Nowadays, the majority of the software development companies and business IT departments have started relying more on technical staffing services providers to help them run their businesses. From small to big enterprises from countries like the US choose outsourcing and follow a roadmap to take the benefit of offshore software developers and testers from all around the world. This enables organizations to save a lot of money that goes behind hiring in-house engineering talent. Therefore, a proper understanding of different outsourcing models and ways to implement them when required is necessary for every organization. This also helps companies rein in their HR budgets and at the same time get access to skilled technical labor.
Every company must have the knowledge to lay out a detailed blueprint of how to approach an outsourcing company ahead of time and ensure that its day-to-day work is done smoothly just like staff augmentation integrates with development teams. To learn more about this and see how businesses follow a proper IT outsourcing strategy by understanding its types and goals to hire the right vendor that can easily manage the operational tasks of the company, let us go through this blog.
What is an IT Outsourcing Strategy?
Outsourcing is a simple method of finding and hiring a third-party software development service provider who can handle certain tasks that are beyond your in-house team’s capabilities or in some cases if the in-house team is busy with other business operations. This approach has become a huge concept in recent times as hiring offshore development teams benefits a lot in terms of bringing new trends into your business.
An outsourcing strategy is nothing but a plan that is built on the assessment and analysis of the functions that can be performed by the outsourcing team. This means that the hiring company defines the tasks that are difficult to perform or are time taking for its in-house service providers and then starts searching for the offshore outsourcing companies that have qualified staff and all the necessary tools to deal with the assigned task within a predefined time frame.
This is the process that the IT industry follows for making their strategies before signing outsourcing contracts.
Advantages of Effective Outsourcing Strategy
Some of the major advantages of outsourcing planning are –
1. No Investment in New Tech Tools
Outsourcing business leaders take complete responsibility for the technologies and infrastructure. And they have all the required tools for any type of operational task.
2. Skilled and Experienced Resources
The biggest advantage of the outsourcing engagement model is that it enables companies to save a lot of time that goes behind recruitment and training of the in-house experts. Outsourcing companies have highly qualified, educated, and experienced experts who can easily complete any type of project.
3. Cut Costs
By hiring an outsourcing team, any company cut a lot of costs. Especially the companies that are based in the USA or Western Europe. They hire teams or individual experts from Asian countries. The IT companies from Asian countries offer their services at a lower price in comparison with EU and the US companies.
4. Focus on the Task
When there is a particular team that is hired to only complete the required tasks, they only have to focus on the assigned tasks and because of this, the work can be done at a much faster rate. This is why businesses hire outsourcing services providers to take care of certain projects or tasks. The CEO and managers of the hiring company would be aware of the tasks’ status but as they won’t be required to perform any of the tasks, it gives them an opportunity to work on the other important business activities.
5. Add Up Efficiency
Outsourcing service providers offer great services that are dedicated to your company’s tasks. And this results in higher efficiency. This is why companies prefer to hire experienced teams who have the capabilities to deal with complex tasks and can provide their services without any hidden costs. Besides this, as outsourcing providers have a good understanding of the field, they can help in reaching business goals very efficiently.
Types of Business Process Outsourcing Strategy
With time, the number of outsourcing strategies has increased and grown into different types. And each of these strategies has specific purposes.
Three main types of outsourcing strategies
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Onshore – If you want to hire a third-party services provider in your own country, go onshore.
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Nearshore – If you wish to hire a company from the neighboring countries, go with nearshore.
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Offshore – If you want to hire experts from distant countries, offshore is your option.
Besides this, some other outsourcing strategies are
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IT Outsourcing
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Manufacturer Outsourcing
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Project Outsourcing
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Professional Outsourcing
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Multisourcing
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Process-Specific Outsourcing
Goals of Each Outsourcing Strategy
When businesses are analyzing and finding the outsourcing service provider, they should also analyze their business processes and highlight them for the external providers. Based on this, the businesses will be able to choose the right outsourcing team and even the team will be able to have an idea about the work. Besides, this will help in choosing the right type of outsourcing strategy. For example –
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IT Outsourcing: In today’s time, companies of any size and field have IT needs like software development, infrastructure, maintenance, or support. And to get these services at a cheaper rate, they go for a third-party IT service rather than building their own teams.
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Project Outsourcing: When any company has too many projects to handle and cannot complete them all, they hire project outsourcing teams and make them handle some of the projects.
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Professional Outsourcing: When any company lacks mobile app developers, it hires professionals who can fill in the gap and offer the best services.
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Manufacturer Outsourcing: If the company chooses to produce their own products, they hire a manufacturing outsourcing company that already has all the necessary expertise and equipment.
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Multisourcing: Businesses hire multisourcing teams when they want to have IT services experts in combination with other business functionalities.
Steps to Follow for Successful IT Outsourcing Strategies
As seen above, all the IT outsourcing strategies have their own goals but the structure of these strategies are almost the same. And if you are looking to create a successful strategy for your team, here are steps that you can follow –
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When choosing the outsourcing company, select it for the right reasons and never sign a contract with the company just because of its cost-driven strategy. You must always make sure that both outsourcing and your business strategies are perfectly aligned.
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After choosing the right firm, define what you expect from the team. Create a sound business case that specifies all the details about the business value of outsourcing and how the hired team supports your company’s objectives.
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Select the vendor that suits your requirements and can complete all the tasks. Besides this, make sure to involve the in-house team senior management in the process as their opinions are valued a lot.
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After the analysis and selection of the outsourcing company and starting the process, create an effective contract that reflects the goals of your company and clearly defines the company’s expectations of the outsourcing vendor.
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After the developing process starts, keep a track of the entire process and make sure that you are getting exactly what you asked for and what you are paying for. Besides this, one thing the company owner must keep is a report of the project’s progress and make the outsourcing and in-house staff keep transparency.
Conclusion
As seen in this blog, when any business decides to go with outsourcing, it is very important to understand the type of service your company wants from the IT outsourcing provider. The organization must also see to it that and how they will be working with your company to achieve your goals. All these things can be done with a proper IT strategy and this is what the senior management has to look for.