Hiring or outsourcing: which is better?

Today, we would like to share our opinion on the key benefits of choosing IT outsourcing over relying on in-house staff, especially for companies in industries with limited experience in the IT field.

We would like to highlight three most important advantages of outsourcing IT, based on our personal experience and perspective.

1. Cost Reduction

Some companies may mistakenly believe that hiring an employee is more economical than IT outsourcing. In many cases, this assumption proves untrue. Let’s delve into this perspective:

  • First, a company must identify a suitable candidate with specific hard and soft skills. In some instances, training the employee becomes necessary, incurring both time and financial investments. In contrast, IT outsourcing partners typically invest in continuous training for their employees, ensuring they stay current with the latest technologies and industry best practices. This eliminates the need for the client to bear the costs associated with the ongoing training and development of an in-house team.
  • Second, the company needs to provide all the necessary IT infrastructure, including equipment, workspace, and other essential software and tools. IT Outsourcing partners, on the other hand, already have all the needed infrastructure in the provider’s location.
  • Third, eliminate expenses such as employee benefits, insurance, and other perks associated with maintaining an in-house workforce. This contributes significantly to cost savings. Companies should also consider the impact of in-house staff sick leaves and vacations.
  • Fourth, outsourcing providers often specialize in specific services or processes, leading to increased efficiency and productivity. This efficiency can result in cost savings, as tasks are completed more swiftly and effectively.
  • Last but not least, the aspect of cost savings through outsourcing involves transforming fixed IT costs into variable expenses. This flexibility allows for strategic budget planning, enabling adjustments in expenditure based on month-to-month requirements and the ability to scale up or down as needed.

2. Stay Focused on Company Core Business 

Essentially, the advantage of “Prioritizing Core Business Functions” ensures that a company directs its internal resources towards its strengths, promoting innovation, efficiency, and strategic growth. Further elaboration on this concept will be provided in the following four bullet points. 

  • When certain IT functions are outsourced, the company can allocate its internal resources, including time, manpower, and budget, to activities that directly contribute to its core business objectives. This ensures that the organization is utilizing its resources in the most efficient and impactful manner.
  • While opting for IT outsourcing, an organization doesn’t necessarily mean a complete exclusion of in-house IT staff. Often, outsourcing is employed to tackle specific weaknesses within the organization or to contribute to in-house IT staff for larger projects. This strategic decision enables on-site staff to concentrate on their specialized areas. For example, if a company outsources IT to manage change requests for a newly planned system, its internal team can then prioritize tasks such as addressing essential customer inquiries or implementing a new core homepage.
  • IT Outsourcing enables a company to synchronize its strategic objectives with its internal capacities. Delegating specialized tasks to external experts allows the organization to concentrate on cultivating and elevating its core competencies, often the distinctive strengths that differentiate it in the market.
  • IT Outsourcing allows a company to align its strategic goals with its internal capabilities. By entrusting specialized tasks to external experts, the organization can focus on developing and enhancing its core competencies, which are often the unique strengths that set it apart in the market.

3. Access to Global Talent 

In essence, the “Access to Global Talent” aspect in IT outsourcing not only grants access to a diverse skill set but also introduces cultural diversity, scalability, and the capacity for continuous operations. This, in turn, plays a pivotal role in the overall success of outsourced projects.

  • Let’s start with the technical factor and skill-sets. IT outsourcing allows companies to tap into a global pool of professionals with diverse skills and expertise. This diversity ensures that the outsourcing partner can provide specialized talent that aligns with the specific requirements of the project.
  • Global IT outsourcing also provides scalability, allowing companies to quickly scale their teams up or down based on project requirements. This flexibility ensures that the right talent is available at the right time, optimizing resource utilization.
  • Global IT outsourcing allows for round-the-clock operations as teams in different time zones can work on projects sequentially. This can lead to faster project turnaround times and improved efficiency, especially for tasks that require continuous attention.
  • Finally, it’s important to mention that when you work with people from different cultures in global IT outsourcing, it brings in diversity. This is very important for projects that are worldwide. People from various cultures bring in great ideas, making sure that solutions work well with different people. Understanding different cultures helps with better communication and creating designs that meet the needs of users from various backgrounds

To sum up, these are only three among the numerous benefits of opting for IT outsourcing instead of an in-house staff. However, in various scenarios, IT outsourcing might not be the most advantageous choice for the company’s strategy and circumstances. Every decision comes with its own set of advantages and disadvantages. Each case requires an individual examination. Nonetheless, a carefully implemented outsourcing strategy has the potential to bring about numerous advantages, revitalizing the efficiency and profitability of the company.

Ltech.lv specializes in providing IT outsourcing services. Explore our technology stack and industry expertise by visiting our homepage at https://ltech.lv or reaching out to me directly. We are dedicated to helping you unlock these advantages and elevating your business to new heights.