What is IT Outsourcing and Why is It Necessary?

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The adage about working smarter, not harder, falls firmly under “easier said than done.” Still, it’s becoming increasingly within reach when it comes to IT. Due to the growing popularity of outsourcing IT functions and all the cost savings and service improvements this trend brings.

Outsourcing their IT needs enables companies through software development to put the effort and budget they would have spent on that aspect of their business into more productive areas. At the same time, the companies that take care of that outsourced work can put their focus entirely on IT services. It also opens up an entire global market of competition. Traditionally, a company would hire employees who lived locally for most IT work. IT Outsourcing services can be anywhere in the world.

Focus and Specialization are Key

There was often a tipping point where businesses became so large that they tried to bring as much of their operation “in-house” as possible. While this is often initially cost-saving, it was a premise built on considerably less agile industries with fewer alternatives. It would often lead businesses to become “bloated” and push them to make concerted efforts to restructure to focus on their core business model.

IT outsourcing enables this as it takes that whole aspect off of the business’ plate, freeing up those resources to focus on the things that more directly affect the bottom line. At the same time, the company that is being outsourced to is focusing on its core business model, which is delivering IT services to other businesses.

The result of this arrangement is often that businesses take a lot of expense and labor off their books, but they also get better IT services than they would have on their own.

Effectively Subsidised Costs

Another aspect of outsourcing IT that makes it worthwhile is the expense. The software development that an outsourcing company takes care of is not priced on a one-to-one model. Essentially, they are not charging for a one-off application or bespoke service for each company they serve.

Indeed, companies that handle outsourced IT will typically have many clients, though the service they deliver is, in broad terms, the same. In the same way that a factory can mass-produce items more cheaply than it can make one-off items, an outsourcing company can deliver IT services more cheaply to dozens, even hundreds of businesses than it can to just one.

This results in a situation where many businesses can spend considerably less to outsource their IT services than they would have spent to take care of the services themselves.

Tech Support

Of course, the IT services themselves are not the only thing companies who outsource their IT no longer need to worry about; there is also tech support. Providing adequate tech support—both to employees and, in some cases, customers—is often an expensive business. This is why support itself is often outsourced. Companies that handle outsourced IT will typically take care of any support requests for their services, removing another demand on their client’s time and money.

Conclusions: Lean Businesses Run Smoother

On the back of multiple financial crises over the past few decades, businesses are increasingly learning the value of running leaner, a state of affairs that gives them more “wriggle room” if and when times get tough. Outsourcing IT services to an experienced company is one way to ensure that the business is not taking on any more than it has to. The added bonus might be that the resulting services are often better than they would have otherwise.

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