On the surface, acquiring custom website development services may seem like a no-brainer for a business. After all, whether it is a big business or a small one, everybody needs a website or an application that can accurately convey what it does and the kinds of products and services it provides to customers.

But then, why do so many businesses take a pause when it comes to working with a custom enterprise software development company? What it is about outsourcing IT services that make businesses nervous.

In this blog, we are attempting to unpack all of the doubts that generally permeate the minds of business owners about outsourcing IT services. We will be covering the pros and cons attached to outsourcing in detail so that you can get a clear picture of what outsourcing entails for a business.

Furthermore, we will also try to dissect the reasons or the circumstances under which it is appropriate for a business to outsource its IT operations. Let’s dive in!

What is IT outsourcing?

IT outsourcing is essentially when a business hires the services of an external service provider to accomplish a certain IT-enabled business process. It can be anything- from custom fintech software development to building an e-commerce website or an application.

All the various kinds of IT-supported application services and infrastructure solutions that impact the profitability of a business can be categorized as IT outsourcing if they aren’t built in-house and are rather provided by a third-party service provider.

Now that we have covered what IT outsourcing is let’s understand the pros and cons associated with IT outsourcing and whether outsourcing is the right choice for a business.

Pros of IT Outsourcing

Following are some of the prominent advantages of outsourcing processes such ascustom software development for small businesses:

● Cost Savings

Regardless of whether it is an IT-enabled business process or a core competency of yours, an internal team means fixed costs for you as a business owner. Given that you couldn’t or more like you shouldn’t be outsourcing your core competency, it makes sense to outsource what you can, especially when it saves you a lot of money.

There are numerous ways in which IT outsourcing can save you money:

By hiring an offshore custom enterprise software development company, you can leverage the cheaper labor costs of the country in which the company is based.

Similarly, you can leverage the operational efficiency and economies of scale of the offshore company to cut the cost of development and the time it takes to finish the development process.

In the same vein, you can leverage the talent, skill set, experience, and expertise that the offshore development team will bring to the table. It will further save development expenses.

Rather than spending a fixed amount of capital month after month on an in-house team, you can be more resourceful and hire an outsourced service where you can pay variably on a full-time, part-time, or hourly basis, depending upon the services you have actually received from the vendor. Depending upon your needs and the performance of the outsourcing partner, you can prolong or cut short the service contract without getting stuck in a long-term commitment.

This ease of scaling up and downsizing the team, as and when required, will give you a lot of leeway in terms of how you can utilize your capital and whether or not you can invest it somewhere else.

Remember, the ability to pivot or adapt quickly upon encountering a sudden shift or challenge is what makes a business sustain the hard waters of the modern marketplace. You would want to have the option to choose where your money goes.

● Access to Expertise

One of the primary appeals of outsourcing is the opportunity to work with the best and the brightest in the industry, even if they are halfway across the world. As long as you are using the same project management tools as the outsourcing company, you can get the best custom software development services from anywhere around the globe.

Instead of going through all the hassles of searching and onboarding talent, you can use the services of a company that has already done the hard work of vetting and hiring the right talent. Imagine all the time and money you can save by going the outsourcing route. Why wouldn’t a business use this cheat code?

● Scalability and Flexibility

This is how IT outsourcing operations usually work- Tasks are divided among skilled personnel. They collaborate when dependencies are involved, but each is accountable for getting their end of the task done. This considerably fastens the turnaround.

Moreover, you will have the option to scale up and downsize the team as per your requirements. Basically, you will be working with talented professionals on an “On-Demand” basis.

● Focus on Core Business Functions

There are only 24 hours in a day, and you cannot do everything by yourself. Hence, by outsourcing all the support or ancillary services that are not directly interlinked to your core business activities, you will have more time, attention, and energy to give to the core operations.

There are plenty of support activities that take up a lot of your time, but at the same time are equally important for your business to survive and thrive. Operations such as IT development and support, human resources, accounting, legal formalities, marketing, and customer services are crucial for the sustenance of any business. However, businesses often find it difficult to manage these operations alongside their core activities.

Therefore, it does not make sense to spend time and energy on operations, especially when a business does not even have the knowledge or competency to do these tasks to the best of its capacity.

It is a much better option to go for an outsourcing firm that not only has the required expertise to complete the operations but also has the relevant expertise, experience, and infrastructure necessary to do a great job than you.

Hence, by outsourcing your non-core operations, you will be able to focus better on your core activities while simultaneously making sure that ancillary operations are also being undertaken at the very best quality.

● Increased Efficiency and Productivity

When it’s crunch time, outsourcing is the way to go. Thus, you shouldn’t second guess the decision to outsource, especially when you are gearing to launch a new product or service, and you need all hands on deck to beat the competition in time to market.

With a competent team of expert developers, QAs, product managers, and SEO experts in charge, you can take your project to market at a lightning pace without jeopardizing the quality of the product or service.

In addition to that, if you are able to partner up with a reputed custom enterprise software development company, you can rest assured that you will be provided with nothing but the absolute best development services that are at par with the prevalent industry standards and best practices.

Lastly, the contractual nature of outsourcing ensures that the service provider you have hired will do its best to keep you satisfied with the services. An outsourcing firm is very well aware of the fact that if their work is not up to the mark, you are not going to extend the contract, let alone recommend anyone in your circle to hire their services. The majority of outsourcing firms depend on getting repeat clients or referrals, both of which will not come their way if they disappoint you. As a result, they go above and beyond to give you exactly what you want. This means better quality work in a shorter amount of time.

Cons of IT Outsourcing

Despite all of the amazing advantages that a business can enjoy by outsourcing its non-core operations, there are still many businesses that are skeptical about trusting a third party with their projects. The following are some of the reasons that are at the back of the mind of many business owners when they hesitate to outsource operations.

Communication Challenges

There are mainly two types of challenges that a business faces when it comes to communication:

● Language barriers

Even though previously, language barriers used to pose an issue, it is hardly the case anymore. English is read, written, and spoken in almost all major and developing economies around the globe. Even in countries where not a lot of people are familiar with the language, English is still considered the language of international business and therefore, any company that is offering outsourcing services usually hires professionals who are adept at writing, speaking, and understanding English. So yeah, this is not much of a con anymore.

● Different time zones

Another con that is often associated with outsourcing is the time zone difference. But if you look at it closely, this is also not much of a con, really. You can provide feedback according to your convenience, and the team can do their job accordingly when you are sleeping. It is not like you are going to stand over their heads and supervise the whole time because then why wouldn’t you outsource the operation in the first place, right?

The entire purpose of outsourcing is to pick a competent service provider that can do the job better than you and wouldn’t require you to supervise night and day. Hence, the time difference doesn’t really make much of a difference, to be honest.

Security Risks

Data sharing is always risky, no matter how you look at it. If the outsourcing firm you are relying on is not able to protect or, worse, maliciously breaches your customer data, it could genuinely be detrimental to your business. However, these risks could be mitigated.

The first step is to pick your development partner very carefully. Do your due diligence and pick a reliable and trustworthy company that can ensure the safety of your end-user data. Make sure the outsourcing firm is taking adequate safety and protection measures.

Losing on Building In-House Expertise

It is one of the cons that sadly cannot be avoided. The one who walks the walk will always have better knowledge of the roads than someone who is only looking at the map. Let’s understand this with an example- Suppose you have hired a custom fintech software development company to develop a custom credit repair software for your business.

You will get the source code, complete ownership of the software, and even the knowledge of how to use it for your business. However, what you will not get is the knowledge and expertise about how to build credit repair software. For better or worse, the new insights and knowledge that come from working on a project will be earned by the outsourcing firm.

However, you can work with your outsourcing partner to make sure you get a more nuanced understanding of everything that’s going on. Many companies provide detailed documentation and logs to their clients, sharing the processes, tools, and repositories throughout the course of the development.

The outsourcing firm will definitely learn from its mistakes and hone its abilities even more while working on the project. But you are the one who is going to benefit from those learnings eventually. Therefore, this is also less of a con and more of a win-win, isn’t it?

Conclusion

In conclusion, outsourcing IT services can be an effective way for businesses to reduce costs, access specialized expertise, and improve efficiency. However, it is essential to carefully consider the decision to outsource and evaluate the potential risks and benefits before making a final decision.

When considering outsourcing your IT services, it’s important to assess your needs and goals, evaluate potential providers, and weigh the pros and cons. By doing so, you can make an informed decision about whether outsourcing is the right choice for your business.

Hopefully, you found this blog helpful and informative. If you’re interested in learning more about IT outsourcing or discussing your business’s specific needs, please don’t hesitate to contact us. Our team of experts can help you evaluate your options and determine the best approach for your organization.