Outsourcing has become a new norm for many companies today. In this article, we will highlight some important IT outsourcing models so that you know better. Did you know that 80% of small businesses outsource their work? Companies outsource IT, HR, graphic design and other important services, and more and more businesses are relying on outsourcing agencies every day. This is because both affordability and efficiency are achieved by opting for such services.?
Coming back to IT outsourcing, there are three types of models, and we will be providing an overview of them. This way you get to choose the best and most suitable model to meet the requirements of your business.?
There are three most common types of IT outsourcing models. You can either hire your agency via onshore, nearshore or offshore outsourcing model. We will take a look at them one by one and help you understand which one will work for you the best:?
Onshore IT Outsourcing?
Your onshore outsourcing partner typically resides in the same country and time zone as you, and the hired employees can visit you in your office. If you have a time-sensitive project in mind, then this may be the option for you.
Here are some advantages of onshore IT outsourcing:
- You have more control over the project
Since your onshore team or professional works with you in-house, you can clearly communicate and send your message across. This way you can evaluate, analyze and give your feedback on time with regards to any developments of an ongoing project, and also troubleshoot any problems with immediate action.
- You get to enjoy better quality work
One of the key benefits of hiring onshore professionals is that you get high quality work. There are two main reasons for that. Firstly, it is easier to hold them accountable for any mistakes that they make. And also, they will be more familiar with the work culture that your company follows. Therefore, the kind of work that they produce will most likely be according to your liking and interest.
- Your security is enhanced
Security and encryption are two of the most fundamental aspects that all companies should prioritize. With rising cyberattacks and data hacking, companies have to be one step ahead to minimize any threats. An onshore team works with you physically as they are located in-house and follow the same security protocols as your company.
Onshore IT outsourcing proves to be an asset for many businesses. There are some extremely beneficial advantages to opting for it, but it also has some shortcomings that need to be highlighted.
Here are some disadvantages of onshore IT outsourcing:
- It costs more
While onshore outsourcing allows you to enjoy great service with better quality and less ambiguity, all of this costs more. Onshore outsourcing is the most expensive model and if you are thinking of adopting it, you may end up spending a lot of money. Hiring project managers, providing resources and technical equipment are just some of the things worth mentioning here. Also, since your onshore professionals live in the same time-zone and country as yours, you will have to pay them wages on par with local industry standards.
- You have limited resources
One more disadvantage of onshore outsourcing is that you have limited options and resources that you can utilize. The reason for this is that not all service providers work in-house and the ones that do are not always available.
Nearshore IT outsourcing?
When you outsource IT services from a nearby country, you are using a nearshore IT outsourcing model. Such type of outsourcing is suitable for projects having a time-sensitive deadline. Just like onshore outsourcing, time is the main element that has to be considered while opting for nearshore outsourcing.
Some of the advantages of nearshore IT outsourcing are:
- You have shared language and culture
This benefits all kinds of businesses. When you coincide in terms of language and culture, it becomes easier for both the parties (you and your service provider) to understand everything clearly. There is minimum ambiguity, and every message is conveyed and delivered properly. This works in your favour, as well as in your partner agency. You will be able to give them correct instructions, and the outcome will be a well-executed project.
- There is no time-zone difference
Residing within the same time-zone ensures that your working hours are the same and you can provide services to the clients effortlessly. While you work in your office, your nearshore team will also be working with you, and if there is any scenario where the coordination of both is required, it is easier to collaborate.
- You get an established infrastructure
You don’t need to worry about building an infrastructure for your nearshore team. They utilize their company?s already established infrastructure, saving you money, resources and efforts.
- It is a cost-effective method
Comparing nearshore to onshore outsourcing, the former proves to be much more affordable. While in an onshore model you need to provide equipment, infrastructure and other resources, the nearshore model does not require any of these investments. Rather, the professionals work in their own space, utilizing the resources of the company that employs them.
Nearshore outsourcing also comes with some limitations:
- They may have limited infrastructure
Yes, many companies do not pay attention to their infrastructure because they rely on the hiring company to provide them with those facilities. If your nearshore outsourcing company is not up to the mark with your requirements, you may face problems as they won’t be able to provide you with the service that you expect. On the other hand, in many cases, you will have to deliver them with all the resources necessary for a good service, costing you a fortune.
- Distance may create a hurdle
Effective communication is always affected because of distance. The service provider’s location may be further removed from the client than an offshore supplier. Companies may find it more difficult to connect with their service providers and as a result manage projects.
Offshore IT outsourcing?
When you hire a company located in any part of the world, you are opting for offshore outsourcing. Companies opt for this kind of outsourcing to expand, save money and get work done efficiently. Offshoring often gives you an opportunity to explore talent across the globe irrespective of the geographical aspects.
There are some amazing benefits of outsourcing offshore IT services. Let?s take a look at some of the advantages of offshore outsourcing IT services:
- You can save money
Offshore outsourcing is one of the most cost-efficient models. Because many countries have lower labour costs, this can work in your favour as hiring remote staff lets you enjoy efficient services at an unbelievably affordable rate.?
- You can access larger talent pools
Many countries that are suitable for offshore staffing often give you access to a larger and more skilled labour pool. Take for instance, the huge talent pool countries like India and the Philippines have. These professionals and experts work for overseas companies at a reduced cost due to the lack of opportunities in their own country.?
- You can work with flexibility
Offshore outsourcing allows you to scale your operations up or down as needed. This might be useful if your company is cyclical or if you need to cut expenditures during a difficult economic period.
Offshore outsourcing comes with some disadvantages:
- You may have less control over your team or project
Loss of control over your business is one of the most serious consequences of offshore outsourcing. This might occur if you are unsure of your offshore partner’s expectations and processes.
- You may face communication issues
If your offshore outsourcing team does not speak your language, it can create a communication gap and result in poor quality work and service.
Conclusion:?
Using the insights portrayed in this article, you can evaluate all the advantages and disadvantages of? IT outsourcing services. By clearly understanding your goals, you can take a decision that best suits your interests and choose the perfect model that your business requires.
As the editor of the blog, She curate insightful content that sparks curiosity and fosters learning. With a passion for storytelling and a keen eye for detail, she strive to bring diverse perspectives and engaging narratives to readers, ensuring every piece informs, inspires, and enriches.
