Outsourcing your IT development could be a hard decision. Very often during discussions with CxO’s, directors and business owners we conclude that despite the advantages they still don’t dare to do it. They are afraid of losing control. And this is something I fully understand. It’s like your kids growing up and then at once, they decide to leave your house. But one thing is certain, eventually, it will happen. So, why should you decide to outsource your IT? Below you will find 10 most common reasons.
1. Cost reduction
Unfortunately, cost reduction is still being considered as the greatest advantage of outsourcing. People expect cost reductions of up to 60%. Outsourcing is a good way to cut (unnecessary) costs, however, it hardly ever reaches this level.
2. Access to resources
Especially small and medium-sized enterprises are increasingly facing difficulties in recruiting and retaining IT specialists. To be the most competitive, you need to have access to the best people on the market. IT companies assemble most efficient IT specialists with vast experience, working with the latest technologies. They are able to offer you flexible and scalable resource solutions.
3. Access to the latest knowledge
How many of your employees do you consider well-educated in a specific IT domain? Are you sure their knowledge is up to date? Are they able to oversee all the available IT technologies? IT outsourcing will give you access to a wide range of up to date IT knowledge. Obviously, training your own and new employees will cost you a fortune. Needless to say, it also takes too long to groom new IT employees.
Many companies tend to rely on contractors, self-employed people, who deliver their IT knowledge to the company. But what happens when this “expert” is not available? Cooperation with a provider you trust makes that the continuity of resources is guaranteed. You do no longer have to rely on a single person.
5. Focus on your core business
IT is becoming more and more important for most companies. But this doesn’t necessarily mean that everybody likes it. We notice that many CxO’s, directors and business owners would like to focus on their core business instead of worrying about their IT matters. IT outsourcing can result in more attention to your business and your clients.
“Time” is probably more valuable than ever before. As a hard-working businessman, you have no time to waste. Surely, outsourcing involves the initial time investment, but later you will save time because you do not have to manage all your remote working “colleagues”.
7. You get what you really need
Outsourcing forces you to think twice. When you are developing an application in-house the development team often faces many change requests to satisfy everybody’s needs. Before you outsource the development you will have to specify your needs in detail. A good IT provider will help you to specify your needs and by adding their experience you can really focus on the real core of the solution. By doing this, also your costs might be reduced, I described this before in 3 ways to cut your software development cost by 50%.
…is something most companies are looking for. Having your own IT staff is not easy. For most companies, it’s too expensive to be prepared for the highest possible demand. But it’s a fact of life that one week you need 4 people and the other week 6. By extending your development team with outsourced resources you will be more flexible.
9. Reliability and stability
Due to better career prospects, IT specialists within a dedicated IT company are developing faster. Because of the easy access to the knowledge of their colleagues, they just know more. In general, this should result in more reliable and stable service delivery.
Service providers are able to fully focus on the project. They are not involved in internal affairs at the outsourcer’s side. This results in higher productivity of the IT specialists.
I totally agree. I even made a site for IT Outsourcing Solutions just to prove the outsourcing is really something that could cut the cost, increase productivity and overall beneficial to businesses.
Thanks for your support. Unfortunately I had to delete the link you mentioned in your comment. It was leading nowhere.
This was a pertinent post. i completely agree with this. thank you for your thoughts! I believe outsourcing is necessary in today’s business environment to save on cost. It has become necessary to cut the corner every where to remain competitive. Outsourcing offers many advantages. For instance, outsourcing allows companies to seek out and hire the best experts for specialized work. Using outsourcing also helps companies keep more cash on hand, freeing resources for other purposes, such as capital improvements. It's also often cheaper in terms of salaries and benefits and reduces risks and costs.
Hi Yolanda, great to know you support our thoughts. Good to see you experience the same once. As stated in the post as well outsourcing shouldn't only be treated as a cost saving option. Depending of the type of company other reasons will be more applicable. Also well performing companies who don't have to save cost should consider it to find the best experts like you mentioned or to guarantee the continuity of their resources.
Unfortunately the current/recent economic downturn made everybody more cost focussed. Soon we will notice outsourcing will be an enabler for (new) opportunities as well.
I agree with your post, Peter!
That's proven already. Outsourcing still expanding until now.
Hi Philam, thanks for your support. I'm curious what you could add from your experience. Do you notice any differences? Is the reason for outsourcing shifting? I notice cost reduction is still important, but other factors are becoming more important as well.
Great post Peter! You nailed it. As you evaluate your choices and decisions in outsourcing different components of your operations, you will need to consider the advantages of outsourcing. When done for the right reasons, outsourcing will actually help your company grow and save money. There are other advantages of outsourcing that go beyond money. -Charlie-
Hi Charlie, I completely agree. The main focus has to be what you can gain from outsourcing and that's not only money saving.
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