Want to know more about outsourcing? What are the benefits and risks of outsourcing IT services? Though outsourcing is a common practice of contracting out some business processes, some employers are still not sure whether this solution is right for their business. There are lots of things to consider before you send some business tasks to third-party providers. However, have you ever found yourself in a situation when you needed to do some task urgently but didn’t have a specialist in your team able to tackle that challenge? In this case, outsourcing is the only solution for you.
In this insightful review, we’ll have a look at the key outsourcing benefits and risks. First, we’ll cover the basics and explain what outsourcing means. After that, we’ll move on to discussing its pros and cons. This expert review will help you make the final decision.
What is outsourcing?
This term refers to the transfer of some business activities to a third-party provider. For example, there’s no developer in your team. However, you need to create a mobile application for your product. In this case, you can hire a third-party service provider. Simply put, you’ll find experts who will tackle that challenge for you.
Have a look at the most commonly outsourced activities:
- IT services;
- Human resources services;
- Procurement services;
- Online marketing;
- Call center services;
- Accounting services.
Senior levels of corporate management need to decide what kind of tasks can be outsourced. Now let’s move on to discussing the main benefits of offshore outsourcing.
The key advantages of outsourcing
Want to know more about offshore outsourcing benefits? Let’s explore the main advantages of offshore outsourcing. According to statistical data, business process outsourcing generated 23.6 billion dollars in 2018.
What makes this type of business so special? Why do business owners prefer using the services of offshore companies? Let’s have a look at the main pros and cons of outsourcing in greater detail.
Companies will have more time to focus on the main business activities
When you transfer tasks to offshore companies, you free up your own time. As a result, your employees will have more spare time to concentrate on more critical tasks. There are some routine assignments that require your time and effort. Outsourcing them will allow you to focus on the development of your future strategy.
Today, more companies tend to outsource to digital assistants. Statistical data shows that such tasks as writing emails, repetitive paperwork, or HR management can be outsourced to digital assistants easily.
Outsourcing is economically sound
Sometimes, special skills are required to complete a task. Furthermore, it is not economically sound to invest time, money and effort in the development of these skills within your company. Therefore, it is wiser to outsource this task to more proficient specialists.
When it comes to determining the outcome of a certain campaign, you should also think about risk analysis. If you deal with a trusted outsourced company, which has a few years of experience under their belt, they will easily plan risk-mitigating factors. Furthermore, they’ll do it better than you.
Outsourcing some functions will result in better output and considerably lower costs. As a result, the work of your team will be more effective!
You’ll save on technological expenses
You probably understand that technology requires investments. For instance, you may need to buy equipment and software and later invest in its maintenance and updates. If it is not profitable for your company, it will be more productive to consider outsourcing.
For instance, when it comes to analyzing outsourcing web development benefits and risks, it is more profitable to find a professional IT company and entrust any tasks related to web development to specialists. As a result, you won’t need to buy software, computers, or other equipment to do this task by yourself. Our company has a few years of experience in the area of IT outsourcing. So we guarantee that we will find a dedicated team able to face those challenges for you!
Let's discuss which IT outsourcing trends will change the industry.
What are the main risks of outsourcing?
Though outsourcing has a variety of advantages, there are some risks you need to be aware of. So what are the main outsourcing risks, and what can you do to mitigate them?
- Information leaks. When you outsource a business process, there are always risks that some data can be leaked. To avoid this problem, you need to make sure that you are dealing with a professional company that values its reputation.
- Lower employee loyalty. You don’t know who will be responsible for this or that task. You aren’t sure whether the HR department assigns employees whose skills are relevant to the task. There’s only one solution to this problem: you should find a third-party company you can trust to.
- Hidden costs. Outsourcing is cost-effective. It is cheaper than having all staff based locally, but some hidden costs also may appear. To avoid this problem, you need to sign a contract where all the details of your cooperation with the offshore company will be indicated.
- Problems with quality. If you have never dealt with this particular company, you can’t be sure that they can complete the task in a proper way. So you should monitor every step of outsourced functions to ensure the quality.
- Incorrect knowledge transfer. It is the main offshore outsourcing risk, which can drastically influence the success of the future outsourcing relationship. You should make sure that you provide the outsourcing company with all the requirements for your future project. It is more effective to opt for outsourcers that use professional software tools to manage business processes. As a result, you can rest assured that the knowledge transfer will be accurate.
However, risks are not the same as disadvantages. If handled properly, you can avoid all the risks related to outsourcing IT services.
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