How To Build an Effective IT Outsourcing Strategy
The contemporary business market is defined by constant changes and digital acceleration. Companies, regardless of industry, strive to adapt to new trends, further develop their business and attract new clients. In order to keep thriving and achieve the best results, businesses choose to digitize their work with the help of outsourcing.
In the business world, IT outsourcing has long been a well-known concept and practice. However, every company should find its own outsourcing model. Since the core business can vary, the right outsourcing model can decide the success or failure of a company’s future outcomes. This is why it’s so important to learn how to build an effective IT outsourcing strategy.
What is IT outsourcing?
Simply put, IT outsourcing is the practice of hiring third-party providers of IT infrastructure and services. Both big companies and startups opt for IT outsourcing depending on their in-house team and business requirements. This allows them to focus on their core business and achieve better results. Here are some of the most frequent examples of IT outsourcing services:
- Software development
- Web development
- Website or app testing
- Application maintenance and support
- Technical support
- Database management
- Infrastructure management
- Disaster recovery
- Data cloud storage
- IT consulting
Knowing what IT solutions can be outsourced is of critical importance before you start building your IT outsourcing strategy. So, how do you build one?
Building an IT outsourcing strategy
Why is it essential to have an outsourcing plan? First and foremost, it reduces the risk of business moves that can jeopardize your projects and the company’s future. At the same time, it’s a cost- and a time-saving step-by-step strategy that can keep you on track to your desired goals.
Furthermore, a plan allows you to track progress, increase productivity and maintain high-quality standards. Now, once you have decided to allocate business tasks to external providers, let’s see the key points in building an effective strategy.
1. Decide if and when you need outsourcing.
Consider these questions:
Does your company have to deal with too many time-consuming ancillary business tasks?
Has the number of your projects increased?
Do the client’s new requirements exceed the capabilities of your internal team?
If the answer is yes, it might be the right time for your company to outsource. Make a detailed analysis of the productivity of your internal departments and compare it with your company’s goals. Also, this can be very helpful in your next step.
2. Define your outsourcing requirements.
Knowing what to outsource is as important as knowing when to do it. Many companies opt for outsourcing for cost-saving reasons only. However, it’s crucial to outsource the right resources for the right reasons. Whether you’re expanding your services or establishing new ones, searching for a time- and cost-effective strategy, or determining your objectives, reveals your company’s needs. Look at your business plan for the end product and define the required skills that will meet your expectations and business goals.
3. Determine the best IT outsourcing model.
You should research the three most common engagement models to establish the best collaboration with an IT outsourcing company.
The first one is a project-based model. It provides a clear project agenda and results, saves time for your in-house team, and the hired company carries full responsibility for the project from the first to the last step. On the other hand, your company has less control over its own project, and the results can be unsatisfactory.
The second one is a dedicated team model. Basically, this includes a remote team of developers working full-time exclusively on your project. This engagement model is best for complex long-term collaborations. It gives your company more control over the development process and flexibility. It also allows you to collaborate with experts from specific industries, and the final product meets your required standards. However, the shared responsibility for the project and the lengthy recruitment process are the disadvantages of this model.
Third, and the most common, is staff augmentation. It involves hiring individual experts with specific skills needed for your project. It’s best for short-time projects when you don’t need the whole team, but at the same time, you can hire as many professionals as your project requires. Also, sometimes certain stages of long-term projects require a specific skill to move forward, which can be acquired through staff augmentation. Even so, you can spend a lot of time searching for the right employee and their integration into your company.
4. Calculate your costs.
Estimate your budget carefully. What are you paying for, and what are your payment terms? Take into account all the possibilities of hidden and unexpected costs. Carefully consider your desired result and what you can afford, and find the best middle solution. Form your contracts and terms in detail to have everything crystal clear.
5. Choose an IT outsourcing manager.
A good outsourcing strategy implies clear communication between your company and third-party service providers. Depending on how many external partners you have and how many non-core functions you outsource, it can be tricky to monitor your project processes and progress. Therefore, it might be a good idea to have an internal employee who will play the role of the outsourcing manager. Thus, the manager can monitor processes and changes in project requirements, provide updates and information between the company and its partners, and ensure the joined forces reach the desired goal.
Here’s a small tip for the end
Sometimes, building an effective IT outsourcing strategy can be challenging. Even if you have already implemented all of the above, you can see that something’s still not working. In that case, consider the help of an expert consultant to have the best outsourcing experience.
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