Business Process Outsourcing (BPO) is a model that generally involves contracting certain aspects of Read more [...]
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Information Technology (IT) is one – if not the most – important support functions of any type of business.
Today, big companies consider IT as a critical component to make their business a success. However, startups and smaller to medium-sized businesses often fail to recognize the importance of IT for their business.
The one simple reason? It can be expensive to develop an IT department, much less maintain it.
This is where IT outsourcing bridges the gap and it’s growing a trend among businesses.
The future of IT outsourcing
Several studies have shown that IT outsourcing will become an integral part of every business. In 2015, market analysts released a worldwide forecast for the IT outsourcing sector stating almost six percent of compound annual growth.
The report identified that the main market drivers for outsourcing IT services is to enhance efficiency among business processes and give more focus on core competences to ensure business’ success.
Another market study also showed that companies outsource as much as 60 percent of their IT functions and will only grow in the years to come.
Google, for example, have long tried outsourcing with their non-essential IT functions, customer service, and software. As a tech giant, Google’s success is both immense and undeniable.
If a company as big as Google consider outsourcing as a factor to ensure their business success, then it’s even more important for startups and smaller enterprises to outsource some of their business functions, including IT.
Emerging trends in IT outsourcing
To help businesses move into the right direction, CIO listed down several trends that are now emerging in IT outsourcing. Some of these include:
- business-based metrics
- captive technology centers
- automation results
- cloud integration
- rapid software development
The many benefits of IT outsourcing
There are many reasons why businesses should consider outsourcing their IT functions, starting with these four:
For many businesses, startup or otherwise, cost is one of the major drivers of outsourcing. Since developing and keeping up an IT department can be way too expensive, outsourcing IT functions can help companies save costs on both capital and operational expenses as much as 40 percent, according to Information Week.
Increased focus on core business competencies
Most companies consider IT as a support function and not really a core competency. However, operational issues due to technology issues or bad software can be avoided by having an outsourced IT team who can offer their support and services 24/7. By outsourcing this one business process, companies can get more work done and focus on their core competency.
Increased flexibility with access to latest technology
Most business process outsourcing involved in IT are up-to-date with the latest IT technologies used in businesses and only hires and trains IT experts. By having IT experts who are updated with the latest technology, businesses find it easier to make the right technology decisions for the company.
BPOs providing IT services also provide the necessary support to deploy systems more effectively by offering companies a smoother and more flexible transition to any new platform for their business depending on when they want to scale up or down.
Reduced risk of data loss and downtime
If having the latest technology can be expensive, wrong technology decisions are even more costly and can be time consuming. As reported by CNN, there are more than 300 million pieces of malware created each year and companies risk cyber hacks, data loss or downtime if a breach occurs on their systems.
A BPO specializing in IT services can help reduce these risk by providing appropriate defenses such as encryption codes and firewalls to data centers and other forms of security standards to maintain the data security.
The risks involved to IT outsourcing
But while there are many benefits to IT outsourcing, there also risks involved that businesses should be aware of.
Since not all IT functions can be easily outsourced, BPOs providing IT services must be assesed for vendor qualifications to ensure that they have the expertise and capability to deliver their services. There’s also the matter of documentation and monitoring when a change in the system needs to be done.
Some companies also fear that they may lose internal control when outsourcing their IT functions. This can be avoided by having open communication between the outsource provider and choosing a qualified vendor that will ensure that the company’s IT needs are met and communicated properly.
When done properly, outsourcing IT services can help a business focus on its core competency and help it scale up and grow faster.