IT Outsourcing: Pros and Cons

Software development is at the forefront of many modern businesses. This means that many companies rely on the skills of IT experts to thrive. IT experts skilled at their jobs are in demand and enjoy great earnings, multiple awards, custom medals and other benefits. For this reason, there is a shortage of IT workers. It is sometimes challenging to find employees with the same expertise and experience that your business demands. Sometimes, those employees are available but in a different time zone than where you do business. This brings on an unavoidable need for outsourcing. 

What is outsourcing? Outsourcing means contracting a third party to take care of your business needs. It provides several short and long-term benefits to a business. It also has its share of disadvantages. IT outsourcing happens when IT companies hire outsourcing partners to supply talents to manage the business’s IT tasks, processes, and operations. Companies can outsource such processes as IT help desk support, cyber security solutions, cloud computing, data analytics, software development and maintenance, etc. If you are considering outsourcing IT processes in your business, knowing the pros and cons is essential.

Pros of IT Outsourcing

Improved Job Security and Flexibility

Outsourcing allows business owners to hire just the correct number of employees they need every season. One could outsource to a large team for large projects, and for smaller projects, the business could use the in-house team. Companies can quickly reduce the workforce when they are slow by letting go of the external team. When dealing with external employees hired through outsourcing, business owners do not have to worry about drawn-out HR processes or excessive expenses, as may be the case when hiring for an in-house position.

Generally, this puts less financial burden on the company and saves the HR department the hassle of constantly hiring and laying off.

Great talent pool

Hiring from one’s immediate environment often limits employers’ access to the best talents. Suppose you are looking for a specialist in software development. In that case, the individual most qualified for that job may be an independent contractor unwilling to work full-time but able to work temporarily. Also, with IT outsourcing, most talents work as freelancers and digital nomads and are located worldwide, giving you a global talent pool from which to hire.

Less Labor Cost

Lower labour costs are one of the best reasons for outsourcing IT needs. Outsourcing allows you to hire talented people at a lower price than you may have paid if you were hiring an in-house professional. This is because you can search for talent worldwide, and the cost of labour in some parts of the world may be much cheaper than what you pay at your physical location. 

Cons of IT outsourcing

Delay in project completion

When you outsource your IT project, you automatically give away some of your control over the project. The project’s timeline will depend on events on the third party’s location. Issues such as scheduled/unscheduled blackouts, local holidays, natural disasters, political instability, and similar global events may hinder the talent from completing their milestones at an expected pace. Delayed timelines often lead to increased costs and disgruntled clients. When outsourcing essential projects, it is vital to have a manager perform regular checks and get progress reports from both the in-house and the external teams.

High Risk of Data Leaks

Many business owners worry about the security of their data when outsourcing. For this reason, it is important to outsource to reputable partners. Create firm guidelines about how your data will be stored, processed, protected, and disposed of while in the hands of the external team. Sometimes, the external team is given only a certain level of security clearance, and not every piece of information about the project is shared with them. 

Focusing on quality when outsourcing is also essential to prevent data leaks. Hire partners who have a history of integrity and are proven to be trustworthy. This might cost more than you planned, but it’s worth it. 

Communication Problems

It is possible to outsource a project to an external party and then never be able to get in touch with the partner when you need them. This happens for several reasons, such as them living in a different time zone than yours or having a preferred communication method different from how your business communicates with employees. Before outsourcing, ensure the other party is aware of your business hours and is willing to work those hours no matter what time it is in their time zone. Also, confirm that they can communicate using your preferred mode of communication, whether it’s phone, e-mail or other messaging apps. Finally, they should make sure they have uninterrupted internet and electricity access.

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Interesting Related Article: “Global Reach, Local Impact: The Power of Outsourcing“