IT Outsourcing Guide: Definition, Type & Models, and Why to use
IT Outsourcing is quickly becoming an important part of modern business, and it can help businesses of all kinds. IT Outsourcing tasks can help you save money, work more efficiently, and get ahead of the competition, no matter if you're a big company or a new business.
Recent events have only accelerated this change. A study by Deloitte says that the COVID-19 pandemic has discredited the idea that people need to be close to each other to build trust and work well together at work. There seems to be a rising desire for IT outsourcing as companies adjust to new situations and look for more adaptable and cost-effective solutions.
As the Business Development Manager at Arturion, it's my job to connect exciting new businesses with our skilled workers. I'm in charge of the whole IT outsourcing process, from putting together the right team to handling projects.
This detailed guide will explain what IT outsourcing is and how it can help your business. It will also give you information to help you decide if outsourcing is the best choice for your IT needs. Let us dive into the world of IT outsourcing and find out how it can change your company.
What is IT Outsourcing?
Since technology is always changing, companies are always looking for new ways to stay ahead of the game while keeping costs low and performance high. Outsourcing IT work is a strong choice that has come up. But what does IT outsourcing really mean?
At its core, IT outsourcing means that a company moves some of its IT or software development work to a company that is not part of the company itself. This can help cut costs and give you more power over how things are done. Basically, it means giving specific jobs to a partner who is skilled in that area while still keeping an eye on things and making sure everything runs smoothly.
It's possible to outsource IT in a number of different ways, including through local and foreign agreements. In general, there are three main types of outsourcing, which can be separated by where the service provider is located:
Types of IT Outsourcing
1. Onshore Outsourcing
When you do onshore outsourcing, you work with service providers that are in the same country as your business. There are many perks to this type of hiring, such as better contact, the ability to work in the same time zone, and cultural harmony. However, it might cost more than choices that are offshore or close to shore.
2. Nearshore Outsourcing
When you hire companies in nearby or neighboring countries to do work for you, this is called "nearshore outsourcing." This method usually strikes a balance between saving money and the advantages of being close, like sharing time zones and cultures. For example, an American company might hire IT service providers in Mexico or Canada to do work for it.
3. Offshore Outsourcing
When you do offshore outsourcing, you work with service providers in other countries, usually ones where the cost of labor is lower. While this type of hiring can save a lot of money, it can also be hard to work with people from different time zones, languages, and cultures. India, the Philippines, and countries in Eastern Europe are all popular places to go on vacation.
Models of IT Outsourcing
1. Project-Based Outsourcing
In this model, companies hire outside providers to do certain jobs or tasks for them. This method works great for short-term needs or jobs that need specific skills that the company doesn't have. When the job is done, the business and the provider usually no longer work together.
2. Dedicated Team Model
When you use the dedicated team model, you hire a group of workers to work on your projects only. They still work for the outsourcing company. This model works well for long-term projects and allows you to change the team size based on the project's needs.
3. Staff Augmentation
Businesses can add casual workers to their current teams through staff augmentation to fill skill holes or handle extra work. The extra staff members work with the regular staff, adding extra skills and abilities as needed.
4. Managed Services
In the managed services model, companies give outside companies control over certain IT tasks and ensure they are properly maintained. Some of the things that can fall under this are network control, cloud services, hacking, and IT support. Managed services companies usually offer ongoing help and tracking to ensure that IT systems run smoothly.
Why You Should Use IT Outsourcing
One of the best things about IT outsourcing is that it can help your business be more efficient, productive, and competitive. Here are some reasons why you might want to use IT outsourcing in your plan:
1. Cost Savings
When you outsource IT tasks, you can save a lot of money. Keeping an in-house IT team going costs a lot of money in equipment, pay, perks, and training. You can get high-quality services for a lot less money by outsourcing, especially if you choose overseas or nearshore outsourcing. The money saved on costs can be put back into key business tasks and growth plans.
1. Cost Savings
When you outsource IT tasks, you can save a lot of money. Keeping an in-house IT team going costs a lot of money in equipment, pay, perks, and training. You can get high-quality services for a lot less money by outsourcing, especially if you choose overseas or nearshore outsourcing. The money saved on costs can be put back into key business tasks and growth plans.
2. Access to Expertise and Advanced Technologies
IT outsourcing gives you access to a global talent pool of skilled workers who know the most up-to-date information and techniques. Specialized outsourcing companies know about the newest technologies and the best ways to do things in their field. This makes sure that professionals handle your IT tasks. This ability to use cutting-edge tools and know-how can give your company an edge over others.
2. Access to Expertise and Advanced Technologies
IT outsourcing gives you access to a global talent pool of skilled workers who know the most up-to-date information and techniques. Specialized outsourcing companies know about the newest technologies and the best ways to do things in their field. This makes sure that professionals handle your IT tasks. This ability to use cutting-edge tools and know-how can give your company an edge over others.
3. Focus on Core Business Functions
Your internal IT team can focus on what they do best—running the core activities that make your business what it is—by selling IT tasks that aren't essential. Focusing on this can help with speed, new ideas, and long-term progress. When you outsource regular IT jobs, your team has more time and resources to work on projects that directly benefit the growth of your business.
3. Focus on Core Business Functions
Your internal IT team can focus on what they do best—running the core activities that make your business what it is—by selling IT tasks that aren't essential. Focusing on this can help with speed, new ideas, and long-term progress. When you outsource regular IT jobs, your team has more time and resources to work on projects that directly benefit the growth of your business.
4. Scalability and Flexibility
When you outsource, you can change the size of your IT team based on your business needs. Outsourcing gives you the flexibility to change quickly and effectively, whether you need more help with a big project or need to cut back during slow times. This flexibility ensures that your IT tools match your business's needs without having to hire or fire staff, which can be difficult.
4. Scalability and Flexibility
When you outsource, you can change the size of your IT team based on your business needs. Outsourcing gives you the flexibility to change quickly and effectively, whether you need more help with a big project or need to cut back during slow times. This flexibility ensures that your IT tools match your business's needs without having to hire or fire staff, which can be difficult.
5. Risk Management and Security
Trustworthy outsourcing companies have strong security measures, backup plans, and compliance rules in place to keep your data and IT systems safe. You can lower the risks of hacking, data leaks, and system problems by outsourcing. Experienced suppliers know how to deal with these risks, which keeps your IT operations running smoothly and safely.
5. Risk Management and Security
Trustworthy outsourcing companies have strong security measures, backup plans, and compliance rules in place to keep your data and IT systems safe. You can lower the risks of hacking, data leaks, and system problems by outsourcing. Experienced suppliers know how to deal with these risks, which keeps your IT operations running smoothly and safely.
6. Increased Efficiency and Productivity
Outsourcing can help you organize your IT processes, making them more effective and efficient. To provide services quickly and effectively, specialized providers use advanced tools and processes that have been fine-tuned. This could lead to faster project completion, better service, and better performance overall.
6. Increased Efficiency and Productivity
Outsourcing can help you organize your IT processes, making them more effective and efficient. To provide services quickly and effectively, specialized providers use advanced tools and processes that have been fine-tuned. This could lead to faster project completion, better service, and better performance overall.
7. Innovation and Competitive Advantage
IT outsourcing can help your company come up with new ideas by giving you access to expert skills and cutting-edge technologies. You can use the skills of outside companies to bring in new tools, make processes better, and stay ahead of industry trends. Your business can become a market leader with this new idea if it gives you a big edge over your competitors.
IT outsourcing is a smart move that can pay off in many ways, from saving money and getting access to experts to focusing more on core tasks and making the business more flexible. By working with the right outsourcing company, you can drive growth, speed, and innovation in your business, helping it stay competitive in today's fast-paced market.
7. Innovation and Competitive Advantage
IT outsourcing can help your company come up with new ideas by giving you access to expert skills and cutting-edge technologies. You can use the skills of outside companies to bring in new tools, make processes better, and stay ahead of industry trends. Your business can become a market leader with this new idea if it gives you a big edge over your competitors.
IT outsourcing is a smart move that can pay off in many ways, from saving money and getting access to experts to focusing more on core tasks and making the business more flexible. By working with the right outsourcing company, you can drive growth, speed, and innovation in your business, helping it stay competitive in today's fast-paced market.
Why Outsourcing IT to Arturion Is the Best Option
For your business, outsourcing IT to Arturion is the best choice because we bring top-level knowledge and a dedication to greatness. As a top IT hiring and contracting company, we've been giving new and growing companies the best app developers for seven years. We've made great apps for eCommerce companies and worked closely with financial clients.
We are very good at making complicated web and mobile apps for iOS and Android. Our team of highly skilled IT experts from different fields helps us do this. We can give you cutting-edge solutions because we know how to use famous computer languages and tools like Kotlin, React, and Node.js. Arturion provides unmatched support and fresh ideas, treating your project with the same care and commitment as if it were our own. This is true whether you're a startup trying to get funding by making an MVP or an established company wanting to grow.
How Much Does IT Outsourcing Cost
IT outsourcing costs can vary greatly depending on factors like hourly prices and the size of the team. It's important to know the difference between IT contracting and IT staffing. Outsourcing IT means giving a whole project to a company outside of your company. Outstaffing IT means hiring workers from outside your company to work as part of your team.
Costs for IT outsourcing can run from $50,000 to $250,000, depending on the size and complexity of the job. IT outstaffing costs, on the other hand, depend on how much each developer charges per hour, which can be anywhere from $25 to $100, depending on their experience and where they work.
Our rates at Arturion range between $25 and $49 an hour, which is a big savings compared to most European countries and almost four times less than rates in the US or Canada. We are dedicated to giving our customers the best service possible by offering great value without lowering the quality.
Summary
In this article, we dispel the myth that information technology outsourcing is limited to low-profile deliverables and last-resort decisions. We highlight that even major tech companies leverage outsourcing for its significant benefits. Additionally, IT outsourcing is an excellent option for early-stage startups to save time and money.
Arturion is a product development studio specializing in the dedicated team IT outsourcing model. We provide our clients with a full-cycle product development team, ensuring professionals are fully engaged in your product from the idea validation stage to the product launch. With Arturion, you get a dedicated team committed to bringing your vision to life.
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