IT services outsourcing: factors to take into consideration

 min read
14 February 2022
Jakub Urban
Jakub Urban
Marketing manager
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Contents

  • Intro

Outsourcing IT services can be a great way to reduce costs and improve efficiency within your company. However, before you make the decision to outsource, there are several factors you need to take into consideration. In this blog post, we will discuss the most important factors you need to consider when outsourcing IT services.

What are IT services outsourcing?

IT services outsourcing is the process of contracting with an external organization to provide IT-related services. This can include anything from IT support and maintenance, to network management and software development.

Usually, businesses outsource IT services in order to reduce costs, improve efficiency, or obtain specialized expertise that they don’t have in-house.

What are IT services outsourcing benefits for businesses?

There are several reasons why you might opt for outsourcing services. Here are some of the most common reasons:

1. Cost savings

It is believed that businesses can save up to 60% on IT and operating costs by outsourcing IT services. This is because outsourcing IT services allows you to take advantage of the lower costs associated with offshoring, labor costs, and internal resources. 

It also eliminates the need to hire and train IT staff, which can be expensive. And, since most IT service providers have extensive experience in the field, businesses can avoid costly mistakes with their in house team or compliance issues and improve their IT efficiency, building a competitive edge the same time. 

2. Improved performance

With expert support from an outsourcing vendor, businesses can focus on their core competencies and improve overall performance and efficiency. IT service providers can help businesses to optimize their systems, upgrade software and hardware, and improve security.

They can also manage networks, databases, and other IT infrastructure so that your business can run smoothly and without interruption.

In addition, by outsourcing IT services you can access specialized skills and expertise that are not available in-house. Let alone cost reduction, which may be a great factor for your business strategy. 

3. Increased flexibility and scalability – businesses can quickly ramp up or down their IT services as needed

Businesses are often required to rapidly scale up or down their IT services in order to meet changing needs. Outsourcing IT services can provide the flexibility and scalability you need to quickly adapt to changes in your business, without hidden costs. 

4. Access to the latest technology and innovations

IT outsourcing partners have the latest technology, outsourcing trends, and solutions at their disposal, so you can stay ahead of the curve and take advantage of the latest innovations. They can also help you to deploy new technologies quickly and efficiently, so you can get up and running quickly without any disruption to your business.

5. Enhanced security and risk management

Businesses can reduce their exposure to data breaches and other risks by partnering with an experienced outsourcing provider. IT service providers have the necessary expertise and resources to manage risk, protect your data and intellectual property, and ensure compliance with industry regulations.

What factors do you need to take into account when deciding whether or not to outsource your IT services department?

1. What services do you need to outsource and what can you manage in-house

IT services can be broadly divided into three categories: infrastructure management, application development and support, and business process outsourcing. It is important to take a holistic view of wide range of your IT needs and decide which services and business processes are best suited for outsourcing.

Some businesses may choose to outsource all their IT services, while others may only outsource specific functions. It is important to tailor your outsourcing strategy according to your specific needs and requirements so you can build a fully functional outsourcing relationship.

2. How much are you willing to spend on outsourcing services

It is important to set a budget for IT services outsourcing and stick to it. Outsourcing can be expensive, so you need to make sure that the benefits outweigh the costs.

When calculating the cost of outsourcing IT services, you need to factor in not only the direct costs but also the indirect and hidden costs such as staff training and implementation expenses. 

However, for many, outsourcing still is way better for core business activities in terms of cost controls. That’s why it is getting increasingly more popular for a client company to outsource their processes even to a distant country, which in turn may be more cost effective over a particular period of time. 

3. What is the quality of service that you require from your IT provider

It is important to choose an IT service provider that can meet your high standards for quality and reliability.

Make sure to ask for references and testimonials from past clients, and do some research online to see what others are saying about the provider. This is a really important step because you don’t want to outsource your IT services only to end up with a provider that is not able to meet your expectations or cause only critical issues. If you choose the wrong software development company, you may see no benefits of outsourcing, and your approach to outsourcing will quickly worsen.

4. What type of contract will you sign with your IT service provider

Furthermore, you need to decide what type of contract you want to enter into with your outsourcing provider. There are three main types of contracts: fixed price, time and materials, and cost-plus, differing from each other when it comes to cost structure and core strengths.

Fixed price contracts are the most popular type, as they provide certainty about costs and help businesses budget for IT services outsourcing. However, it is important to make sure that the provider can meet your needs within the constraints of the contract.

Time and materials contracts are less common, but they offer more flexibility as providers are paid based on the amount of work they do. This type of contract is ideal for businesses that need to rapidly ramp up or down their IT services.

Cost-plus contracts are usually used when there is a high degree of uncertainty about the scope of work or when the business wants to share the risk with the provider.

5. How often should reviews be conducted to ensure that the relationship is working well for both parties

Outsourcing contracts should include regular reviews of core business objectives to ensure that both parties are happy with the arrangement. Reviews should be conducted at least every six months, but they can be more or less frequent depending on the needs of the business and the delivery team.

6. What type of company do you want to work with – a local provider or an international company

When selecting an IT services outsourcing provider, you need to decide whether you want a local or international company. Local providers tend to have a better understanding of the local market and can be more responsive to your needs. However, they may not have the same level of deep knowledge or expertise as all international providers.

International providers typically have greater experience and offer a wider range of services. However, they may be less responsive to local needs. 

It all depends on your business needs and core strengths. Make sure to specify them from day one to make your outsourcing relationship work like a breeze!

7. Do your research and ask for quotes from different providers

Before choosing an IT services outsourcing provider, it is important to do your research and ask for quotes from different providers. This will give you a better understanding of the range of prices and services available.

It is also a good idea to read reviews of IT outsourcing providers online to get a sense of what other businesses think about them. One of the most important core aspects of outsourcing is to make sure that the provider you choose is reliable and has a good track record.

8. Does the provider have a good understanding of your business and its needs

The provider you choose should have a good understanding of your business and its needs. They should be able to provide you with a tailor-made solution that meets your specific requirements, but also to build a long-term outsourcing relationship with your brand. 

If the provider does not understand the core aspects of your business, it is likely that the outsourcing project will not be successful. 

9. Sign a contract that outlines the services to be provided, the price, and the expectations of both parties

When outsourcing IT services, it is important to sign a contract that outlines the services to be provided, the price, and the expectations of both parties. This will help to avoid any misunderstandings down the road.

The contract should also include provisions for regular reviews so that both parties can assess whether the arrangement is working well for them.

How can you make sure that the outsourcing process goes as smoothly as possible for your business?

There are many benefits of outsourcing – but you can only see them if you take care of outsourcing relationship and ensure that all core aspects of it run well. Below, you’ll find a quick list of what can be done to make your approach to outsourcing a successful one. 

1. Make sure that you have a clear idea of what you want from the outsourcing process

IT services outsourcing can be a great way to improve the efficiency and performance of your IT department. However, it is important to make sure that you have a clear idea of what you want from the outsourcing process and what your business needs. If you are not sure what you want, it is best to consult with an IT outsourcing specialist.

2. Clearly communicate your expectations to the IT outsourcing company

It is important to clearly communicate your expectations to the IT outsourcing company. This will help to ensure that there are no misunderstandings about what is expected of them.

The IT outsourcing company should also be willing to provide you with a proposal outlining their services and pricing.

If you do it, IT services outsourcing can be a great way to improve the efficiency and performance of your IT department. However, there are some important factors you need to take into consideration before making a decision.

3. Work with the company to create a plan for transferring your data and systems over to them

When outsourcing IT services, you will need to transfer your data and systems over to the IT outsourcing company. It is important to work with them to create a plan for doing this so that there are no disruptions to your business operations.

The IT outsourcing company should also be willing to help you transition your staff over to their team. Furthermore, they should provide training and support to help your staff get up to speed with their new systems.

If you are considering IT services outsourcing, make sure that you take these factors into consideration. By doing so, you can ensure that the process goes as smoothly as possible for your business.

4. Stay in communication with the company throughout the process

It is important to stay in communication with the IT outsourcing company throughout the process. This will help to ensure that all your needs are being met and that the project is proceeding as planned.

The IT outsourcing company should also be willing to provide regular updates on their progress so that you can track their progress. They should come up with a communication plan that works for both parties.

5. Keep an eye on costs, and make sure that you’re not being overcharged for services

When outsourcing IT services, it is important to keep an eye on costs. Make sure that you’re not being overcharged for services and that the pricing is fair and reasonable.

The IT outsourcing company should be able to provide you with a proposal outlining their services and pricing. This will help you to compare different companies and make an informed decision about

6. Don’t be afraid to ask questions or raise concerns if something doesn’t seem right

If something doesn’t seem right during the outsourcing process, don’t be afraid to ask questions or raise concerns. This will help to ensure that all your needs are being met and that the project is proceeding as planned.

The IT outsourcing company should be willing to work with you to address any issues that may arise.

What are some of the key things to look for when choosing an IT services outsourcing provider?

1. Make sure the provider has experience in your industry and the right skillset

When outsourcing IT services, it is important to make sure that the provider has experience in your industry and the right skillset. This will help to ensure that they are able to meet your needs and that the project goes smoothly, but also that you are not paying for services that you don’t need.

The IT outsourcing company should also be able to provide you with a portfolio of past projects they have worked on. Based on that, you can decide if they are a good fit for your business.

2. Ask about their security protocols and data backup plans

IT services outsourcing can be a great way to improve the security of your systems. However, it is important to make sure that the IT outsourcing company has strong security protocols in place and that their data backup plans are reliable.

By asking these questions, you can ensure that your data will be safe with them.

3. Check references and read online reviews

When researching IT services outsourcing providers, it is important to check their references and read online reviews. This will help you to get a better idea of what it is like to work with them and if they are a good fit for your business.

By doing your homework, you can be sure that you are making the best decision for your business.

4. Meet with the team and get a feel for their culture and work ethic

When interviewing IT services outsourcing providers, be sure to meet with the team and get a feel for their culture and work ethic. This will help you to determine if they are a good fit for your business.

You should also ask them about their process and how they would handle certain situations.

5. Discuss pricing and contract terms upfront

The IT outsourcing company should also be willing to provide you with a proposal outlining their services and pricing. This will help you to compare different companies and make an informed decision about your IT needs.

6. Get a written proposal that outlines all aspects of the project

When outsourcing IT services, it is important to get a written proposal that outlines all aspects of the project. This will help you to avoid any surprises down the road and ensure that both parties are on the same page.

Over and out

IT services outsourcing can be a great way for your company to grow and improve its IT infrastructure. By taking the time to do your research and ask the right questions, you can be sure that you are making the best decision for your business. If you’d like to get in touch with a reliable IT services outsourcing provider, we’re here to help!

Start IT services outsourcing right away!

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