EFFECTIVE USE OF TECHNOLOGY
In present years, it has become a prevalent practice to outsource IT services to outside firms. It has been said that the information technology outsourcing industry is currently in its evolution phase and what will continue driving it is the innovations in demand such as cost-effectiveness and technology.
Let’s take a look at some interesting statistics on IT outsourcing!
According to Statista, the global market size of outsourced services reached $85.6 billion in 2018. In 2017 65% of the companies that have outsourced had continued to do it in 2018. (Outsourcing Insight). About 54% of all companies use third-party support teams to connect with customers. Furthermore, about 84.2% of outsourcing deals originated from the USA, followed by the UK at 5.2%. Spain and Australia were two other key outsourcing markets. (KPMG, 2017). The Deloitte survey results confirm a significant increase in organizations using outsourcing to enhance M&A efforts — from 45 percent in 2016 to 67 percent in 2018. The top three benefits of IT outsourcing identified by Deloitte research in 2018 are to reduce the need for transition service agreements (34%), to accelerate the integration of the new organization (33%), and to lower operating costs of the acquired entity (31%). According to Beroe Inc, the IT Services Outsourcing Market revenue is expected to rise above $531 Billion by 2022.
Main countries that provide outsourcing services
- India
- China
- Malaysia
- Thailand
- Brazil
- Indonesia
- Bulgeria
- Philippines
- Chile and
- Japan
Main Outsourced IT Functions
Maintenance, development and support — This involves outsourcing the development of your new applications or enhancing the existing one for better performance.
IT security — Security-related services such as assessments, pen testing, managing secured services can be outsourced too.
Database administration — You can also have a dedicated outsourced team to monitor and maintain your database.
Helpdesk and Desktop support — You can also outsource your desktop support services such as installation, maintenance to outside firms.
Web hosting and operations — an outside service provider can help to host, operate, and maintain your website.
IT outsourcing trends
Some of the major trends in IT outsourcing today are:
- Automation through AI
- Focus on Cybersecurity
- Internet of Things (IoT)
- The rise of Augmented Reality and Virtual Reality Projects
Benefits of IT outsourcing
There are many benefits and advantages to outsourcing your IT services to an outside IT services provider.
Makes you focus on Core Activities – Outsourcing some essential but mundane tasks can allow you and your employees to focus on activities that bring profit to your business without sacrificing quality or service.
You maintain lower costs – Building an in-house team or buying equipment can be expensive; it is more cost-effective to outsource. When outsources, businesses can save a considerable amount in salaries, benefit costs, taxes and other overhead costs.
Risk Management – A situation where any of your important staff is on leave, and there is nobody in the company to take his or her place. Then you can easily outsource the role to reduce the risk, and the company can keep operating while the employee is unavailable.
Other benefits of IT outsourcing include:
- It promotes growth
- Consistent results
- Resources are rapidly scalable
- Outsource team do have the right people for the
Challenges of IT outsourcing
As outsourcing has many benefits, it also does have some challenges in the industry, below is an overview of some problems you might face when outsourcing your IT services.
- Expectations – When companies outsource services, they expect certain expectations in theory, sometimes these expectations do not come out as expected in practice. Companies need to accept the fact that there will be some learning curve and a few rough patches.
- Selecting the Right Service Provider – This might be one of the most significant challenges you will face, once there is a flaw in the selection phase, this might turn bad for both parties.
- Lack of Understanding of the Contract – It gets messy when one or both affected parties do not understand the legal implications of the contract. Many outsourcing companies, most times, overlook legal issues, and at the end of the day, they face outsourcing failures.
Outsourcing your IT services will guarantee you a reduced cost in operations related to information technology while improving the effectiveness and productivity of IT. You will have full access to talented people, a wide range of skills always for the lower cost of support.
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