Corporate giants Google, Nike, Facebook, IBM and Coca-Cola have many things in common. They are all multi-billion-dollar companies. They each employ thousands of people around the world. They are innovators in their respective fields with hard-earned reputations for not being afraid to do something different to stay ahead of their competitors.
An example? In another shared trait, they all outsource at least part of their business operations connected with IT to dedicated offshore teams.
That’s right – even the world’s biggest tech companies appreciate the benefits that come from using third parties to undertake some of the information technology services required by their businesses. They are also not alone. Studies have found that 92% of G2000 companies – a Forbes ranking of the world’s largest public companies – outsource IT services, with spending in the sector projected to reach $519 billion in 2023.
From defining the concept and highlighting reasons to outsource IT services to showcasing common roles, this is a definitive guide for businesses of all shapes and sizes that want to know why so many organizations are looking outside their own four walls for IT services support.
What is IT service outsourcing?
IT service outsourcing is the practice of using external resources to undertake some or all of a business’s technology needs. As opposed to employing in-house individuals or teams to complete such jobs, they partner with outsourcing providers that have expertise in managing tasks as diverse as infrastructure, software development, maintenance and running service desks. Onshore (same country) and nearshore (nearby countries) are two outsourcing options but many organizations are attracted to the many benefits that come from looking offshore to outsourcing destinations such as the Philippines.
What are the common outsourced IT services and roles?
If there is an IT service that can be performed on home soil, you can guarantee there is a highly skilled and more economical option for managing the task offshore.
Hardware, systems and network support
Anyone who has ever encountered tech hurdles they cannot surpass will know how important these people are. They not only design, build and maintain data communication systems but provide hardware and telephony assistance, reset passwords and streamline systems with tech fixes. Think of roles such as these:
- IT Systems Manager
- IT Network Administrator
- Desktop Support Specialist
- IT Helpdesk Specialist
- IT Support Specialist
- Software Developer
- Technical Support Engineer
- Technical Support Specialist
- Web Developer.
Database administration
With compilation and analysis of data rising to the top of many business’s priority lists in recent years, it is little wonder database administration teams are considered a key resource. In addition to storing and organizing data for companies, they ensure compliance with privacy requirements via roles such as Database Support Specialist, Database Support Manager and Database Administrator.
Software development and support
Every great tech innovation starts somewhere and it is usually with the experts who build, design and maintain software systems and applications. They are the people who write the code, roll out programs, fix bugs and keep striving for improvements and fresh innovations. Key roles include Application Developer, Applications Engineer, Programmer, Java Developer, Software Developer, Software Engineer, .NET Developer, Quality Assurance Analyst, Systems Software Engineer and Lead Software Developer.
Web development and support
Websites and apps are modern-day shopfronts for many organizations and that is why the quality of this team can make or break a business. A smooth and seamless online presence is no longer a bonus but a necessity and the web development crew create, design and maintain websites, portals and eCommerce platforms. Key roles include Front End Developer, Back End Developer, Web Administrator, Web Developer, Webmaster, Web Support Specialist and Lead Web Developer.
Information security
The recent Optus hack in Australia when close to 10 million people had their personal data exposed reinforces the importance of cyber security in the modern world. Safeguarding computers, networks and data centers against cyber breaches, viruses or attacks has never been more important and failing to employ a quality team to manage that process can have disastrous consequences. Key roles include Information Security Analyst/Specialist, IT Security Specialist and Information Security Manager.
What are the benefits of outsourcing IT services?
Many business leaders are initially attracted to the idea of outsourcing for financial reasons but soon find themselves just as excited by other benefits. There is no doubt that offshoring makes great economic sense but there is a reason companies that need to boost productivity and increase efficiencies are embracing the concept.
Cost savings
The Philippines is a great example of a country that can deliver significant savings via outsourcing. Due to a lower cost of living than Western nations, businesses can save up to 70% on wages, not to mention avoid expenses related to recruitment, onboarding, training and infrastructure. Attractive tax systems also help companies build highly skilled IT teams without draining their bank accounts.
Improved performance
While there was once a theory that outsourcing could negatively impact quality and productivity, those days are long gone. The IT talent on offer in nations such as the Philippines is renowned for being hard-working, highly skilled and well trained, with onshore clients regularly reporting increases in efficiency and accuracy. Offshore IT teams taking responsibility for repetitive and time-consuming tasks also allows their in-house colleagues to focus on more meaningful and higher value work.
Access to talent
The IT sector has always been a competitive field for recruiters and the global labor shortage has only exacerbated the situation. Between rising wages and limited talent pools on domestic shores, it is little wonder many firms are drawn to outsourcing hotspots such as the Philippines, which has about 71,000 IT specialists already working and more training to join them every day.
Scalability
At a time of economic uncertainty and increasing budget pressures, the ability to quickly scale staffing levels cannot be understated. Outsourcing IT services means business leaders are able to seamlessly grow or downsize support levels to suit prevailing conditions, along with easily adjusting workforce numbers to meet seasonal demands.
Flexibility
Around-the-clock IT support is the dream of almost every business leader and outsourcing helps make it a reality. The combination of different time zones and economical rates means many businesses are finally able to offer 24/7 IT support to their staff and customers, which plays a huge role in bolstering positive sentiment both inside and outside their organizations.
Summary
Outsourcing IT services has already proven to be a game-changer for many businesses. Whether tapping into a certain skills set, setting up an entire offshore team or combining internal and external resources, there are endless opportunities to develop and deploy the framework to suit one’s specific needs. The sheer growth of the sector is evidence that outsourcing IT services is no longer a case of ‘if’ but ‘when’ for forward-thinking organizations.
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