What is IT outsourcing? How can you take advantage of them?

IT outsourcing is a fast-growing part of the industry. It has become one of the most valuable solutions for businesses of all sizes, from large corporations to startups and SMEs. This is the business practice that uses external service providers to deliver IT-enabled business processes. Common IT outsourcing can improve your scalability, access to experts, and concentrate on core business development.

Here’s an in-depth guide to IT outsourcing, helping you understand its definition and key benefits.

1. What is IT outsourcing?

As always, the first question to ask when exploring a topic is its definition. IT outsourcing means that collaborating with a third-party service vendor to manage all or part of an organization’s IT operations, driven by the significant advantages of hiring a skilled outsourced IT development team.

Outsourcing, including utility services, software as a service (SaaS), and cloud-enabled solutions, helps clients develop effective digital transformation strategies by selecting the right IT service vendors to build win-win partnerships with them. To sum up, IT outsourcing is handing over task implementation to the partner and keep an eye on things.

2. Types of IT outsourcing

IT outsourcing has become a familiar concept for business enterprises. Along with understanding the pros and cons of in-house development and outsourcing, it’s important to familiarize yourself with the different types of outsourcing to select the option that best aligns with your company’s long-term business strategy. Besides, it is able to necessitate a clear understanding of how to categorize IT outsourcing services. The following are some of the most widely utilized types of IT outsourcing.

2.1. Nearshore

The act of outsourcing IT-related tasks to a company located in a neighboring country. While this arrangement simplifies travel and communication between the two organizations, the drawback is the restricted range of available options.

2.2. Offshore

Offshore outsourcing involves sending IT-related work to a company in a foreign country. This option usually comes with the added benefit of cost savings. However, it introduces complexities related to different time zones, cultural nuances, and potential language barriers. Despite these challenges, many organizations opt for IT outsourcing firms to capitalize on the financial advantages they offer, seeking global talent pools and diverse expertise.

2.3. Onshore

This type of IT outsourcing is selecting an external service provider based within the same country as the hiring company, to remotely handle the tasks. In this model, local teams are easily accessible, speak the same language, live in the same time zone, and have similar mindsets. 

2.4. Cloud computing

Engage an external service provider to deliver IT-related services through virtualized solutions, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).

2.5. Managed services

Managed services require enlisting the services of an external company to handle network management functions, including IP telephony, messaging systems, call centers, virtual private networks (VPNs), firewalls, network monitoring, reporting, and various other tasks.

3. 5 Benefits of Outsourced IT Services

In today’s rapidly evolving digital landscape, businesses often struggle to decide whether in-house development or IT outsourcing services better meet their needs. This is a complex decision that requires careful consideration and informed choices.

Join us as we explore the 5 key advantages of outsourcing IT services to high-quality vendors.

3.1. Massive savings

When outsourcing or contracting IT outsourcing firms, your company doesn’t need to find ways to hire IT professionals and enable them to be qualified. This removes the demand for an in-house IT department as well as a budget for payroll, infrastructure, taxes, and training, among others. Another point of reduction in cost with outsourcing is the transformation of fixed IT costs into variable costs, which helps you to allocate budget effectively. You can upscale or downscale what you pay for depending on your month-to-month needs.

3.2. A vast pool of dedicated developers

The first reason why many companies outsourced it solutions was the difficulty in finding qualified specialists. This means having exclusive service and teams that adapt to the demands available, delivering results with expertise and speed. Developers, for example, are introduced to the project only once, and there is no change of team constantly.

3.3. Increase productivity and focus on the core business

The power of your company can be enhanced with the help of IT outsourcing especially when it comes to SME companies that don’t have a wide array of IT resources. It is better to leave IT tasks to specialists to allow an in-house team to concentrate on major business activities. When hiring IT outsourcing, these extremely complex issues will be in the charge of the contracted company, leaving your organization to focus on what you do best. 

3.4. Top-quality equipment which you don’t have to buy

Another great benefit of outsourcing IT services to a third party is that there’s no need to spend thousands of dollars on expensive equipment and software which you will probably need for handling a few tasks per year. Companies that offer IT support outsourcing services will take care of everything for you so that you can get IT products of the highest quality.

3.5. Security and accountability

Maintaining the security of a company’s data can be a delicate task. Information security requires continuous monitoring and investment to stay ahead of threats. The guarantee of a specialized team, that will implement the best data and information security policies available to them (under the penalty of law), is a crucial benefit. Not to mention the fact that the responsibility of keeping your data secure is attached to the outsourcing company.

4. Hints show that you need to use IT outsourcing services

4.1. No efforts for in-house IT department

If your company is too small to open an IT department or you just wish to forgo an IT staff, IT outsourcing is a perfect solution. With outsourced IT, the tasks that the in-house department would handle in exchange for high salaries can be handled at a lower cost.

4.2. You wish to save money

With tech outsourcing, you can allocate in-house resources to address better the daily needs of your company. The cost for an IT outsourcing team is much less than the salaries commanded by most in-house IT staffers. This is because MSPs handle nothing but IT for a vast range of clients large and small, whereas an in-house IT staffer would rely solely on you for his or her income.

4.3. You want the best support technologies

Outsourced IT services use only the most high-grade technologies on the market today. Whereas you might pay a fortune to have top-of-the-line hardware and software arsenals set up in your company offices, the same technology can be accessed offsite at a reasonable monthly rate. Best of all, your in-house staff does not even need to learn the more complicated aspects of hardware operation and software installation because the MSP handles all such tasks.

>>> See more: Delve into top 5 software outsourcing Vietnam companies

5. Frequently Asked Questions

5.1. Why is IT outsourcing important?

When it comes to cost-effectiveness, IT outsourcing is the top choice. By partnering with a third-party provider, you gain immediate access to a team of highly skilled developers who help you implement the latest technologies and techniques.

5.2. What are the different types of IT outsourcing?

The form of IT outsourcing is increasingly popular around the world. There are three main types of this trending service: onshore, nearshore, and offshore. Each has unique characteristics and is suited to different business needs and industries. For specialized businesses, it’s essential to conduct thorough research and choose the most suitable service for your current needs.

5.3. What is project-based outsourcing?

The project-based outsourcing model is one of the most accessible forms of outsourcing because it is used in almost every industry. The outsourcing company handles each stage of the project, forming the development team and managing the entire process. Your internal project manager will maintain constant communication with the external team. At the last, your business will receive regular progress updates, outlining the work completed and the level of your company’s involvement in the project.

6. Final thoughs

At Newwave Solutions, we offer all-in-one software development services for all companies around the world. We deliver projects with 100% energy and manage your IT functions so you can focus on the core business. If you’re looking for a reliable partner to bring your visionary digital ideas to life, reach out to us today:

• Head Office (Hanoi): 1F, 4F, 10F, Mitec Building, Duong Dinh Nghe Street, Yen Hoa Ward, Cau Giay District, Hanoi City, Vietnam
• Branch Office (Tokyo): 1chōme118 Yushima, Bunkyo City, Tokyo 1130034, Japan
• Hotline: +84 985310203
• Website: https://newwavesolution.com
• Email: [email protected]