What is IT outsourcing?

IT outsourcing is the practice of using an external service provider to deliver some or all of the IT functions required by a business including managing infrastructure, directing strategy and running the service desk.

IT outsourcing providers can take full responsibility for all IT maintenance and support, this is called a fully managed service, or they can provide additional support for an internal IT team, this is sometimes referred to as co-sourced IT support and is usually an approach taken by larger organisations.

A company may use one provider for all their IT requirements, or multiple service providers to deliver different elements.

Types of IT outsourcing

Offshore outsourcing

This involves sending IT-related work to a company in a foreign country, such as India, China or the Philippines, which offers political stability, lower costs and tax savings.

Nearshore outsourcing

The process of sending IT-related work to a company in a country that shares a border with your own. Theoretically, this should make travel and communication between the two companies easier.

Onshore or domestic outsourcing

This involves contracting an external service provider, located in the same country as you, to provide IT-related work, remotely or on-site.

Cloud computing

Contracting an external service provider to provide IT-related services over the internet, such as Infrastructure-as-a-Service, Platform-as-a-Service and Software-as-a-Service.

Managed services

This involves contracting an external company to provide network management functions such as IP telephony, messaging and call centres, virtual private networks (VPNs), firewalls and networking monitoring and reporting.

Which IT Services are typically outsourced?

• Application/software development
• Web development/hosting
• Application support or management
• Technical support or help desk
• Database development or management
• Telecommunications
• Infrastructure – hardware, software and network installation and support
• Networking and communications
• Disaster recovery
• Data centre management
• Data storage
• Email
• Security – virus, spam and other online threat protection

There are a number of reasons why businesses choose IT outsourcing. It can enable companies to reduce costs, increase productivity and take advantage of external expertise, experience and assets.

NEXT>> The pros and cons of outsourced IT support versus an in-house IT team