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What are the Benefits of Outsourcing IT Services instead of Hiring an In-House Team

By the end of 2023, the outsourcing industry is projected to reach USD 731 billion, and IT outsourcing should be over USD 1.3 trillion by 2023. This industry has slowly changed workforce dynamics and is being sped up by technological innovations and advancement. The glamor of the outsourcing industry speaks to its effectiveness, and this article gives you a rundown of the benefits of outsourcing and the ways it outweighs hiring an in-house team.

benefits of outsourcing and the ways it outweighs hiring an in-house team

What is Involved in Outsourcing IT Service

IT services outsourcing involves contracting with external providers or employees who handle IT operations. In IT services, outsourced skills use infrastructure management, software development, technical support, or data operations. The external partner is responsible for delivering on the said skills in IT outsourcing. This field has recently gained rapid recognition due to cost efficiency, scalability, and increasing technological advancement.

What is an In-house Team

An in-house team is the exact opposite of an outsourced one. It is the traditional way of contracting labor. The company employs staff who directly answer it and often report to its physical premises - with a few exceptions. These employees are considered a part of the company's internal affairs and now reflect its image and reputation. Due to the nature of an average IT team, members may not report physically to the company, but they are considered to be directly under the firm's management. They are more permanent than outsourced teams, and the company is liable for the actions of an in-house team.

What are the Benefits of Outsourcing IT Services Over Hiring an In-house Team

You Save Costs and Time

The first thing that comes to mind when considering the benefits of outsourcing teams over in-house teams is the minimized cost and resources. Outsourcing is primarily a cost-cutting strategy. It intrinsically involves bringing in third-party service providers to perform tasks for a period, after which both parties go their separate ways where services are not immediately needed. However, hiring an in-house team does not offer this privilege. Employees can access wages and bonuses for an extended period regardless of the work done.

Access to Higher Professional Skill

Indeed, outsourcing is a beautiful strategy. It allows a company access to an endless pool of professionals without the stress of conducting hiring procedures and processes. Moreover, almost all the outsourced partners have significant experience in the project. This trait means the company needs to spend more on training, purchasing resources, and maintaining the team and, in that way, maximizing profits with reduced costs and excellent professional services. 

Feasibility and Scalability

Involving an outsourcing partner is one of the fastest ways to scale up your project. About 54% of companies use outsourcing partners to contact customers and determine market trends or consumer needs. Unlike four years ago, over 44% of Chief Intelligence Officers (CIOs) are more inclined to source the help of outsourcing specialists. More and more stakeholders worldwide are embracing the tool of outsourcing to execute projects successfully due to its widely acknowledged feasibility.

Risk Management

Hiring an in-house team involves significant risks, including vicarious liability. An employer is potentially liable for the actions of its employees in the course of performing their duty. This system differs from outsourcing teams as they are considered partners, not direct company employees. Also, outsourcing teams have ample experience dealing with risk, and many have risk management procedures for such risks, so there is little or no risk transfer on the contracting company or partner.

Seamless Transitions

Outsourcing teams are not to be permanent. This attribute wraps up the benefit of outsourcing. The teams often establish a system for a seamless transition and exit at the end of the project. This transition will include the eradication of data and company information where required and the revocation of access. That way, the company can spend less resources on restructuring and transition.

Multiplicity of Functions

An average company will require establishing departments and teams to carry out the day-to-day functions. Sometimes, the unit can comprise members who carry out similar tasks, which may need to be revised. However, the minimalist nature of outsourcing makes it such that only strictly needed employees are employed. There is no room for duplication of duties. Sometimes, a company can outsource directly to another company specializing in outsourcing contracts. The latter will take care of all issues involving human capital, leaving the company with fewer issues and burdens.

Live Deadlines

If there is anything outsourcing is known for, it is strictly adhering to deadlines and getting the work done efficiently. Many of these companies depend on referrals and reviews from clients. As such, they are always on the top of their game in getting good work done promptly. Moreover, outsourcing development teams can pivot to suit live deadlines where previous ones change quickly. They also calculate the project deadlines appropriately, barring all contingencies and emergencies.

This article does not paint outsourcing as the solution to every company's professional and human capital issues. However, it certainly has many benefits over the traditional in-house system. These benefits help a company to realize project objectives with little expenses and resources. For more information on outsourcing IT services, kindly consult our other articles.

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