Uncertainty inevitably sets in every business. Nobody is certain which technology or tool is going to hit the market. And, to keep up with the new, companies have to use outsourcing. It helps them stay upright against the competition, adapt to new technologies and trends, and successfully sustain their business in the market.
To make all of that happen seamlessly, a perfect IT outsourcing strategy is needed. Without it, a business would probably not reap the benefits of enhanced dynamic capabilities, increased efficiency, strategic flexibility, and market-oriented innovation. Hence, a reliable IT outsourcing strategy is a must-have for successful business survival.
This post is all about the outsourcing strategies, their types, pros and cons of IT outsourcing strategies, and figuring out the best practices to follow for your business.
Without further ado, let’s begin!
What is Outsourcing Strategies – The Meaning
Outsourcing means searching and hiring a third-party service provider to complete certain tasks of the organization. The need for outsourcing arises when a particular project is either beyond the capabilities of your existing team or simply because they don’t have enough space to take up more projects.
So how do we build an outsourcing strategy?
Outsourcing strategy is built after the thorough analysis and assessment of the functions your outsourced team needs to perform. Then, the company plans the strategy to complete specific projects successfully with the assistance of a third party. Usually, the third party has all the tools and a qualified team to handle your task within the deadlines.
Outsourcing Strategies: The Advantages and Disadvantages Explained
The external cooperation that you are willing to hire will bring in some advantages and disadvantages as well. Your strategy needs to be robust enough so that it works in your favor. Further, let’s discuss both sides of outsourcing a team before you hire one.
Let’s start with the advantages first!
Advantages of Outsourcing Strategies for your Business
- Major Cost Cutting
Amongst the most prominent benefits of outsourcing is cost-cutting. Usually, the third parties (from specific countries) will charge you way lower than you would even expect. However, that doesn’t mean you will compromise on the quality. The cost of living in such countries is lower, hence leading to diminished expenses, which is a plus for your business.
- Efficiency Boost
The ultimate motive of outsourcing is to get access to specialized skills. So, when such a skilled team is added to your organization, it is bound to increase efficiency. The specialized outsourced team can help you deal with complex tasks and deliver the most effective results for your project. Since they have the required skills, experience, and expertise, there is no point in judging the efficiency.
- Much Time for Experimentation
Just imagine all the experts constantly striving to make your project a success. And, you and your existing team have enough time to experiment with other things. So, not only hiring an outsourced team gives you access to specialized skills, but it also gives your current team enough time to focus on other productive activities.
- Skilled and Experienced Resources
First, when you hire an outsourced team, you have access to skilled and experienced resources. Second, you need not invest in the latest technology or infrastructure; Since the outsourced team is already equipped with advanced tools and technologies, you barely need to invest in anything. Hence you save a lot of cost on tools and technologies as well.
So, we just saw how great outsourcing could be for any business, irrespective of its size and nature. It is highly recommended when you are on loads of projects or finding a specific skill that your existing team lacks. Moreover, an outsourced team can simply be a valuable addition to your current team.
Now, let’s check out some disadvantages of outsourcing, in case it is not done right.
Disadvantages of Outsourcing Strategies for your Business
To avoid facing any disadvantage of outsourcing a not-so-good team or allowing the wrong team to access your valuable resources, the only thing you need to do is thoroughly research the team that you are going to hire. You can’t trust anyone but the best. Hence, you will have to spend plenty of hours researching about them, verifying their work with previous customers, and checking their market value before finally choosing them for your organization. You can go through their reviews and ratings online, besides reaching out to their previous customers.
Types of Outsourcing
First, let’s take a look at the types of outsourcing techniques.
- Onshore – Finding third-party services in the same country
- Offshore – Hiring a team from distant countries
- Nearshore – Picking team from the neighboring countries.
Different Outsourcing Strategies
Outsourcing strategies have developed in the past few years, and today we have multiple types of strategies that help us fulfill our specific business objectives. So, majorly, the outsourcing strategies are divided into these different types.
- IT outsourcing – Every firm demands IT outsourcing these days, including infrastructure, software development, maintenance, and support. The primary purpose of doing so is to avail the best talent at the lowest prices.
- Multisourcing – This includes hiring IT services combined with essential business functions, which your existing team might not do.
- Professional outsourcing – Your company doesn’t have reliable app developers. Hence you choose to outsource the professionals who can fill in the gap and deploy quality professional services.
- Process-specific outsourcing – Choose to hire professionals or a team of experts specializing in a particular skill or service.
- Project outsourcing – Hiring a third party based on certain projects. For example, your existing team is unable to handle loads of tasks. Hence you outsource a new team to share the load.
- Manufacturer outsourcing – Collaborating with the manufacturer loaded with the necessary equipment to fulfill your product manufacturing needs.
What are the Steps to Successful IT Outsourcing Strategies?
Although there could be different reasons why your company is outsourcing, the structure to make it successful remains pretty much the same. Here are the steps to follow:
- Define your expectations to avoid any conflict or misunderstanding in the future. That includes your business values, goals, mission, and vision.
- Outsource, only when needed – Anyone can fall for the cost-cutting advantage of outsourcing the team. However, it is not always recommended to outsource a team even when you don’t need it.
- Invest in a Reliable Source – When outsourcing, you can’t just rely on anyone but the best for successful outcomes. Hence, invest time, money, and efforts in finding the most reliable one for your business.
- Progress Analysis – That’s an integral part of any business to track whether the hired team is leading you towards success and progress or not. Make sure you are getting what you have paid for.
IT outsourcing strategies need the ultimate cooperation of different departments and your team’s combined work and efforts to define the goals clearly, strategize the processes, and present a clear business plan.
Besides, if you need to figure out the best out of rest for your business, we recommend investing plenty of time analyzing your potential outsourcing team.
Another vital aspect to take into consideration is communication. No matter how major or minor the obstacles you face in business, everything can be resolved with clear communication. In addition, if you have all these things ready, there is nothing that can stop your team from being a success.