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5 Motives For Technology Outsourcing
Information technology makes up an important area of most companies’ operations, irrespective of what industry they are in. It is also an area that is becoming increasingly outsourced. This essentially means that a growing number of businesses are obtaining IT services by contract from an outside supplier, rather than handling it themselves. This post assesses the motives for doing so by realising the strategy behind technology outsourcing. So, keep on reading to find out more…
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MOTIVE #1 – REDUCE BUSINESS EXPENDITURE
In general, the main reason why businesses outsource technology is for the purpose of lowering business expenditure. If you were to staff an IT department, you would have to pay for training, as well as salaries. It becomes much more cost effective to seek such services from an outside provider instead because you essentially turn fixed costs into variable costs, meaning you are able to budget effectively. This is because you only pay for what you need, rather than paying a person on a consistent basis. The best thing to do when it comes to the financial side of things is to work out the costs for both options over the course of a year. This will give a true picture, as outsourcing costs can often be more to begin with but cheaper over time.
MOTIVE #2 – BETTER WORK QUALITY
Another motive for outsourcing technology is to benefit from a better quality of work. Finding employees for your IT department can be a challenge. Not only is it an added inconvenience, but it is difficult to determine whether someone is worthy of the vacant role if you are not IT certified yourself. In addition to this, you gain access to a wider array of skills through outsourcing and, therefore, you can hire in relation to the service you need. For example, if you require software development, you will outsource from an experienced developer. This ensures that you are getting the best person for the job each and every time.
MOTIVE #3 – BENEFIT FROM SKILLS AND TECHNOLOGY YOU DON’T HAVE IN-HOUSE
You may also need to outsource because it is something that simply cannot be provided in-house. This is the case when it comes to the likes of online payment merchants. Do you really have all of the skills and technology to ensure payments are processed legally, effectively, and securely? This is a specialist service whereby outsourcing seems to be the only option. In this sense, outsourcing can also be an effective way to reduce your data breach risk. Nevertheless, do not take this for granted and merely assume that high levels of security are in place. You need to do your research about the company to be certain that this is the case. This is something we will discuss later on in the blog post.
MOTIVE #4 – REDUCE TIME TO MARKET FOR INCREASED COMPETITIVENESS
You will also be able to quickly implement new technology and increase efficiency and competitiveness. A quality outsourced IT organisation will have the resources to start new projects imminently, whereas you may need weeks or even months to acquire the right people and provide them with the support they need. The higher research, development, and implementation time associated with going down the in-house route results in inefficiency. This leads to increased costs which will be passed on to the consumer and thus reduce your competitiveness.
MOTIVE #5 – IMPROVED SECURITY AND COMPLIANCE
Finally, outsourcing technology is beneficial because you benefit from improved compliance and security. The provider will ensure your company has implemented PCI security standards and maintains them. They will also make certain your firewalls are up to date and they will audit your workstations and servers. You can be certain that your company is taking all of the steps necessary so that there are no risks pertaining to sensitive competitive information, client data, credit card numbers and such like.
All in all, it is quite clear to see why so many companies opt to outsource information technology services nowadays. The primary reason is often to improve budget control. Nonetheless, the benefits are a lot more widespread than this. It is likely that you will benefit from a higher level of quality service, as you can take advantage of specialist skills and a wider array of talent. Moreover, you will increase efficiency and improve your company’s competitive edge by being able to enter the market immediately.