What started as a novel method to free oneself from IT responsibilities in the early 1990s has now grown to be a global phenomenon. Outsourcing has not only become an accepted business practice but has helped thousands of companies to access IT services that they otherwise would not have been able to.
In the last couple of decades, outsourcing as a business strategy has become formalized and it is quite difficult to find businesses that do not outsource one or most of their IT operations. Outsourcing helps companies to focus on their core competencies and spend less on IT infrastructure.
Naturally, we are beginning to see a wider acceptance and embracing of outsourcing methods, especially as we move towards cloud computing. In this article, let us take a look at why companies are motivated to outsource and how these factors help them in the long term.
1. Reduced cost
One of the main reasons for the popularity of outsourcing is the reduction of cost. Companies pay less for software services than what they would have had to pay if they had to start development from the scratch or if they had to invest in the entire infrastructure that is typically required to run such a service.
Moreover, outsourcing software and development projects means that companies do not hire IT developers full-time. Instead, the developers work for vendors and just complete the tasks. That leads to a vast reduction in costs.
2. Access to skilled and trained resources
When it comes to software development, it is very important to have access to trained and skilled developers. Most vendors hire the best developers around because that really is their business. A client whose business is to fix electrical goods may find it unnecessary to hire IT professionals.
By outsourcing his software development requirements, he will avoid the need to hire expensive developers and the possibility of running into inexperienced software professionals. Outsourcing agencies have all the experienced professionals that a client might ever need.
3. Reduced responsibilities
When a company outsources its IT requirements, it effectively washes its hands clean off responsibilities. This reduction in responsibilities is made possible because the outsourcing tams take up the additional burden and fix what is required: whether app development or software support. In turn, clients can concentrate on their core competencies and build their own skillets.
Managing an IT project is difficult and time consuming. If you do not know how to administer IT projects, the difficulty levels only increase. By outsourcing a project, one can reduce one’s responsibilities and hand them over to agencies that are specialized to do it.
4. Minimal investment in setting up IT infrastructure, software licenses or training courses
Companies which outsource their IT projects can avoid expenditure on IT infrastructure, software licenses and training. Software development can become a very expensive affair if you choose to buy all the software yourself.
When you outsource your projects to vendors, they will use their business software programs which they will have purchased themselves. Thus, you will avoid this additional expenditure. Also, you can reduce the amount of training that is required for your own employees, when you outsource those tasks to a third party.
As we can see from the factors listed above, companies are increasingly becoming aware of the benefits that outsourcing software projects comes with. Not only does outsourcing helps to reduce costs, but it also gives you access to superior talent and skilled resources. It reduces your responsibilities and tax burden.
Moreover, you will need to invest very little in actual IT infrastructure, software licenses and training. Depending on your requirements, you can choose to outsource either onshore or offshore. Talk to us at IT Exchange and we would be happy to clear any of your doubts around outsourcing.