Close this search box.

The Reality of IT Outsourcing in 2018


Due to several factors — the tech and IT talent gap included — many organizations have begun outsourcing their IT platforms and systems. By outsourcing various elements of IT such as cybersecurity, big data analytics and collection, or even data storage, these companies retain their limited resources and cut operating costs.

Remote technologies enable you to avoid installing, deploying and maintaining the necessary hardware, software and personnel in-house. A data center, for example, requires various server installations for collecting and storing information, the temperature control system to keep the hardware safe and protected, and various software and employee configurations to ensure it remains operational and optimized.

When that same data center is outsourced, however, the company relying on the system merely has to retain access to the remote configuration, which requires paying a subscription fee and maintaining an active internet connection. That’s about it. The requirements, as you can see, are much less, as are the costs, demands andlimitations. Where you would need to cut and sacrifice features and functionality to meet a budget, you can avoid such limitations because the hardware is not managed by you, your teams and, by proxy, your capital.

This also means outsourced systems and devices are scalable. You can scale up or down, instantly and as necessary, to meet the growing needs of your company.

In 2017, the global outsourcing market reached $88.9 billion. In 2018, it’s set to grow even more, with adoption rates also seeing a steady boost.

Why Consider Outsourcing Your IT Operations?

Alongside many benefits — such as cost savings, more efficient operations andfewer resource demands — outsourcing can provide access to highly-trained and remarkably experienced IT personnel that you wouldn’t otherwise work with. This will translate to better experiences for your customers and clients, and more streamlined systems for your internal workforce.

Of course, when looking for a potential provider, you’ll want to remain wary of the pitfalls. It is entirely possible to hire an inexperienced, inefficient and unqualified provider. Always make sure a potential partner has acquired the necessary technical certifications and has plenty of experience before entering an agreement.

  1. Emerging Tech and Operations Require Steady Growth

Due to technology’s rapid growth and evolution, organizations and administrators receive a burden to keep up. This means regularly upgrading hardware, softwareandvarious systems to meet new demands. Perhaps this isn’t such an issue for larger organizations, but it can still prove costly.

Outsourcing such IT systems and hardware use means the service provider is responsible for maintaining its operation, compatibility andperformance. They are solely responsible for upgrading equipment and systems alleviating your company or organization from such burdens. This also leaves your internal IT teams and staff free to handle more important operationsand customer related issues.

  1. Captive Centers Will Diminish

As you may know, captive centers stand as client owned and operated fulfillment and delivery centers. To eliminate costs, they are generally located in non-domestic, low-expense areas, yet still provide direct service to their organization. Even though they may be based remotely, they are still legal employees of the organization they serve, as opposed to vendors and partners they may work with.

But already, they are beginning to decline in value and engagement simply because of market trends. Companies are unable to provide viable growth and salary benefits, which can lead to poor productivity or high turnover rates.

This is true of all configurations, whether it involves physical products and goods or digital. Captive centers will soon become less enticing, with companies instead opting to outsource their operations through joint ventures. This means that IT offshore companies and service providers will become more lucrative, and in higher demand. They’ll manage the necessary benefits remotely to keep staff retention sufficient, and will have more direct control over delivery and security of processes.

In other words, it’s another avenue for IT outsourcing to become that much more necessary.

  1. Unfortunately, the IT Skill Shortage Will Only Get Worse

The increasing intensity of the IT skill shortage puts an incredible demand on organizations, especially with everything going digital and mobile in today’s market. More skilled, and more versatile IT workers and engineers will be necessary to create and maintain the kind of advanced systems organizations look for.

An emergence of key skill slots will open up including experience or knowledge inmobile development, cloud computing, machine learning and AI, specialized programming and language support, and network engineering. This means workers or IT professionals entering the space will need to be well-versed in multiple aspects of the industry, and in ever high demand.

Companies will turn to outsourced teams and partners to acquire such talent for their own operations.

Outsourcing Is Growing More Necessary by the Day

Thanks to many factors like rising operating and resource costs, access to fewer experienced and skilled IT professionals, and major security concerns, outsourcing is quickly becoming more necessary by the day. It’s not realistic to expect to handle, maintain and optimize such systems in-house, especially when it’s not your core focus. You still need to deliver quality products and service to your customers, so focusing all or most of your attention on your internal IT platforms is naturally going to take away from that.

That’s why IT outsourcing and remote technologies in general — cloud computing especially — have become so popular in recent years.

Light green canvas Freshworks and Device 42 logos with a friendly robot reflecting the news: Freshwork acquires Device42.
Hands typing on a laptop with digital icons, representing "What is Enterprise Service Management."

Explore our topics