Outsourcing trends are not new to the IT services market. However, it has boomed in recent years. Projections say that the outsourcing industry is only expected to grow. According to a McKinsey & Company report, Poland’s ICT sector spending will increase more than five times by 2030.
Global outsourcing revenue has increased from $45.6 billion in 2000 to $92.5 billion in 2019. All indications are that this sector will expand further. Working for an outsourcing firm can lead to a long-term career with genuine opportunities for advancement and growth.
What is IT outsourcing?
Outsourcing model is a business strategy in which companies hire outside suppliers to provide specific goods or services rather than producing them in-house. This can include a variety of tasks such as software development, computer network management, and IT equipment maintenance. Companies frequently use outsourcing processes to save not only labor costs but also time. While gaining access to specialists in a specific field.
Outsourcing IT – outsourcing business functions, service levels, and types
Companies in this industry differ in many aspects, such as the scale of operations, customer profile, business model, and many others. IT outsourcing can be divided into two categories: services provided and location.
Here are the main types of IT services that outsourcing includes:
- Business process outsourcing (BPO): outsourcing providers concentrate on tasks related to business services. Such as outsource customer service, accounting, or human resource management.
- Integrated Management System (IMS): an outsourcing company providing people for infrastructure management tasks. Such as server, computer network, and IT equipment maintenance, to a third party.
- Software development outsourcing: entails delegating software development tasks to a third party. Such as application development, code enhancements, or technical support.
- Project management outsourcing: entails delegating IT project management tasks to an outside company. Such as team coordination, planning, monitoring progress, or reporting.
- Knowledge process outsourcing (KPO): the process of outsourcing data-driven knowledge-intensive activities. Such as gathering, managing, analyzing, and delivering objective insights into businesses.
Breakdown in terms of location:
- Domestic outsourcing: contracting out tasks to a third-party provider based in the same country as the outsourcing company.
- Regional outsourcing: contracting out tasks to a third party located in the same region of the world as the company, such as Europe or Asia.
- Global outsourcing: contracting out tasks to an external service provider located in a different country than the company using outsourcing services. This could include companies based on a different continent or in a different part of the world.
- Hybrid outsourcing: involves combining various types of outsourcing, such as domestic and global, to achieve the best balance of flexibility, cost, and service quality.
Who will find themselves in the IT outsourcing model?
If you like variety and flexibility in your work, outsourcing could be a good option. Do you perform well in business environments? You will have to deal with a large number of clients as well as teams in the outsourcing model. In the outsourcing mode of work, you will have the opportunity to gain experience in many technologies and grow in many directions.
Who is IT outsourcing not for?
Do you prefer to work in a stable, predictable environment? Do you enjoy collaborating with other team members? You will probably feel uneasy in an outsourcing model, as everything happens dynamically in this working model. Projects also change quickly, and the path to self-development is not as clear as it is within a single company.
Then there is the issue of the so-called “bench” – familiar with programmers who work in outsourcing and software houses. Here you will find a post about whether the IT bench is evil in and of itself.
Why does IT outsourcing pay off for business owners?
Outsourcing can be beneficial for companies, and not only because of the reduced cost. Here are some reasons why companies choose to outsource IT:
- Access to expertise and experience: Outsourcing allows businesses to benefit from the knowledge and experience of specialists from outside companies. Which can result in better service quality or increased efficiency of company processes.
- Flexibility: Outsourcing allows businesses to adjust the size and type of outsourced services to meet current business needs.
- Time-saving: Outsourcing allows businesses to delegate tasks to third-party providers, eliminating the need for employees to be involved in IT-related work. This allows businesses to concentrate on their core business activities.
As an external employee, you have many opportunities for continuous learning. You will most likely work for global clients, giving you the opportunity to observe various cultures, industries, approaches, structures, and technologies.
What else is in store for you in IT outsourcing?
- Traveling for training purposes, either domestically or internationally
- Participation in certification programs
- Loans or grants from a service provider to continue or begin postgraduate studies
- Direct contact with other professionals who will give you the opportunity to expand your skills in new areas.
Do you see yourself working in such an environment?