How to outsource IT in company and why

How to outsource IT in company and why

20.02.2023
6 min.
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Thinking about IT outsourcing? Marek Greško, the Managing Director of TITANS freelancers, Robert Dusík, the CEO of TITANS freelancers and Jakub Konečný, the CEO of TITANS CZ have put down a detailed overview of the benefits and drawbacks of outsourcing.  

What is IT outsourcing?

This method of temporary filling IT positions – until recently mostly popular in the US – is increasingly finding its way to the domestic and European markets, making companies able to react flexibly to market demands in a highly competitive environment. Rising hiring numbers in leading Czech and Slovak companies are the best example of this.  

Companies outsourcing their IT agenda increasingly prefer to hire specialized development teams rather than outsource projects to third parties. This can be explained by the possibility of direct communication with hired developers and full control over the project, including the budget and team members working on it.  

When we look at overall statistics, we can see that up to 43% of IT companies are currently using IT outsourcing in several areas. It is thus the second most outsourced sector after manufacturing.  

(Source: https://brandongaille.com/26-us-outsourcing-statistics-and-trends/

Why do companies usually decide to outsource? 

In the first place, it is the requirement to reduce overall costs. This is something each of us can identify with. Based on many statics, outsourcing is an effective and often used means of reducing costs.  

The second important reason according to statistics is the focus on core business, i.e. the company’s main activities. Outsourcing also plays an important role in freeing up internal workforce and resources. 

You can see the most common reasons why companies decide to outsource in the following statistic. 

Source: Deloitte’s 2016 Global Outsourcing Survey 

(https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/operations/deloitte-nl-s&o-global-outsourcing-survey.pdf

When to use IT outsourcing

The reasons for using services offering the outsourcing of IT professionals vary depending on the situation in a particular company. However, if you answer in the affirmative to at least one of the following questions, hiring IT specialists is right for your company. 

  • Do you want to be able to increase or decrease the number of IT specialists flexibly? 
  • Do you want to start work on projects for which you lack internal IT capacity quickly? 
  • Do you need a particular specialist who is not a member of your team? 
  • Do you need to hire an IT specialist for a project in a matter of days? 
  • Do you want to focus on your core business and not trouble yourself about IT capacities? 
  • Do you want to make your IT department more efficient? 
  • Do you want to minimise risk in your IT projects? 
  • Do you want to reduce salary and operational costs? 

The benefits of IT outsourcing

  1. Reducing the costs associated with hiring employees such as management, training, health insurance, taxes, etc. 
  1. An ideal alternative in the case of lack of IT resources that would cover your needs or the absence of certain positions in your IT budged.  
  1. Hiring IT specialists from a reliable supplier is safer and more profitable than hiring a freelancer. If the supplier cooperates with their IT specialists on a long-term basis, they can guarantee the quality of their service, the necessary qualifications and professional experience. 
  1. The ability to focus on your core business while the IT provider focuses on their own, i.e. the delivery of professional IT services. 
  1. Significantly better services and experts whom the company would otherwise have to pay as well as invest in their development.  
  1. The availability of experts needed for your projects allowing for faster start and implementation of projects where delivery date and saving time are important. 
  1. The possibility to benefit from a high-quality selection of contractors thanks to technological know-how and system and database capital. 

Drawbacks and possible risks of IT outsourcing 

Whenever you transfer responsibilities for your business to someone else, it brings some risks to you as well. If you are outsourcing IT functions, you should be aware of the following risks: 

  1. Some IT functions are not easily outsourced because they are crucial and influence the creation and definition of the company’s strategy greatly (e.g. functions responsible for the use of IT budgets, etc.). 

Solution: In this case, we recommend not to outsource the activity in question. 

  1. Loss of control over the activity or disclosure of sensitive information and data. 

Solution: The security risks of outsourcing are currently being overestimated. There are comparable risks when IT services are delivered by internal employees. The solution in this case is to choose a reliable supplier who can guarantee the protection of intellectual property, for example by entering into a non-disclosure agreement (NDA) with the specialist who comes into contact with important data when carrying out his activities.  

  1. After the project is concluded, you may lose professionals and their know-how. Building a new department can then take months.  

Solution: To minimise this risk, it is necessary to request from the contractor the know-how and the completion of project documentation before the end of the project.  

Why outsource with TITANS?

You only pay for the actual work: Our customers always pay only for the time spent working based on an hourly rate which makes the management of wage costs more effective for them, and they do not have to pay for employee downtime which often occurs during projects.  

We are fast: We can provide a new specialist within eight days of request.  

We offer guarantees: Our IT specialists have the necessary training and certifications needed to perform the required work professionally. However, if you are not satisfied with the quality or the performance of the IT specialist, we will find you a replacement within 20 days. 

We have an individual approach: Our recruiters participate in all job interviews to better understand what kind of IT specialists you are looking for, so they will only provide you with the profiles of IT professionals meeting your requirements. 

We can guarantee high commitment: We have our own system of benefits for IT professionals based on their performance. Motivation is important to us. 

We save your time: We will carry out the pre-selection of specialists for you. 

Wide reach: We search for suitable IT specialists with expert IT recruiting teams with reach into the global IT professional market.   

Wondering what would outsourcing look like in your company? Continue to this article that will guide you through the whole process. If you would like to discuss the possibility of outsourcing, contact us. 

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