What Is IT Outsourcing company? Models, Types, Outsourcing IT Pros and Cons 2021

Today, hiring remote workers is a very popular option for businesses all over the world. This makes total sense from the point of view of saving money. Also, since the pandemic started, a lot of companies were forced to move their operations online anyway. So why pay more money to an average worker, if you can hire an excellent expert who happens to be far away?

You don’t even have to look for IT specialists by yourself. There are a lot of IT outsourcing companies on the market that can take over your whole operation and move it online. Any firm needs an efficient team that will oversee the information technology part of the business. Sometimes, the IT processes can even be a part of an effective marketing strategy!

The decision to dissolve a whole department in your office and hire remote workers might seem extreme at first. On the other hand, contracting IT outsourcing services can save your business in the future. This way, the only thing that you will manage is the end result and the effectiveness of your team in general.

What is an IT outsourcing company?

Let’s start from the beginning. Software outsourcing companies provide a very specific type of service. They have their own team of employees who can be hired from anywhere in the world. In a way, these firms, such as Develux Company, serve as third-party vendors who connect customers and workers. This way, a firm doesn’t have to assemble an in-house team.

Models for IT outsourcing

When discussing the practice of contracting out the employees, people don’t really think that there can be more than one kind. In reality, there are four main models that employers use. They can adjust these models to improve the efficiency of their working process and find something that suits everyone.

• Staff augmentation- This model is used by firms who already have an IT department, but it’s lacking some of the talents. For example, when you don’t have a front-end developer in your team, you can expand it by hiring someone to work offshore. In this case, the outside hire is employed for a long time.
• Dedicated team- This model is really similar to the project-based one. An employer looks for a whole information technology team that will work together for a long time. So basically, you contract out the whole department that will stand by to do an assignment that you give them.
• Project-based model- For this model, firms look for outsourcing companies that will be ready to complete whole projects for them. This way, the employer only gives out instructions and receives a completed project with full support from the team. The collaboration can be extended even further if the work is good!
• Development Center- This model is very tricky because it has some elements of outstaffing. The firms decide to open an IT department in another area, state, or even country. The employer still oversees all operations, pays for the equipment, and hires more workers when there is such need.

Types of IT outsourcing

Okay, don’t confuse this with models! There are several types of outstaffing practices that are commonly used by the best outsourcing companies. Each firm has to consider the benefits of these practices. Usually, the distance between the customer and the worker is the determining factor in choosing the type of out contracting. Also, the names pretty much explain themselves!

1. Onshoring- This is a type of practice where the outsourcing services companies and the customers are located within one region or country. For example, a firm in Florida can hire a development team from California. This option makes sense in terms of time zones and shared work culture. But it usually costs the most.
2. Nearshoring- This is a middle ground for clients who want to keep their development team close but still need to save some money. With nearshoring, you can look for tech outsourcing companies that are located in nearby countries. For example, in Europe, it’s very popular to hire IT experts from Eastern regions.
3. Offshoring- This is probably the cheapest and the most popular option. Firms hire their remote workers from overseas, usually from countries with totally different time zones and pay rates. For example, it is very common to hire customer support specialists from Asia. In this way, you can cover your IT needs 24 hours a day.

Advantages of IT outsourcing

There are some good points that were already discussed in this article. The main purpose of contracting out the staff is the price reduction. At the same time, this is also the biggest benefit! Today, organizations have to cut costs at every corner just to stay in business!
For the maximum benefit, outsourcing companies offer the best talent that they have. So, another advantage of this practice is that you receive an opportunity to reach talented workers from all over the world. This way, you aren’t restricted by your city. You can hire the best expert that your price range allows! Also, you can have access to better equipment and software.

One more advantage of this business practice is that your IT processes will be under control 24/7! Because of the time difference, the best specialists will oversee all procedures, such as client satisfaction, data backups, software updates, and other stuff. So basically, what companies are outsourcing is not only their expertise but also around-the-clock support.

Disadvantages of IT outsourcing

Not everything is perfect with hiring outside workers for your business. There are certainly some negative sides to this practice. A lot of firms are worried that they won’t find a good fit, or that their operations will not be secure. Also, usually, bosses need to have human contact with their workers. So here are some cons of outstaffing your IT department!

One of the biggest worries of the employers is that they are giving up control. Of course, you still have some power over the freelance staff, but you have to trust them to finish all your projects in time. For this reason, you have to find an effective IT team with a very good reputation and maybe recommendations from previous employers.

After looking at the bad outsourcing examples, companies are also cautious about giving up their personal data to third parties. There have been some examples of when freelancers breached security contracts. They revealed a lot of information that was supposed to be under the protection of a non-disclosure agreement. So, make sure to also have a good legal team!

Another disadvantage of an offshore IT department is that some things might be lost in translation. This is especially true for the workers from non-English speaking countries. Also, there might be some misunderstandings with the corporate cultures. For example, Scandinavian countries are famous for their short workdays and 4 days-a-week working schedule!

To sum up

So, as you can see, there are some positive and negative sides to hiring out contracted IT specialists. Business owners have to carefully consider all factors that might influence their productivity and profits in the long run. So make sure that you outline your professional goals! Also, companies should also ask for recommendations from previous employees to avoid scams.