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Fast Return on Your Investment – IT Outsourcing
Harkiratjit Singh
IT outsourcing occurs when a business organization contacts another organization to get an IT function performed rather than performing itself. IT outsourcing has grown in popularity as an efficient, cost-effective and expert solution designed to beat the challenges of systems implementation, maintenance, security and operations. Nowadays, organizations intend to opt for offshore IT outsourcing so as to curtail costs and related taxes and maximize gains backed by quality services.
There is a list of some tips for successful outsourcing:
Defining the objectives
Outsourcing for the right reasons
Answering some key questions concerned with core competencies, cross-functional impact etc
Using a methodical approach involving planning phase, analysis phase, design phase, implementation phase, operations phase and termination phase
Considering all stakeholders
Getting the right people involved
Understanding the vendors
Choosing the right relationship
Negotiating a sound contract
Using performance incentives and penalties
Establishing a relationship management structure and processes as part of the contract
Using objective performance criteria
Emphasizing on the development of the people involved in relationship management
Managing the issues related to people
Outsourcing IT is a big bonus to booming business organizations. This cost-effective technique renders a list of benefits that can be classified into three broad categories enumerated as below:
Operational Benefits
Performance reports and measurements are made available to buyer organization by the supplier firm.
Round-the-clock support at a fraction of the cost is made available to the clients.
Service level agreements (SLAs) are established by the supplier firm.
Service quality is greatly enhanced.
Gaps due to attrition or economic downturns are avoided and overall staffing levels are adapted as per the clients requirements.
IT professionals are fully trained on the latest technologies.
Scalable solutions rendered by supplier firm support mergers and acquisitions.
Start-up time on entering the new market is tremendously minimized by outsourcing solutions.
Service provider companies also take the management of non-essential core functions.
Technological Benefits
Service provider companies keep a track of latest and advanced technologies thereby gaining access to IT expertise, which in turn renders scalable and robust IT solutions to the clients.
Service provider companies use established standards of equipment and software requirements, thereby saving a considerable proportion of time and money.
Service provider companies also make use of approved lists of reliable vendors, thereby promising excellent quality of goods and services.
Financial Benefits
Billable hours are accounted for and hence IT cost is made visible by the service provider firm.
Utilization of the extensive knowledge base of IT professionals of the service provider firm results in remarkable cost reduction.
Outsourcing solutions significantly limit the required capital investment thereby channelizing the available financial resources for more purposeful and strategic activities.
To conclude, it would be apt to say that in todays business environment outsourcing IT is quite an attractive option and forms an integral part of an organizations overall business strategy. The rationale behind pursuing this remarkable technology involves its multiple benefits. A well-chalked out strategy, due heed in service provider selection, conscientiously drafted contract and good monitoring of the outsourcing IT services delivered will assist the organization in reaping the profits it expects.
Article submitted Tuesday, July 15, 2008
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