IT outsourcing in practice - project management strategies and profitability
Outsourcing is one of the more popular business practices in recent times, in which two companies, in partnership, work together - one of them has a certain need, and the task of the other is to meet that need. Outsourcing, then, is nothing more than the outsourcing of processes to other companies, entities, from a particular segment of the economy.
The solution allows tasks to be done better, faster, with less effort and money, by better-trained specialists. This business model is divided into different types, as we wrote about here: Outsourcing, nearshoring, body leasing....- what they are and what makes them different. But what does IT outsourcing look like in practice?
What is IT outsourcing?
IT outsourcing, and in particular the outsourcing of programmers, is one of the more popular types of outsourcing. We have written in detail on this topic here: Outsourcing programmers - a flexible way to scale an IT team. The Polish IT services market has very high potential, and the IT specialists here are considered among the best both in Europe and the world. In the area of IT outsourcing, one can outsource, for example, IT support in the broadest sense, creation, maintenance and development of applications, software production, data storage or Business Intelligence (BI) or Salesforce solutions. But how does outsourcing work in practice?
IT outsourcing in practice - what it looks like
What does outsourcing look like in practice and what are the benefits? Start with simplified management of IT infrastructure. When the process is delegated to a company specializing in a particular service, the management processes are much simpler, shorter and faster. This not only means lower costs, but also reduced time to market for the product/service.
IT Outsourcing - Project Management
The benefits of better project management in IT outsourcing are extensive. Long experience in the IT industry is no substitute for experience and competence in managing other areas. But what do they involve and what are the main tasks in this type of process? These include, for example, management of the organization's long-term project plan, reduction of expenses in projects, which is achieved through increased efficiency in the use of resources, substantive support of Project Managers in solving complex project issues or supervision of project management methodologies.
What are the advantages of outsourcing IT and managing IT projects by the right professionals? It starts with immediate access to appropriately selected, qualified personnel who have the specific competencies needed by the client at a given time, and the ability to obtain the needed competencies only for the duration of a given project, without the costs and limitations of employment based on an employment relationship. It is also definitely a higher efficiency of implemented projects, the possibility of obtaining expertise for in-house employees and the use of modern IT tools for Project Managers.
Practical project management tips
The good practices developed by companies for effective cooperation between IT outsourcing partners make the processes they implement effective, efficient and cost-effective. We present some good practices in this regard:
- Designate a person responsible for working with the outsourcing partner
Having a person specifically assigned to the project, versed in the company's area of operation, will guarantee effective implementation of solutions.
- Introduce your employees to the principles of working with your IT partner
Communication in a partner-to-partner relationship is not enough. It is worthwhile to take care of internal communication, to employees and to inform them about the outsourcing cooperation, especially when it involves a large project and will have a real impact on the development and future of the company.
- Be open to suggestions from your outsourcing partner
Remember, an outsourcing partner is just that - a PARTNER, not a subcontractor or contractor. He is a specialist you can trust. So be open to his suggestions - when you made the decision to outsource your processes you were guided by certain criteria, and this partner has met them.
What IT outsourcing mistakes to beware of?
In the previous paragraph, we stressed the need to clearly present the principles of the outsourcing partnership to your colleagues. However, presentation is not everything. There is a risk that the principles and scope of the partnership are not clearly understood, and that the parties will expect much more from each other than is written in the contract. Another of the issues that could negatively affect the partnership is the use of communication channels other than those agreed upon, which could result, for example, in increased time for each task. Also important is the issue of not providing the outsourced company with up-to-date and key information regarding, for example, IT infrastructure, personnel changes in the company or other key data. This can even result in the paralysis of cooperation or the need to carry out processes from scratch. Data is very often the basis for effective and reliable execution of a task.
Is IT outsourcing profitable?
What does IT outsourcing entail in financial terms? First of all, it's minimization of company costs, that is, better optimization of company expenses, as well as constant access to qualified specialists. It's also the elimination of the problem of recruiting new employees, a high degree of flexibility in determining one's needs and the overall flexibility of cooperation. In terms of cost-effectiveness specific to IT outsourcing, one can mention, for example, access to modern solutions and software, ongoing IT consulting and support, as well as increased IT security and accountability of IT operations in the company. It also directly translates into quick response time at the time of a potential failure, and consequently - a much easier focus on the company's target tasks and the essence of the outsourcing partner's business.
Comparing the cost of outsourcing vs. an in-house IT team
Are the above theses just generalities? Does it really translate into reality and IT outsourcing in practice equals lower costs? Hiring an in-house team of employees generates many hidden costs that we do not consider at first glance. These include, for example, recruitment costs, provision of work space and equipment, vacations, benefits, bonuses or employee turnover. We have written in detail on this subject here: Outsourcing or In-house IT - which is more profitable?
There has been a lot of talk about outsourcing lately. About IT outsourcing even more. The world is moving forward, and companies don't want to fall behind the technological advancement of their competitors. The answer to these needs is precisely IT outsourcing, which helps at a lower cost to do something better, faster and more efficiently. Both sides of the partnership benefit from this partnership.