Why is IT outsourcing profitable and what are its advantages
Guys, has anyone thought about how who chooses a contractor company or a person for a team to perform certain works with their it-infrastructure? So you have your own product, project, or maybe you work in some large company, but one way or another, if you work in the IT field, then you have your own infrastructure that needs to be monitored. This requires a team that will not only meet all the latest practices in working with this infrastructure, but also provide an appropriate level of support, development and, in general, will find a balance. It will push the business forward to development, providing all the necessary processes for this.
In each of these cases, we have an infrastructure that has somehow developed and is developing right now. But the current state of affairs, as a manager, does not suit you and you start looking for how to fix it.
What options do you have?
- If the project is small and there is no money to hire someone, then the easiest option is to do it yourself
- Assemble your own team of professionals
- Find a contractor company that will close the matter
So which option should you choose and what should you start with?
Well, no explanations are required here, everything is quite simple.
- The project is under development
- There are no extra funds on the project
- At this stage, it is more profitable to do it yourself, even without having the appropriate experience, than to attract someone
What are the disadvantages of this option?
Without the necessary experience, the task to be solved will be solved, but the foundation will not be laid for further scaling and development of the system, both vertically and horizontally.
All responsibility for execution falls entirely on your shoulders.
A business will not develop while you are not doing your own tasks
Assemble your own team of professionals
Let’s say your project or the current company where you work has already grown to the point where the potential hour of downtime is not comparable to the cost of maintaining your infrastructure for a month. You incur more losses, both in financial terms and in the reputation of your company than if:
- Hired an HR or would enter into a contract with an HR agency
- Analyze the required size of the team that will deal with the infrastructure
- The selection of candidates has begun
- You would recruit the optimal number of people for your project
- Pay them a salary (let’s not forget about taxes)
Of the minuses we have:
- HR costs
- Typically, hiring an employee takes 10X their salary
- You need more than one employee, you need a team
- One employee will not be able to cover 24/7, while not burning out, you need at least 5 people, taking into account vacations, sick leaves
- You can’t ask your team for downtime (you can’t fire them, you will have to recruit a new team)
- The team constantly needs to be pumped, increasing the level of expertise and loaded with work
- The team burns out when they work with one stack of technologies for a long time, something needs to be done
- You need to come up with and organize processes in your own team, in your own IT department
Find a contractor company that will close the matter
- The contractor can set up deadlines
- Business is afraid of becoming dependent on an outside contractor
Although I myself have been working in outsourcing for about 5 years and I see that when working with it, the business receives only advantages.
- The team provided by competent outsourcing always has the relevant necessary experience for your project
- You don’t need to spend HR resources on this question!)
- Outsourcing, as a rule, offers flexible tariff plans tied to the hour, which gives you the ability to “move” this slider up and down. When there are tasks, increase the outsourcing involvement; when there are none, decrease
- The issue closes 24/7, almost all normal outsourcing companies provide these options in the form of support and incident response
- Work with outsourcing is accompanied by an NDA, an SLA agreement, you can communicate with her regarding the quality of the services provided
- You do not need to prepare the team, you will be given it already ready, of the appropriate level
- Often, the outsourcing team is ready to offer an alternative solution to the issue and defend it more than the employees of your company – high-quality outsourcing is impossible without constant progress
- All possible sick leave/vacations/time off / bus factors are provided, you will be given another engineer/team
- Such teams always have a broad outlook on the stack of applied technologies because they work with a large number of projects, can compare the use of different practices, and always take only the best. And indeed it is!)
And what prevents a business from leaning towards outsourcing? Now, when there is an obvious shortage and shortage of specialists in the market (such as DevOps), most companies are still looking for employees for their staff, although in most cases they do not even think about why they need their own person/team, if outsourcing is cheaper in the long term?
What is the stop factor?
- Do you want to see a person in the office?
- Do you think this is not confidential? At the same time, you yourself want to be hosted in AWS, GCE?)
- Do you think that if it is yours at full time, then it will bring more profit? Sure?
- Are you not ready to work with a person “incomprehensible” to you at a distance? Want live communication? During the coronavirus?
- Do you already have almost all “inhouses”? So why not make the same command? And if you think about it, what could be done otherwise? Outsource everything and trust the professionals in their field
- Or is it because it has happened historically and is how everyone around you does it?
If you think about the reasons that the business calls when faced with outsourcing companies, then none of them can formulate specific points, because of which they are not ready to cooperate with outsourcing. Unless, of course, it’s not a question of price.
But if you look at the trend, then in 5, maybe 10 years, more and more managers will turn to outsource companies, which optimize the costs of maintaining infrastructure, at least in human resources.