Global outsourcing is an almost $93 billion industry that involves business process outsourcing (BPO), with Information technology outsourcing accounting for nearly $70 billion of that total. This practice helps companies improve productivity and reduce work cycles, but its success depends on how it’s leveraged.
Different Types of Outsourcing
Any company that chooses to enlist the help of a third-party company needs to decide which type of outsourcing option they commit to, which include:
- Offshoring: The practice of partnering with an overseas service provider. Key requirements are that the country is relatively stable and has the means to fulfill the client’s needs. Offshoring is a tax benefit to companies in addition to being cost-effective. India is the top country for tech outsourcing.
- Nearshoring: A geographically advantageous form of offshoring, where the country is in the same region as the company. While there could also be a tax benefit to this option, the biggest advantage to companies is that there’s little time zone difference, so they can provide real-time services.
- Onshoring: The practice of outsourcing to a third-party company within the same country. The primary benefit is the lack of a language barrier and the ability to provide real-time support due to a minimal time difference.
Digital Tasks to Outsource
There are several technical aspects of a business that can be contracted to other companies, such as:
- Help Desk: Support call center outsourcing has a growth rate of close to 6% even though more customer interactions are moving to automation. While over 60% of customers do like interacting with chatbots, when it’s time to escalate, they want to speak to a human.
- App Development: Developing apps involves a highly specialized skill set that typically doesn’t exist in small business staff. Third-party app development companies have the necessary staff, including project managers and designers, making it one of the most outsourced functions.
- Cybersecurity: With the increased frequency and complexity of cyberattacks, over 80% of companies are planning to outsource their cybersecurity needs. Those managed service providers (MSP) have the expertise and tools to keep hackers at bay.
- Infrastructure: Cloud IT services are a nearly $1.2 trillion industry because companies are leasing and renting the equipment they used to own. Not only does it cut operational costs, but it boosts company efficiency.
If outsourcing is too much for your budget, consider using a company like Zoho which has products to streamline CRM, accounting, and help desk tasks.
Outsourcing is risky, and the way your business is formed determines the limit of your personal and business liability. Whether you’re choosing to be a limited liability company, a C-corporation, or an S-corporation, use a professional business formation service that will take care of the details. The best company formation website will not only be cheaper, but it will file the necessary papers in your state and provide you with the documents as proof.
Outsourcing Saves
As companies look to save money and streamline operations, IT BPO is an affordable option for businesses of any size. Remember, regardless of how you choose to outsource your tech tasks, you are still responsible for overseeing operations.
