The labor market for IT professionals is more competitive than ever. To entice new employees and retain existing employees, companies are offering flexible work options and a variety of other employment benefits. Although this works for large businesses, the majority of small to mid-sized businesses simply cannot afford this. In fact, the median salary for IT professionals is $97,000. This cost doesn’t include recruiting, interviewing, onboarding, etc. This high cost of hiring IT personnel has led companies to investigate outsourcing options that are more cost-effective for their business.

What is IT outsourcing?

IT outsourcing refers to the practice of delegating IT operations or projects to a third party. When a company outsources their IT work, they can choose to outsource some or all of their operations to a provider. Examples of some of the work that a company may outsource to third parties include IT support, server management, backup & recovery and more.

When companies outsource their IT operations, they either work with nearshore or offshore companies. Nearshore refers to companies located near a company’s headquarters, while offshore refers to companies located very far from the company (typically 10+ hour time difference). These are the IT outsourcing options that most people choose because they are far more affordable than using in-house IT staff.

IT outsourcing for software development_nearshore IT_yuxi global

Benefits of IT outsourcing:

Cost savings: The most apparent benefit of IT outsourcing is cost savings. IT outsourcing costs a fraction of hiring just one in-house IT staff member. Companies receive far more benefits at a much lower cost when they choose to outsource their IT operations. Third party companies work with your business on a monthly retainer and can handle all your IT needs.

Access to skilled labor: One of the hardest parts of managing IT operations is finding competent staff. A lot of skilled IT professionals demand a high salary and work for large multinational companies. When you outsource IT, you’ll have direct access to teams of skilled IT professionals. Instead of spending time recruiting and searching for people, you get direct access to talent, and they can focus on meeting your business needs.

IT Outsourcing Best practices:

Hiring nearshore companies: When you outsource IT, you’ll find many opportunities for extremely low-cost labor in offshore countries. Although the labor rates are much lower in some countries, this will also come with language and time barriers which can make things much more difficult for you. Hiring nearshore companies ensures you work with IT teams that share the same culture and time zone as you. This makes collaborating and working on projects much easier.

Track record of company: It’s crucial to check the track record of the IT provider you’re planning to outsource to. Oftentimes, companies can promise a lot of deliverables for an IT project. Check their portfolio and case studies to see exactly what they do for the companies they work with. This is a far better indicator of their service quality than taking their word for it. You can also contact some of their previous customers to get a better idea of how they operate.

IT Outsourcing_ Yuxi Global

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