Why Is IT Outsourcing the Most Important Business Decision to Make in 2020?

In the fast-paced, digital, and modern business world, IT outsourcing has become a necessity. For some of the most successful CEOs of small, medium and large companies today, choosing a quality IT outsourcing partner is a key strategic decision. Outsourcing IT operation, by definition, is a business process during which a company hands over a portion of its business activities to specialized partners in order to improve its operations.

A partner company claims responsibility for the functioning of that service, committing itself to a series of contracts that guarantee the confidentiality and level of service that the partner company is obliged to fulfill.

There are numerous reasons why companies choose to outsource specific operations. Most often they are of a financial and organizational nature, but they can also be the result of occasional business process consolidations in order to improve business policy.

Leading Companies Have Recognized the Need for Outsourcing

Companies like Google, Alibaba, Opera, WhatsApp, and many others have been successfully outsourcing their IT within their business development strategy for years. Be assured, the fact that these companies whose businesses are based on innovations in the information technology industry are exactly the biggest users of IT outsourcing isn’t coincidental at all.

Leading business experts have recognized the need for IT outsourcing that brings benefits and opportunities and provides their companies with a chance for development. However, this trend can also be applied to companies of any size, even startups. The right IT outsourcing partner will offer a customized solution tailored to your business’ needs in order to optimize costs.

The Market Dictates Trends

Statistics show that global outsourcing market revenues were growing by 3.88% annually, on average, from 2000 to 2019. In 2020, the outsource and remote IT business services market is estimated at hundreds of billions of U.S. dollars. Actually, it will reach 405.6 billion U.S. dollars by 2027. So, without a doubt, it’s a growing market bringing an increasingly innovative solutions year after year, while the business model itself offers many opportunities for investment, whether in providing network solutions, development, or some other service.

Outsourcing – a Solution That Changes the Rules of the “Game“

From a technical point of view, companies are obliged to regularly work on the implementation and development of new technologies, follow the necessary regulations, and ensure compliance. However, for a decade or so, current market trends haven’t been going into favor for the development of in-house IT solutions. The lack of trained IT professionals, the growing demands of a dynamic market, the global trend of digitization, and the increasing tendency of digital transformation within business organizations have opened up the need for innovation that will bring about change in the field of business. It’s these factors that have made IT outsourcing an innovative solution that changes the rules of the “game“.

Main Advantages of It Outsourcing Over Traditional IT

Control of IT Costs

With IT outsourcing, there’s no need for unpredictable capital investments, but payment for the service is made through specified operating costs. As a positive result, this allows you to more easily control and predict costs, as well as flexibility, ie. acquiring services to meet your IT needs.

Workforce Cost Optimization

For most companies, hiring additional IT staff can be expensive and demanding. Consequently, with IT outsourcing, your employees can be hired where you need them most, while you can easily outsource your IT to a trusted IT partner.

Expertise and Experience

While you keep on working on a variety of IT projects with different clients, your IT partners acquire substantial knowledge that they are ready to apply to your company as well. With IT outsourcing, you have a single point of contact for all your IT services needs.

Rapid Implementation of New Technologies

When it comes to new IT projects, a reliable IT partner has enough resources to start implementing them as soon as possible. Executing the same projects within the company often requires finding and training new IT staff, which can take weeks and months.

Focus on Business

Business involves managing resources where every decision-maker has limited time and attention. IT outsourcing can enable your management to focus carelessly on what matters most to your business, placing less focus on complex IT decisions.

Lower Business Risk

Every business decision brings with it some risk. With IT outsourcing, you share that portion of the risk with your partner who’s in charge of managing one piece, often big piece, of it. This is achieved with the experience, expertise and specific knowledge of the industry, especially when it comes to IT security and regulatory compliance.

Access to Advanced Technology

Many small companies can’t afford the internal solutions that large companies own and maintain. That’s why IT outsourcing is important – it can give small companies access to similar technology and expertise enjoyed by large companies, making them more competitive in the market.

Consistency and Data Security

With IT outsourcing, your company can count on constantly legal and updated software and top-notch hardware, as well as data backup for extra protection. In order to get guaranteed performance and availability of the services you agreed to with the IT partner, a Service Level Agreement (SLA) is signed with them.

What Does IT Outsourcing Look Like in Practice?

Solutions from companies that are specialized in this niche allow you to easily outsource your complete IT infrastructure with an easy way to plan costs. The service is generally billed through a monthly invoice with no hidden or additional costs. There are various packages at the disposal, the size of which depends on the number of computer users in the company, as well as additional services through which you can meet all IT needs in one place. If we were to break outsourcing services into basic components, it could look like this:

  • Physical IT infrastructure installed on your location: physical and virtual server(s) with required licenses, UPS and backup device, Active Directory, VPN router, firewall, and antivirus.
  • Cloud IT framework: Cloud backup, Cloud router, email, and website hosting. Speaking of hosting, if you’re a company running a very popular relational model database server such as MySQL server, you can outsource support to manage your database servers to specialized providers. They will secure the installation of MySQL, patch updates, Slow Query optimization, etc.
  • 24/7 IT support: monitoring and maintaining the IT infrastructure.

Business Factors That Are Favorably Influenced by It Outsourcing

1. Time

Business always takes more time, but it’s impossible to create it. Outsourcing IT jobs saves time and energy of your employees. A focus is shifting to the primary business of your brand, while IT is in the safe hands of professionals. In this way, you increase efficiency and allow more time for business development.

2. Money

Outsourcing is almost always a cheaper option. When your IT becomes the concern of your outsourcing partner, you’re always at a profit. By hiring an outsourcing partner for IT, you fully manage your business budget. Choose the services that suit your needs solely – when you need them and to the extent you need them. Thus, you’ll save money, which you can divert to other segments of your business.

3. Productivity

Smaller businesses, logically, have smaller resources, too. In these conditions, it’s of the essence to ensure that you get the most out of your team. How to do that? By allowing your employees to do what they know best. IT outsourcing releases you of a large number of activities and jobs, on a daily, monthly and annual basis. This way, your team remains focused and dedicated to the business and the development of their skills. More importantly, it’s efficient – which delivers the best results.

4. Flexibility

In business, nothing is static. Due to the constantly fluctuating supply and demand, you always want to have an IT solution that meets your needs. Although they might seem practical at the beginning, in-house IT solutions proved to be slow, rigid and expensive in the long run. Outsourcing remains the only way to get an IT solution that’s fully customized to your needs.