Learn About IT Outsourcing and How It Works

Business people with headsets working at computers in office
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These days, hundreds if not thousands of companies use outsourcing to some degree, much of it involving the technology sector. IT outsourcing involves sub-contracting or "farming out" certain information technology functions to independent, third-party companies or individuals, instead of keeping those functions in-house. Another term often used to describe overseas hired help is "virtual". As in, a "virtual worker" or "virtual staff".

Let’s dig deeper into it and figure out whether it’s something you or your business should consider.

Types of IT Outsourcing

There are several types of IT outsourcing, defined by where the outsourced work happens. These include:

  • Moving business/services overseas, typically to take advantage of lower costs and/or a more favorable economic climate
  • Nearshoring: transferring business/services to another country close by, oftentimes sharing a border with your own country
  • Homeshoring/onshoring: allowing employees to work from home rather than an office, factory, or related physical workplace

Examples of Frequently Outsourced IT Services

  • application/software development;
  • web development/hosting;
  • application support or management;
  • technical support/help desk;
  • database development/management;
  • telecommunications;
  • infrastructure

Advantages of Outsourcing

There has to be a good explanation for why so many places are doing it, right?

Here are some of the reasons that companies/entrepreneurs are choosing to outsource parts of their business.

  • Expertise: sometimes an overseas vendor/business has special equipment and/or technical expertise, making them better at the given task than employees within the outsourcing organization
  • Reduced costs: a big draw to outsourcing work overseas is reduced costs for labor, operations, and even equipment
  • Staffing flexibility: according to James Bucki, "Outsourcing will allow operations that have seasonal or cyclical demands to bring in additional resources when you need them and release them when you're done."

Disadvantages of Outsourcing

Here are some potential disadvantages to outsourcing.

  • Language/cultural barriers: these can affect both employees and customers, especially when clear explanations of the problems and solutions are required
  • Different time zones: this can add as a barrier to communication and coordination with the hiring company
  • Slower turnarounds: the language barriers coupled with time differences can sometimes lead to longer project/resolution times
  • Possible loss of quality, unless you invest time in a rigorous screening process

Where to Hire Outsourced Help

There are many places to find outsourced workers nowadays.

Depending on your company’s needs, you may be looking for just one person, or a team, or an entire department.

Finding individual virtual employees or small teams is usually fairly simple. Here are some places to look:

  1. Upwork: Formerly oDesk and Elance, Upwork is a great place to find overseas freelancers or more permanent full-time help. Anyone can sign up as a member in various work categories, so you’ll need to do all the legwork of reading through the freelancer profiles and proposals. Posting jobs is free.
  1. Virtual Staff Finder: This site is like a matchmaking service for entrepreneurs seeking virtual help. While there are higher upfront costs, the virtual workers they match you with are top-notch, which equates to less search time on your end.  
  2. Easy Outsource: This platform works on a monthly subscription basis, where you only pay when hiring workers. They also offer a free plan that allows you fewer hiring privileges.

Aside from these three, there are many websites online for finding virtual talent. If you’re looking for short-term help or cheaper rates on simple tasks, outsourcing may be the right move for your company. However, remember to be smart about it and don’t just opt for the cheapest bid, because it’s also frequently true that you get what you pay for.