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10 Tips for Maintaining IT Outsourcing Partnerships Effectively

IT outsourcing can offer many benefits, but it is important to choose the right company and manage partnerships effectively.

Truth be told, business process outsourcing (BPO) has become commonplace for corporations, including the information technology industry, who want to improve efficiency, cut costs, focus on their core competencies and leave the rest to experts. But while IT outsourcing can offer many benefits, choosing the right outsourcing company and managing your partnerships effectively to get the most out of them is essential. 

In this blog post, we will share the 10 tips for maintaining IT outsourcing partnerships effectively. But before that, we will also briefly go over the necessary details related to IT outsourcing.

Ready to dig in? Keep on reading!

What is Information Technology (IT) Outsourcing?

Information technology (IT) outsourcing is an organisational strategy of hiring external service providers to manage the IT-related processes of your company. 

IT functions include software development, infrastructure solutions, technical customer service support, and data analytics. Most businesses outsource these tasks to reduce costs, access better talent, and ease upscaling. 

Why is the IT industry well-suited to outsourcing?

  • Outsourcing can be a solution for corporations that want to lower overheads to concentrate on upgrades and develop technology strategies to implement growth. 
  • Where businesses would have to invest a significant amount of expenditure in hiring and onboarding additional staff or development and maintenance costs, outsourcing firms already have these operational expenses covered.
  • In 2021, Gartner projected that global tech spending would have a total of US$3.9 trillion, an increase of 6.2% from 2020. This forecasted spending does not consider the employment expenses to recruit employees in keeping up with the aforementioned market growth or the overheads with additional staff. 
  • Your company could save up to 70% on employment spending alone, especially with offshoring to the Philippines due to the lower living costs. 

What are the most frequently outsourced IT needs and services?

  • Software testing 
  • Custom software development 
  • Mobile and web development 
  • Web hosting 
  • Cloud computing 
  • Cybersecurity 
  • Internet of Things (IoT) 
  • UI and UX design 
  • Infrastructure management 
  • Application management and support 
  • Data Science 
  • Blockchain consulting
  • MVP (Minimum Viable Products) development
  • Maintenance and support 
  • Customer service or help desk 

5 Types of IT Outsourcing

Here’s an overview of the five various types of IT outsourcing services.

Offshore Outsourcing

This is when a company outsources its IT needs to a foreign country. The most common reason for this is to save on costs, as labour and other expenses are often cheaper in other countries. However, there can be drawbacks to offshore outsourcing, such as language barriers and cultural differences.

Nearshore Outsourcing

This is similar to offshore outsourcing, but the company outsources its IT needs to a neighbouring country. This can help reduce some drawbacks of offshore outsourcing, such as language barriers and cultural differences.

Onshore Outsourcing

This is when a company outsources its IT needs to another company within the same country. Onshore outsourcing can be more expensive than offshore or nearshore outsourcing, but it can also provide benefits such as shorter communication lines and a better understanding of business processes.

Cloud Computing-Based Outsourcing

This is when you purchase IT-related services online. It involves Software-as-a-Service, Infrastructure-as-a-Service and Platform-as-a-Service models.

Here’s a quick look at each of these cloud computing services:

  • Software-as-a-Service: These services cover hosting an online application and making it available to clients.
  • Infrastructure-as-a-Service: These are services that offer virtualized computing resources over the internet.
  • Platform-as-a-Service: These services provide consumers with a digital platform to operate, develop and manage things without building and sustaining the infrastructure themselves.

Managed Service Outsourcing

This refers to generating an outsourcing contract with an external; managed service provider (MSP) for network management functions. The managed IT BPO form renders facilities like virtual private networks (VPNs) and firewalls.

Critical Challenges in the Information Technology Industry

The IT industry is constantly evolving and changing, which can present challenges for businesses that need to keep pace with the current trends and technologies. Here are some of the critical challenges faced by IT businesses:

Keeping up with the latest technology

The IT industry is one of the most rapidly evolving industries in the world. New technologies and trends emerge all the time, and businesses need to be able to keep up to stay competitive. This can be a challenge, particularly for small businesses with limited resources.

Security

With the increasing use of technology, businesses are also at risk of cyber-attacks and data breaches. Therefore, companies must invest in security measures to protect their systems and data from malicious attacks.

Talent shortages

A global shortage of IT talent makes it difficult for businesses to find the skilled workers they need. This is particularly true for companies in developing countries that often lack qualified IT professionals.

Cost

The cost of setting up and maintaining an IT infrastructure can be high, particularly for small businesses. This is often a barrier to entry for small businesses that may need more money to invest in IT.

Complexity

Technology can sometimes make things more complex rather than simpler. This can be a challenge for businesses that must keep track of multiple systems and processes to ensure everything runs smoothly.

When should you consider IT outsourcing?

In the modern world, customers today have come to expect smooth, flawless and hassle-free IT services. Fortunately, Information technology BPO companies can render these top-notch services to your company. However, if your in-house resources are limited, you might get backed up or run the risk of delivering inadequate IT services to your clients. So here’s a compilation of the most frequent reasons to outsource IT services and operations to help you consider when offshoring might be right for your company. 

You need cybersecurity

For an internal IT team, there is a limit to the level of cybersecurity for your organisation that the employees have experience using. Outsourced IT solutions provide your business with cybersecurity experts who offer faster detection and more robust protection against emerging security threats. To obtain access to boosted knowledge and better resources for defending your business against security risks, outsource your IT department.

You want to be cost-efficient

When businesses try to set up an internal IT staff, they can spend thousands of dollars on employment expenses, equipment and training. Outsourcing your IT services eliminates the cost of recruiting and sustaining an in-house team. Remote IT companies can render the same — and often better — services than an in-house department at a minimised price. In addition, when you contract out technical support, you can put more effort and money into other tasks to run your business.

Your internal resources are maxed out

When internal teams plan to juggle IT services with limited knowledge on top of their day-to-day responsibilities, it’s no surprise they can quickly become burnt out. If you see your team reaching their maximum capacity, you may want to outsource some projects to give your staff more time to concentrate on key business goals. Everyone has their limits, so find and evaluate what your organisation can manage and where it would be more effective to offshore.

You’re handling a complex project

Several moving parts require specific technical knowledge and skills when working on a complicated project. Outsourced IT specialists are experienced and have likely already managed similar complex projects so they can provide you with valuable advice and assistance. Keep the parts of the project your team can confidently finish, and then delegate the functions that need a little more expertise. Doing so will boost your team’s efficiency and limit in-house downtime. 

You need a higher level of talent

Your in-house staff can’t know everything, and that’s okay. The training necessary to keep internal IT departments on top of their game can be costly and time-consuming. When a project requires a higher level of expertise, consider the help of an outsourced talent. Collaborating with a remote IT company can render you the skills you need to complete a project and make it stand out above the competition.

You have tight deadlines to handle

If you need to catch up because of upcoming deadlines, you could turn to outsourcing parts of the project. You don’t need to contract out the whole thing, but getting assistance on one or two aspects that need more time than you have will make it possible for you to meet deadlines. Outsourcing part of a project can provide you and your team time to focus on the components of the project where your team excels. If you find outsourcing helpful, you can continue utilising it in the future to concentrate on your core strengths long-term.

10 Tips for Maintaining IT Outsourcing Partnerships Effectively

#1 Define the Scope of the Partnership Early On

One of the first significant things you need to do when setting up an outsourcing partnership is to define the scope of the partnership. What exactly are you looking to outsource? What are your expectations for the BPO service provider you’re outsourcing to? By clearly understanding what you want from the relationship, you’ll be in a better position to choose the right partner, and it will be easier to set goals and measure success.

#2 Set Clear Goals and Expectations

Before work begins, you must set clear goals and expectations for the outsourcing partnership. What are your objectives? What metrics will you use to measure success? By having a shared understanding of what they need to accomplish, both parties can be sure they’re working towards the same thing.

#3 Do Your Homework on Potential Partners

Not all IT BPO companies are created equal. Therefore, it’s imperative to do your homework and select a provider with a track record of delivering quality services that meet your needs. Request references from companies like yours and ask probing questions about the provider’s experience and capabilities.

#4 Be Involved in the Selection Process

If you’re outsourcing IT functions, you must be involved in the selection process for the provider. After all, you’ll work closely with them and must be confident in their abilities. So make sure to ask plenty of questions and get a feel for their experience level. Don’t just hand over the reins and hope for the best!

#5 Put together a Detailed RFP

Once you’ve identified a few potential providers, the next step is to issue a request for proposal (RFP). This document should be as detailed as possible, outlining your specific requirements and objectives. The more information you can render upfront, the better-positioned providers will be to submit proposals that meet your needs.

#6 Negotiate the Terms of Your Agreement Carefully

Once you’ve selected a BPO provider, it’s time to start negotiations. This is where having a clear understanding of your objectives and requirements will really pay off. Be sure to negotiate favourable terms for your company, including pricing, service levels, contract length and termination provisions.

#7 Determine measurable KPIs and SLAs

Determine measurable performance indicators (KPIs) and service-level agreements (SLAs) upfront so that everyone is clear on what constitutes success – and how they will address any problems. Likewise, regularly review progress against KPIs and SLAs, and address any issues that arise promptly and constructively.

#8 Manage the Transition Carefully

Outsourcing IT can be a complex undertaking, so it’s crucial to manage the transition carefully. Work closely with your chosen provider to ensure a smooth transition, and communicate regularly with your team throughout the process.

#9 Monitor the Partnership Closely

Even after everything is up and running, it’s essential to stay involved in the management of the partnership. This includes regularly reviewing performance, monitoring milestones, and addressing any issues that may come up. You can help ensure a successful outsourcing experience by staying on top of things.

#10 Communicate Regularly

Effective communication is essential to maintain productivity in any partnership, but it’s indispensable when working with an outsourced IT provider. Make sure to schedule regular check-ins so you can stay up-to-date on their work and provide feedback. In addition, build a trusting relationship with your IT outsourcing partner based on mutual respect and understanding.  

Conclusion

Companies who outsource IT services will find that they have more time and energy to focus on their core business.

The benefits of outsourcing IT services are many and varied, but maintaining an effective outsourcing partnership requires careful management. By following these steps, you can be confident that you’ll find the right IT outsourcing partner for your business. Thank you for reading! 

If you’re ready to outsource your IT services to boost your company’s money, time, and resources, explore your options with us at The Lead Enquiry. Our service provider partners are eager to hear about your IT needs and will share how they can tailor their services to render you the best solutions. Contact us today. 

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