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IT Outsourcing From A To Z: Everything You Need To Know in 2022

Author: Innotech Vietnam
Date: 27/04/2022

For decades, the term “IT outsourcing” has been a hot topic, and it continues to gain attraction. Those who have heard it a thousand times may find it irritating, while there are still people who are unsure about whether it is the best option for them. 

According to a research by Deloitte Access Economics and The Australian Computer Society, the need for IT professionals will expand by over 100,000 jobs between 2018 and 2023. This shows the challenge for businesses investing in local IT support to find talented people. 

The modern world is changing so quickly that businesses are seeking for ways to shift digitally. In this setting, IT outsourcing companies stand out for their capacity to give companies a competitive edge. 

 

1. What is IT Outsourcing? 

 

Due to the definition of Gartner, IT outsourcing is the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes. 

Outsourcing, which also includes utility services, software as a service and cloud-enabled outsourcing, helps clients to develop the right sourcing strategies and vision, select the right IT outsourcing service providers, structure the best possible contracts, and govern deals for sustainable win-win relationships with external providers. 

Outsourcing enables enterprises to reduce costs, accelerate time to market, and take advantage of external expertise, assets and or intellectual property. 

 

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To summarize, IT outsourcing involves a corporation handing some hardware or software support tasks to a team outside of their own company, with outsourcing countries like Vietnam leading the way.  

Businesses of all sizes, from start-ups to multinationals, can now get the 24/7 technical help they need at a price that is far lower than what they might pay locally. 

 

2. What are the types of IT Outsourcing?

 

2.1. Offshore IT Outsourcing   

It is called “offshoring outsourcing” when a third-party provider with its headquarters in another country is routinely hired or contracted to take advantage of lower costs.  

By connecting market products with a company’s capabilities and technological advantages, offshoring provides cutting-edge industry solutions. 

About the meaning of the term “offshore outsourcing,” off means “far away” and shore implies “country.” Mix them up,  offshore IT outsourcing is a procedure in which your demands are outsourced to third-party companies situated in a different continent, country, or area of the world. Businesses who outsource their work to offshore locations have instant access to the world’s talent and expertise. 

In terms of offshore IT outsourcing, the most significant factors are the cost and accessibility to global pool of qualified talents.  

Because of issues regarding trust and stability, outsourcing is not a favoured option. Offshoring guarantees that the business reaps all of the benefits, regardless of its remote location. 

 

2.2. Nearshore IT Outsourcing  

Trade across countries is becoming increasingly popular as businesses get access to cutting-edge knowledge and technology. A nearshore outsourcing site, often known as a nearshore outsourcing model, is the closest place or neighboring country.  

Nearshore outsourcing is popular due to lower costs and the high portion of developers that speak the same language as the company’s employees. They can also come to the workplace anytime they like.  

The downside is that corporations will join the country since it is physically close and would cost less to visit there. For instances, if your company is based in the United States, the nearshore IT outsourcing locations are Canada and Mexico. 

 

2.3. Onshore IT Outsourcing 

A team of professionals and specialists is sent to the client’s location by the outsourced service provider for on-site outsourcing. When it comes to this form of outsourcing, the number of workers is on the rise.  

In onshoring IT outsourcing, having outsourced workers in the same nation and in the same time zone cuts the expenses more than in other outsourcing methods. The main difference is that they choose local outsourcing and national companies. 

In this kind of Outsourcing, operations are limited in a single location, with a small number of companies and a small pool of available talents. 

 

3. Why Should You Choose IT Outsourcing?

 

There are several benefits to outsource software development to external vendors. IT outsourcing can come in many forms, but there are key advantages that apply to all of them. Let’s have a look at them one by one: 

 

3.1. Adaptability 

From the wide variety of outsourcing models, this kind of software development allows for a great level of flexibility. You don’t have to make a long-term commitment to a full-time employee if you outsource your projects to experts. Your resources will be more adaptable, and you’ll be able to swap out team members as necessary to meet the demands of your project at any given time. 

 

3.2. Cost-cutting 

You will save a lot of money by implementing IT outsourcing. Mostly because you’ll save money by not employing people on-site. You may save a lot of money on infrastructure, staffing costs, as well as software and tools. In addition, IT outsourcing services offer a degree of skilled technical professionals on demand. This means that you may save money when it comes to recruiting and onboarding. 

 

3.3. Having access to global pool of talents 

If we’re talking about recruiting people, it might be difficult to track down specific employees in your local area. Especially in the software development sector, finding the perfect employee with the relevant knowledge and experience might take several months. The suppliers’ duty is to locate specialized experts that match your requirements. So, if there are no experts in your area, they may find them elsewhere, as long as they’re available. 

 

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3.4. Improved Internal Resource Management 

Another significant benefit of IT outsourcing is that outsourcing part of the work to outsourcing company frees up your in-house staff to concentrate on their own duties. Operations and employees management are particularly critical to the success of your firm. Outsourcing part of your company’s tasks is a strategic choice in this situation. 

 

3.5. Speed-Up Business Operations 

Software development and information technology are the most commonly outsourced tasks. Your firm will benefit considerably if you outsource these processes to a third party. They have greater experience, a more robust infrastructure, and a proven management strategy. They can enter your company, alter its operations, reduce costs, and free up your internal team from several tasks. 

 

3.6. Identify and Share the Risks 

Your partner will often share the project’s risks and responsibilities with you, especially when it comes to IT outsourcing. Delivering a product that consumers and clients enjoy is essential to both your external supplier and your internal staff. You and your in-house staff will be able to focus more on producing a high-quality product for your customers. 

 

3.7. Streamlined Growth 

Last but not least, working with an outside IT outsourcing company gives you the ability to rapidly grow your firm.  Outsourcing allows you to control your infrastructure and make adjustments fast to adapt to market and industry developments. It will make running your business and keeping up with the competition a lot easier. You’ll be able to operate more independently and efficiently when you have more control over your infrastructure. 

 

4. How many IT Outsourcing Models?

 

When you decide to outsource, there will be countless models for you to choose. The type of IT outsourcing model you pick will depend on your situation. In general, these will be divided into three groups: When you decide to outsource, there will be countless models for you to choose from. The type of IT outsourcing model you pick will depend on your situation. In general, these will be divided into three groups: 

  

4.1 Complete Process Outsourcing 

All of the related responsibilities and risks are taken on by a vendor, including team organization and management. From business analysis to solution support, the outsourcing company took care of every aspect of implementation so they could see how this outsourcing model actually works. This is a good option if you don’t know how to code or need a particular piece of software produced, or if you’re already overworked. 

Request regular reporting and appoint a representative to keep in touch with a provider. Innotech, for example, provides daily contact on-demand and weekly status calls under this outsourcing model. 

  

4.2. Dedicated IT outsourcing team  

When an outsourced part of a project is shared between an in-house team and a separate vendor, both parties are responsible for ensuring the project’s quality. The client’s PM (or product manager) receives regular updates from the company’s team’s PM (or leader). Clients who choose for this approach already have a development team and processes in place, but they are short on funding and subject expertise. 

Look for a vendor that can handle the connection and setup of all the essential resources for your project. 

 

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4.3. Additions to the workforce  

If you have a well-established but slow-moving development process or a lack of certain talent, you can hire remote professionals from an IT outsourcing company and manage them yourself.  It doesn’t matter how many resources you need if you don’t need a full team of developers. 

 

Related Articles: HOW MANY TYPES OF SOFTWARE OUTSOURCING CONTRACT ARE THERE? 

 

5. IT Roles That Can Be Outsourced

 

An IT outsourcing team’s ability to assist with a wide variety of tasks is limitless. Outsourcing firms have access to massive IT talent pools that are not only highly skilled but also dedicated, whether in troubleshooting, diagnosing, or detecting faults with code. 

The days of outsourcing being limited to call centers and back-office functions are long gone, as businesses have begun to recognize the outstanding talent available in offshore locations and the easiness of modern technology and communication tools make it possible to cooperate effectively. 

 

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5.1. Desktop Support Specialists to keep company computer systems running smoothly. Experts in computer software integration are the first point of contact for any computer and system-related difficulties.  

They assist handle technical issues surrounding software infrastructure and customer support. It’s ideal for companies to use desktop support professionals to do repetitive, rule-based, and detail-oriented work, freeing up their in-house staff to work on more strategic projects. 

 

5.2. IT Helpdesk Specialists play a critical role in providing technical assistance to customers or clients who are having problems with hardware, software, or applications.  

They take the lead in troubleshooting by addressing inquiries, analyzing difficulties, and implementing solutions.  

Additionally, they are responsible for teaching others how to use new systems, setting up peripherals, and performing general computer repairs and maintenance. 

 

5.3.Quality Assurance (QA) testers are the ‘proofreaders’ of a company’s consumer goods and services. Their job is to verify new or current software or services are ready for customers. They will have to conduct numerous tests to ensure that the product meets the standards before being promoted to customers. 

 

5.4. Systems Administrators ensure that computer systems are up-to-date, appropriately configured, and trustworthy for users.  

They oversee the installation and operation of networks, such as desktop computers, wireless networks, and server systems, with specializations in the administration of servers, networks, databases, and security systems.  

In order to maintain a well-functioning IT outsourcing infrastructure, an effective systems administrator must be taken into account. 

 

5.5. Technical Support Specialists are experts in translating technical language into communication language for their clients.  

Experienced in troubleshooting, they provide technical help and assistance for a wide range of difficulties, including connectivity issues and unresponsive programs.  

Additionally, they are patient communicators who consistently take clients through the introduction of new products and handlie their complaints. 

 

6. How Much Will IT Outsourcing Cost You?

 

There is a wide range in pricing based on where you live. IT outsourcing hourly prices may be compared using the average price in the US, which is between $100 and $150. Let’s take a look at the top three outsourcing locations. 

  

6.1. IT Outsourcing in Eastern Europe 

Developers from this area are in high demand because of their reputation for technical mastery and in-depth knowledge. In Eastern Europe, the hourly rate for software development is between $35 to 45, according to several sources. The sector can be divided into two branches: Ukraine, Belarus, and Russia and Poland (Eastern), Hungary, Bulgaria, Romania, and the Balkan countries (Western). 

  

6.2. IT Outsourcing in Central, Western and Northern Europe 

Over the years, European coders have built an image for themselves. Even so, because of the great demand for developers and the high cost of living (in comparison to Eastern Europe or Asia), the average software development hourly fee for IT outsourcing services is close to $50-$60 per hour.  

  

6.3. IT Outsourcing in Asia 

In several Asian nations, particularly Vietnam, IT outsourcing has had a significant impact on the economy.  The average pricing in this area is $25-$30, which is the cheapest on the list. 

 

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See more: TOP 10 BEST COUNTRIES FOR 2022 OFFSHORE SOFTWARE DEVELOPMENT  

 

7. How to Find a Reliable IT Outsourcing Company

 

There are a few key factors to take into consideration while searching for an outsourcing IT services. 

 

7.1. Communication 

This is an important factor in any business’s success and should not be ignored while outsourcing. You’ll need to be able to reach your IT support provider at all hours because not all problems occur between the hours of 9 a.m. to 5 p.m. 

  

7.2. Competency 

Is this IT outsourcing provider capable of dealing with the workload you want them to? Before deciding to outsource your IT functions to them, you must answer this question. There is a comprehensive list of the services we can provide for you on our website. 

  

7.3. Budget 

You need to be sure that this firm offers the services you need at a price you can afford. To check if outsourcing your IT services would save you money versus employing an in-house IT team, you need to keep track of how much you’ll be spending. Make sure you know where your money is going and why you need those services. 

  

7.4. Research 

Use the company’s website as a starting point to find answers to your queries. To find out more about the organization, give them a call. The more information you have about a company, the more prepared you will be to decide whether or not to deal with them. 

 

7.5. Knowledge 

If outsourcing is new to you, you will certainly experience some problems at first, which is why selecting a trustworthy firm is critical. A dependable outsourcing vendor is one that has a long track record of successful projects, glowing customer testimonials, and a dedicated team of experts ready to help you at every step of the way. 

 

it outsourcing software development services

 

With 14+ years of experience, 200+ projects done, and a team full of talented individuals, Innotech Vietnam can be a reliable partner if you are looking for an IT Outsourcing company. 

There is a lot of information about the clients Innotech now serve on our website. We attempt to provide you with the sense of security you need to enjoy enhancing your business with us. 

Contact our team of experts if you have any queries or concerns about outsourcing and we’ll be more than pleased to assist you. 

  

Mail: [email protected] 

 

Bottom Lines 

 

To outsource some of your tasks, you’ll need a lot of careful consideration. Several factors influence the decision to employ IT outsourcing, but the most crucial one to consider is whether or not it will help your company. 

Consider your market, your customers, your in-house team and infrastructure before deciding.  Before choosing to outsource, assess your current capabilities.  

Determining which operations may be outsourced and which should be kept in-house should be your first step before signing an IT outsourcing contract.