The 3 W’s of Outsourcing IT Services
Staying competitive today means capitalizing on technology and digital transformation.
However, hiring the skilled talent needed to keep pace often either isn’t possible or doesn’t make sense given the mix of skillsets required, the short-term nature of projects, or any number of other factors.
Instead, organizations frequently turn to the information technology (IT) outsourcing industry for many or even all their IT needs.
In this article, we’ll look at some basics surrounding IT outsourcing and staffing and talent services, including:
- What is IT outsourcing?
- Why do organizations outsource IT services?
- Which qualities to look for in an IT service or staffing provider?
What Is IT Outsourcing?
IT outsourcing refers to hiring a third-party company to perform IT functions or tasks on behalf of an organization. According to Deloitte’s 2021 Global Shared Services and Outsourcing Survey Report, organizations seek out specialized IT service providers 54% more often than other types of business services.
Almost any IT function can be outsourced to a third-party provider, depending on the needs and goals of the organization. Frequently, however, these functions fall under the umbrellas of “professional services” and “managed services.”
Professional services. Professional IT services generally address projects of a limited scope and duration that are carried out by a team of trained and highly skilled technical professionals, such as software engineers, data scientists, data analysts, project managers, and other technical consultants. Projects might include reporting features, dashboards, or even data and analytics plans and strategies.
Managed IT services. Managed services providers (MSPs), on the other hand, manage certain IT functions or tasks on an organization’s behalf and on an on-going basis. Tasks may include managing networks and infrastructure, data center operations, cloud computing, application maintenance, and more.
IT talent& staffing services. Staffing agencies are another type of MSP. These providers manage activities related to sourcing and recruiting highly skilled technical candidates for placement on team projects, augmenting the capabilities of existing teams, and so on.
Why Outsource IT Services?
The notion of hiring a third-party service provider to handle non-core business functions began as an efficiency measure. As organizations reduced their administrative burdens, they were able to focus more heavily on strengthening those functions core to their business mission, thereby allocating resources more efficiently.
Since recognized as a formal business strategy in 1989, outsourcing of various business tasks, especially IT ones, has exploded in popularity. A report by Infiniti Research Limited says that the global market for outsourcing tech services is expected to grow by nearly $98 billion between 2020 and 2024.
Increasingly, organizations at different stages of growth are recognizing an even wider variety of benefits from outsourcing IT services. For example:
IT service providers can help businesses scale their growth with the efficiency and flexibility that uncertain economic times require. Sourcing skilled talent on a project-by-project basis rather than having to hire additional full-time employees helps brands control their scale of growth.
Extra support can also help businesses and teams advance programs and meet other short- or long-term goals, like bringing products to market quickly.
Reduced and controlled operating costs:
Outsourcing allows organizations to save money they might otherwise invest in sustaining or strengthening non-core— yet essential — business activities. This savings helps organizations stay competitive, keep headcount down, and retain control over expenditures on projects planned in advance.
Globalization can allow for additional savings to organizations when service providers source offshore or near-shore skilled talent. By leveraging lower labor costs in some regions, the company can reduce its overall expenses without compromising on quality or efficiency.
Optimized business processes:
IT service providers with focused expertise often perform specialized services better and more cost effectively, allowing organizations to reach or surpass competitive advantage.
Those providers with access to a global talent pool are able to tap into an even wider pool of talent, including highly skilled professionals who are available during non-traditional work hours. This can help the company to provide specialized services and expertise that might not be available locally.
Increased business value:
But the benefits of outsourcing aren’t all quantitative, says digital magazine, CIO.
“IT and procurement leaders should integrate more qualitative benefits into their outsourcing scorecards,” they say, and “shift the outsourcing narrative to business value” [emphasis added].
In other words, leaders should begin highlighting how sourcing high caliber IT talent provides benefits beyond saving money — benefits, such as:
- Access to specialized expertise: Outsourcing provides an opportunity for accessing specialized skills and expertise not available in-house. Fresh, innovative ideas from outside the company can be invaluable, and IT service providers worth their salt will transfer knowledge to internal staff throughout the service partnership. Service providers with a global reach and in different time zones can tap into a wider pool of talent, including highly skilled professionals who are available during non-traditional work hours. This can help the company to provide specialized services and expertise that might not be available locally.
- Employee morale. The impact of outsourcing on employee morale will ultimately depend on specific circumstances and how decisions are communicated and implemented.
- Expanded service hours. By leveraging time zone differences, those IT service companies with a global footprint can provide round-the-clock services. This helps ensure work is completed quickly and efficiently and can reduce turnaround times for projects and tasks.
However, outsourcing brings potential for improved employee morale, especially when employees are freed up from administrative or mundane tasks that give them more time to focus on core competencies and tasks aligned with their skills and interests.
Improved customer service:
By leveraging the expertise and resources of specialized providers, outsourcing can help organizations offer better customer service. For example, outsourcing technical support to a provider with a team of highly trained technicians can help a company resolve customer issues more quickly and effectively.
In addition, global IT service companies may be able to offer round-the-clock service and expand customer service to clients in different time zones. This can help build stronger relationships with clients and improve overall customer satisfaction.
What should I look for in an IT service partner?
When evaluating different IT service partners, remember to look for providers that:
- Will prioritize your customers
- Have, or can access, productor service expertise
- Are collaborative regarding processes and procedures
- Have a record of responding to clients quickly
- Take the upmost precautions with your company’s data and follow compliances like GDPR.
Here are a few more important factors to consider:
☐ Do they have the expertise to understand your industry’s specific needs and challenges?
☐ Does the provider have a strong track record of successfully delivering similar projects or on-going services?
☐ Are they able to clearly articulate their approach and can they effectively communicate with you and your team throughout the project?
☐ IT projects can be unpredictable. It’s important to work with a partner able to adapt to changing circumstances and willing to go the extra mile to ensure project success.
☐ Will this provider be detail-oriented and insist team members are thorough and methodical? Will all aspects of the project be properly planned and executed?
☐ Is this service provider responsive, willing, and able to address issues in a timely manner?
☐ Is the company professional in their demeanor and approach to their work? Are they punctual, respectful, and do they follow through on commitments?
☐ Is this provider up to date with the latest technologies and approaches? Valuable providers often bring fresh ideas and solutions to the table.
☐ Does this provider prioritize client needs and give excellent customer service? A valuable service provider will do the following:
Care about client goals and objectives
Listen carefully to understand all of the client’s needs
Deliver the appropriate advice or level of service
Outsourcing can provide significant value to organizations by enabling them access to resources, expertise, and sometimes even the global reach they need to support operations and achieve business objectives.
Wimmer Solutions works with organizations to understand their needs before developing a customized service plan to meet them.
Our expert IT professionals support your ongoing staffing needs using streamlined and efficient processes for recruiting and managing contingent staff. Clients may request access to our highly skilled teams on a project-by-project basis or they may employ temporary workers through our recruitment efforts.
With offices across the globe, including the US, Europe, Kazakhstan, and the Philippines, Wimmer Solutions provides services across time zones, which can help clients reduce and control operating costs, provide round-the-clock coverage, and increase business value.
For more information about outsourcing information technology services with Wimmer Solutions, visit us at www.wimmersolutions.com or contact us today for a consultation.