When Should Your Business Consider Outsourcing IT Roles?29 Aug, 202312 minutes
IT outsourcing is becoming increasingly popular with global organizations in the tech sector...
IT outsourcing is becoming increasingly popular with global organizations in the tech sector and further afield. According to Statista, the IT outsourcing services market is set to be worth $430 billion in 2023, rising to over $777 billion by 2028. But what is IT outsourcing, and why should your business consider utilizing it?
In this guide, we’ll answer this question while also introducing you to the key factors to consider when outsourcing IT support services. We’ll also discuss the advantages and disadvantages of outsourcing.
What is IT outsourcing?
IT outsourcing refers to the external third-party service businesses use to support their IT needs and overcome any tech challenges they may face, from talent shortages to keeping up with the latest technologies. Whether using an outsourced IT provider to help with all of their internal IT deliverables or focusing on specific hardware and software infrastructure the company needs assistance with, the services provided by IT outsourcing can cater to almost every aspect of IT.
Here’s a summary of some of the services you can utilize through IT outsourcing:
- Help desk and technical support
- IT infrastructure management
- Cyber security
- Artificial Intelligence and Machine Learning
- Application development and maintenance
- Data center management
Outsourcing IT services can help fill your vacant IT roles and provide your organization with the latest IT infrastructure to support your business operations, regardless of the industry you operate in and the size of your company. Outsourced IT essentially works on a contract basis and typically consists of three types, which we’ll cover in our next section.
Types of IT outsourcing models
There are several types of IT outsourcing models your business can utilize, and each comes with its advantages and disadvantages. Three of the most commonly used IT outsourcing models are onshore, offshore, and nearshore outsourcing.
Let’s delve into these three and outline what they are and their advantages and disadvantages.
Onshore outsourcing involves recruiting professionals who are either based in your location or nearby. Opting for this approach enables you to maintain better control over the operations of the outsourced IT service provider you partner with while keeping costs to a minimum.
Advantages of onshore outsourcing
- Convenience due to location and time zones makes access to support easier
- Close communication with the IT outsourced service provider
- Cultural similarities with the outsourced talent filling your IT roles
- Can provide onsite or remote IT support
Disadvantages of onshore outsourcing
- Can lead to higher costs due to shortages and competition for talent
- Potentially limited access to resources if you’re based in a competitive area
Offshore outsourcing is another of the most commonly used IT outsourcing models. It refers to the practice of an organization hiring a third-party supplier to carry out operations from a foreign country.
Advantages of offshore outsourcing
- Typically involve lower costs
- Access to a broader pool of skilled resources to fill your open contract IT roles
Disadvantages of offshore outsourcing
- Distance could be an issue if your provider is based in a different time zone
- Cultural differences and language barriers could cause communication issues
Nearshore outsourcing is the practice of delegating IT-related tasks to a company in a neighboring country. So, for the US, nearshore outsourcing could be done with neighboring countries such as Canada and Mexico. This arrangement facilitates more accessible travel and communication between the two organizations.
Advantages of nearshore outsourcing
- Many of the same advantages as onshore outsourcing, but at a lower cost
- Communication and travel are easier due to sharing a border with the provider
Disadvantages of nearshore outsourcing
- Could be potential cultural differences and language barriers
- Potential limited talent as the US only shares borders with Canada and Mexico
Now you know the three main types of IT outsourcing models, let’s move on and explore some of the key factors to consider when outsourcing IT support services for your IT roles.
5 key factors to consider when outsourcing IT support services
Before you immediately jump straight into outsourced IT services to help fill your vacant IT roles, it’s essential to consider if and why outsourcing IT is the best option for your business. For example, if you need to scale your IT team quickly or you’re struggling to source top talent to complete your projects on time or for other similar reasons, then IT outsourcing could be the perfect solution you need.
This section will delve into these examples and help you determine why IT outsourcing could make sense for your business. So let’s explore 5 key factors to consider when outsourcing IT support services.
1. There’s an urgent need to scale your IT team
An urgent need to scale your IT team is one of the most significant factors to consider when outsourcing IT support services.
Perhaps your organization is experiencing exponential growth to the point where you no longer have the resources to realistically take on more work or the time to go through the onboarding process to hire permanent staff. However, simultaneously, you're at the point where you can't afford to turn down any new business due to the worry of falling behind the competition that is also scaling by the day. In this scenario, you may want to consider IT outsourcing.
By partnering with an outsourced IT services company, you can fill your IT roles with talent almost immediately, so you can take on more projects without stretching or burning out your existing IT team.
2. You’re struggling to fill your IT roles with top talent
Another one of our key factors to consider when outsourcing IT support services is if you're finding it challenging to fill your IT roles with the top talent you desire.
Perhaps you're struggling to hire permanent IT professionals with the skills you require to meet your specific needs and cover the skills gaps within your IT team that you need to fill to complete a particular project. In that case, turning to an IT outsourcing company could be a viable solution.
Outsourcing IT services can help you find the top talent to fill your IT roles by tapping into their existing network of contract IT professionals equipped with the necessary skills to combat your challenges and support your future projects.
3. Tasks are taking too long to get completed
If tasks and projects are taking too long to get completed, are going over budget, and are ultimately failing to meet your client's expectations, then this is another indication as to why outsourcing IT services makes sense for your organization.
Outsourced IT professionals can resolve this issue, whether due to your staff having too much work to feasibly cope with or your existing talent lacking the credentials to complete projects on time.
An outsourced IT contractor can come into your business and support your existing IT team to get their tasks over the line, on time, and within budget. Their expertise can go a long way to helping your existing staff to be more organized and efficient with their time while also acting as a source of knowledge your internal team can learn from.
4. You lack the resources to onboard or train your IT staff
Following on from our previous point, another one of our 5 key factors to consider when outsourcing IT support services; you may find value in IT outsourcing if you require support in onboarding your IT roles and training your existing talent.
Outsourced IT professionals are typically experienced and more senior, meaning they can bring a wealth of experience on a contract basis to advise with optimizing your onboarding process and training your more entry-level and junior IT talent.
Whether they spend six days or six months within your organization, IT outsourcing specialists can act as the necessary resource you need to onboard and train your people in a way that complements your talent attraction and retention schemes.
5. It makes financial sense to outsource your IT roles
Our final factor to consider when outsourcing IT support services is whether it makes financial sense for your business to outsource your IT roles.
For example, you may not have the budget to invest in the IT professionals you need to support your organization, having factored in the salaries and employee benefits you'd need to account for. In this case, IT outsourcing may be the alternative solution you need as it is often a more cost-effective solution, something we'll touch upon later in the guide.
Additionally, you may have found that the permanent talent you have invested in hasn't met your expectations and has perhaps cost you more money due to projects missing deadlines and mistakes being made. Outsourcing your IT roles to experienced contractors with the expertise to meet and even exceed your expectations could prevent this issue from occurring while allowing you an increased chance of seeing an ROI.
Now that we’ve covered the 5 key factors to consider when outsourcing IT support services, let’s expand on these considerations by exploring the advantages and disadvantages of outsourcing IT.
Advantages and disadvantages of outsourcing IT
When it comes to the advantages and disadvantages of outsourcing IT, there are many to consider. In this section, you'll find that the advantages and disadvantages we discuss will link to what we've mentioned in our section on the factors to consider when outsourcing IT support services.
Ultimately, we've chosen to delve into these advantages and disadvantages to help you determine whether IT outsourcing is right for your business. So, let's begin with the advantages of outsourcing IT.
Advantages of outsourcing IT
The advantages of outsourcing IT services we'll discuss in this section include the greater flexibility it can give you, the access to a wider talent pool it can provide, and the solution's cost-effectiveness from a monetary and time perspective. These advantages will provide you with a better understanding of why outsourcing IT services can be the solution you need to support your IT roles and ultimately benefit your organization.
1. Outsourced IT services give you greater flexibility
One of the most significant advantages of outsourcing IT is how it can offer greater flexibility to your business. This benefit links back to the need to scale urgently, which we mentioned in our 5 key factors to consider when outsourcing IT support services.
With outsourced IT services, you have the flexibility to decide the type of professional you need to fill your IT roles and for how long. For example, suppose you're working on a project with a timeframe of six months that requires a specific skill set for the duration of the project. In this case, IT outsourcing allows you to take on the individual on a contract basis for the precise time you require them.
Additionally, you could use IT outsourcing as a way to trial a particular skill set within your business for a set period. For example, you may want to bring in someone with specific expertise in cyber security to protect your networks from attacks. You could bring this outsourced talent into your business on a short-term basis to assess whether making a permanent hire or continuing to pay a contractor for this service makes financial sense.
Ultimately, all this greater flexibility removes the stress you may get from hiring a permanent employee in terms of budget. With IT outsourcing, you have the flexibility to pay for the services you can afford, whether it's 24-hour assistance or one day a week, without the fear of overspending or committing to a long-term deal.
2. IT outsourcing opens the doors to a wider talent pool
Another one of the advantages of outsourcing IT we believe needs highlighting is how the third-party service can open the doors and provide you access to a wider talent pool.
If you've been struggling to find the top talent you need, whether it's a particular skill set you're looking to acquire, a certain level of experience you need, or someone in another location who can help you move your business into new markets, an outsourced IT service provider can help you source the people you need.
IT outsourcing agencies will have access to a broad spectrum of diverse talent globally that meet the specifications of your most niche IT roles. As the outsourced talent will predominantly be contractors, these individuals will have prior experience working within your industry and on similar projects, so they will be able to offer the expertise you require to hit your targets.
3. Outsourced IT support can save you time and money
IT outsourcing can save your organization time and money when it comes to finding the resources to fill your IT roles. In terms of the advantages of outsourcing IT, this is one of the biggest reasons why outsourcing IT services is commonly used by businesses of all sizes worldwide.
From a time-saving perspective, IT outsourcing is beneficial if you need to make a short-term hire at a moment's notice. Due to an outsourced IT provider often having exclusive access to some of the best professionals within your niche, they can call upon the contractor you need to start working on your projects almost immediately. This is particularly advantageous if you're rushed to complete a project or don't have the in-house resources to recruit internally.
As for the monetary advantages of outsourcing IT, one benefit relates to recruitment in the sense that you won't have to account for onboarding or training expenses. Your outsourced IT contractor will come fully equipped with the skills you need to hit the ground running with no training and no real introduction needed, as they'll be experienced enough to get straight into the job.
Additionally, as an outsourced IT professional is not a permanent or an official employee, you don't have to factor in paying their salary or company benefits, something we mentioned earlier. This is another cost-effective advantage of IT outsourcing while also saving you time, as you won't have to worry about organizing all the contracts and negotiations regarding salaries as this is dealt with by the provider you partner with.
Another final cost-effective advantage of IT outsourcing is that the contractor you are provided with will come with their own equipment, or the provider you're using will supply the hardware and software infrastructure you need for the duration you invest in.
Disadvantages of outsourcing IT
In comparison to the advantages we've outlined, the potential disadvantages of outsourcing IT could consist of miscommunications with the provider, the third party not meeting your expectations, and a potential risk to security issues. These disadvantages shouldn't act as a deterrent; we've chosen to mention these to give you a transparent view of both sides of outsourced IT services.
1. Outsourcing IT services could lead to miscommunications
One of the main disadvantages of outsourcing IT is the potential for there to be miscommunications between your internal IT and the third party you partner with.
For example, if you come across a network issue that needs troubleshooting by your outsourced provider, they may be slower at responding to your request. This could occur if the IT outsourcing company has other organizations to support before you, is in a different time zone, or there is difficulty regarding language barriers.
To avoid issues like this, make sure you find a provider that speaks the same language as your IT staff, has a clear communication or support service you can follow, and can offer support during your regular and out-of-office hours. Of course, many IT outsourcing firms can cater to all of the above and give you a point of contact you can refer to when needed.
2. An IT outsourcing company may not meet your expectations
Following on from the previous disadvantages of outsourcing IT, another potential con is that the provider you partner with fails to meet your expectations. For example, if the outsourced IT services provider fails to deliver the specific contractors you need to fill your interim IT roles or connects you with the wrong type of talent, you could fail to deliver your projects.
Of course, this disadvantage can be avoided by researching the third-party provider before partnering with them to ensure they have an established reputation for supporting organizations with similar needs to yours. You should also put in place a service level agreement to ensure expectations are agreed upon from both sides, and any issues like the one we’ve mentioned above can be avoided.
3. IT outsourcing could increase your security risk
Another one of the disadvantages of outsourcing IT you need to address is the potential increase in security risks. Why could this happen? Hopefully, it won’t happen, but when you partner with a third party, they may require you to give them access to your sensitive data. This could be the case if you take on an outsourced cybersecurity contractor.
By leaving your data in the hands of an outsourced IT services provider, your intellectual property can be breached. Of course, the same issue could occur by hiring a permanent employee who exploits your business and creates insider threats, so this disadvantage shouldn’t put you off outsourcing your IT roles.
You can avoid issues like this and give yourself greater peace of mind by communicating concerns with the provider before you partner with them and asking them to provide security risk audits on a recurring basis to ensure your security is in safe hands.
The Final Word
Now you understand what IT outsourcing is, the 5 key factors to consider when outsourcing IT support services, and the advantages and disadvantages of outsourcing IT, you’re in a prime position to determine whether this solution is right for you.
Whether you’re ready to invest in IT outsourcing now or feel it could benefit your organization in the future, the option to do so is always there for your business when you require external support.
If you require further information on how to grow your IT team and the roles that can be outsourced, read our guide on how to build a successful IT department structure.
Specialists in IT operations and support recruitment
At Franklin Fitch, we recognize how essential IT operations and support are to our client's IT infrastructure. Our specialist recruiters work closely with your organization to determine your recruitment process outsourcing (RPO), and contract recruitment needs when attracting contractors of all levels for your open IT roles. We'll help connect you to the top talent you need to build your IT department and drive your business's long-term success.