Posted on Wednesday 7 November 2018
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The potential of IT outsourcing

In IT, nearshoring and offshoring have become trending terms in the last decade. In many cases, the discussions of these two terms are not more than discussions about balancing between cost and quality. Today’s requirements regarding business climate and company’s culture require an augmentation of the IT outsourcing regardless of its type.

No matter what our working involvement in a business is, we are charged with understanding its reasons for being, fulfilling its customer’s needs, and optimizing its performance and offerings on one hand, and on the other hand a comprehensive perception of the organization as a separate entity with employee’s satisfaction, career development paths and internal culture.

Today, more than 85% of the companies using nearshoring and offshoring use talent sourcing broadly and strategically for every aspect from developing world-class talent to binging new products and solutions to competitive markets faster. That leap towards perceiving and treating outsourcing beyond mere cost-cutting, lead to developing and building a diversity of strategic capabilities:

  1. To tap into the global talent

Emerging markets face shortage of talent which impedes company’s ability to constantly grow. Outsourcing and offshoring enable companies to tap into the global knowledge base and have access to world class knowledge as a competency pool. In this way, companies can have processes delivered by dedicated teams that have operational and domain expertise in the outsourced process which in the field translates into greater operational efficiency.

  1. Overcome talent shortage and reduce resources for recruitment

Overcome acute talent shortage and labor market fluctuations by building teams through near or offshoring in countries with rich pool of qualified, English speaking professionals, while freeing up the internal human resources.

  1. Focusing on core business processes and disrupting traditional business models

Companies can easily focus their resources on building and developing their core business processes while delegating the supportive processes which cause mundane time consumption to other companies. While outsourcing these functions, companies develop strictly lean and flexible operations and wash their hands off functions which are difficult to manage and control while still realizing their benefits.

  1. Lower infrastructure investments

Cutting back drastically on expensive infrastructure requirements such as IT systems as a heavy investment, can keep company’s costs low by outsourcing these functions.

  1. Accelerate migration to new technology

Companies can migrate to new technologies with minimum downtime and increase productivity and quality by outsourcing IT processes, and enjoy enhanced productivity and quality.

  1. Lowering risks

Company’s teams across multiple locations enable the company to reduce the risks of work lags, insufficient customer engagement, communication, overlays in the work processes and burnt employees.

  1. Taking control of all operations

Outsourcing and offshoring strengthens and expands control on operations by allowing the company to create a dedicated core group of staff to work and focus on that company only and enable the same to sophisticate the processes by establishing control on all of the aspects. This leads to increased productivity and sense of accountability from each team member.

  1. Innovation and cultural diversity

Traditionally innovation has been perceived as one of the sources of competitive advantage in fast changing industries. To keep up with market forces and changing customer tastes, companies need to be innovative by tapping into both internal and external knowledge. Nearshoring and offshoring enable companies to tap into not only another pool of knowledge, but also into a pool of cultural differences which leads to diversity of ideas, innovation and fresh perspectives in the certain field.

  1. Process and management done better

If outsourced strategically and with appropriate governance mechanisms, outsourcing regardless of its type, can serve for detecting the gaps as well as the knots in the processes.

  1. Safer intellectual property

Even though sharing the intellectual property comes with a risk, if managed right and according the national law by which the outsourcing company is governed it can be safer abroad.

  1. Enhanced risk management

Risk is an imperative in organizations striving for growth and development. Outsourcing certain functions to different companies involves understanding, analyzing and addressing risks to the right people who will make sure the objectives are achieved through risk management standards and certain relevant competencies, knowledge and experience.

The globalization of markets and business operations is a trend that will continue strongly in the coming decades and one inescapable aspect of that has been the trend toward global outsourcing. Shifting the perception of outsourcing as a knowledge-based service, we can do much more than balancing between cost and quality, and start developing strategic competencies and capabilities positively influencing every aspect of our company.