outsourcing IT services has the potential to revolutionize your operations.

The Advantages & Disadvantages of Outsourcing IT Services

Then the initial estimates are made up, and you can sign an NDA if needed. Outsourcing your software development to another company, you make it from a distance — especially the long one if you use offshore development services. That’s why contacts between you and the rest of the team can be limited (which is one of the severe drawbacks of outsourcing), giving you no way to get the current data at the appropriate time.

Of course, your contract with the vendor should include guidelines and potential fines if the third party fails to keep up with the agreed terms. Small and mid-size outsourcing companies on the market are available to take up projects too small in scale for the behemoths of outsourcing even to consider. The number of outsourcing options is so vast that 80% of small businesses intend to outsource their business functions in 2021, the new study by Clutch reports. While your IT experts may be excellent professionals, the complexity of modern IT stacks means it’s extremely difficult to maintain up-to-date expertise in-house. One factor which often stymies investment in outsourcing is control loss.

  • Deloitte mentions that 70% of companies outsource their app development for cost reduction.
  • This is due to a variety of reasons, including budget limitations, time constraints, and general operation pressures.
  • It’s important to figure this out before soliciting outsourcers, as they will come in with their own ideas of what’s best for your organization, based largely on their own capabilities and strengths.
  • For the reasons mentioned thus far, cost reduction is another common benefit of outsourcing IT.

On the other hand, Estonian hourly wages for IT services are the lowest among the countries of Central Europe ($35-50). Due to outsourcing’s popularity and relevance, its market size will grow in the future. For example, Techavio predicts that the global outsourcing market share will reach $97.51 billion by 2024. Location-based outsourcing is defined by the distance between the client and the service provider. Undoubtedly, your in-house team is highly qualified, but it cannot have the same level of skills in every technical niche. Outsourcing opens up opportunities to work with niche-specific experts that your country or even continent might lack.

– Security Risk

Almost 60% of companies use this practice as a way to reduce their expenses. All the above challenges boil down to this simple challenge. It is difficult to find the right IT provider for your business.

Outsourcing risks and challenges

This can lead to downtime, reduce business efficiency and damage the reputation of the client company as a whole. In practice, it turns out that outsourced IT services are used in emergencies when something goes wrong inside the company and urgent technical help from the outside is required. It’s better to think about outsourcing IT services before it’s too late.

Round-the-Clock Support

The first is known as expert resource consulting, and the latter is known as process/people consulting. Both are forms of supplemental leadership—inviting a knowledgeable consultant into your practice to provide critical advice and direction on your HR needs. EXL is a US-based KPO provider with expertise in healthcare, logistics, banking, and finances. This New York-based company focuses on data strategy, architecture, analytics, and more.

As you can imagine, outsourcing – depending on the provider – allows you to integrate these services into your infrastructure. However, as a business owner, you may be concerned about the need to transfer your data to a third party. As you may have realized, securing their clients is what IT outsourcing providers do. Their job is to apply cutting-edge technology, proven expertise and a deep understanding of security to their clients’ businesses. Keeping up with today’s technology is not easy, even for qualified professionals as it requires training and a great deal of experience.

IT outsourcing is the process of hiring an external company to get information technical expertise services to your company. These services may include IT back-office support, e-commerce solutions, cloud solutions, data administrative services, networking and more. Typically, the company specializes in the type of service needed and charges a certain amount for it. Outsourcing IT solutions allows you and your staff to remain focused on your core business operations while allowing a team of experts to take care of your day-to-day IT tasks. SMBs are using IT outsourcing for competing with big players. However, the key to successful IT outsourcing is careful planning.

How to Get All From the Benefits of IT Outsourcing?

Pure Moderation is a Vietnam-based outsourcing service provider focusing on content moderation, customer care, and other BPO services. It’s located in Hanoi and offers knowledge process outsourcing services for the finance and accounting and HR (Human Resources), and administration sectors. Eminenture is an Indian business process management and outsourcing solution specializing in business research, technical customer service support, business process automation, etc. The type of knowledge process service a company provides will depend on its business requirements, availability of talents and resources, etc. After you identify the knowledge process service to outsource, you can find a KPO firm offering them.

IT outsourcing can be a valuable and cost-effective way to save your business time, money, and resources. However, you need to weigh the advantages against potential disadvantages before deciding what help your company needs. Even if your impressions concerning the project are overwhelming, try to control them as much as possible.