Forced to cut budgets, many organizations are turning to IT outsourcing to help reduce costs, as well as add flexibility and gain access to coveted skills and expertise.
Over the next 12-18 months, 32% of organizations plan to increase their spending on IT outsourcing, according to a recent survey of 200 IT decision makers from consulting and IT service firm Bluewolf. In addition, 48% are looking to hire IT contractors instead of full-time staff.
While many businesses are doing so to trim their tech budgets, that isn’t the only benefit. The top reasons organizations are turning to IT outsourcing, according to the survey:
- Productivity and profitability
- Flexibility, and
- Access to hard-to-find IT skills and talent.
While IT outsourcing can offer those benefits, organizations must first come up with a thoroughly planned outsourcing strategy — that means not only deciding what to outsource, but also how they should outsource.
Bluewolf outlines some of the most common IT outsourcing models. including:
- Staff augmentation, in which companies bring in IT contractors temporarily during spikes in staffing needs
- Consulting, in which the company turns over an entire project to an outside firm
- Managed services, in which the company hires an outside firm to handle entire pieces of the IT infrastructure
- Cloud computing, in which companies pay a subscription fee to use applications, hardware or other items that are housed by the service provider
- Offshoring, in which IT services are outsourced to teams in foreign countries, and
- Partial outsourcing, in which an IT function is kept mostly in-house, but certain aspects are outsourced.
Which IT outsourcing models are best will depend on an organization’s own situation, including factors such as what skills exist in-house and what IT projects the business plans to take on in the future.
As for what functions organizations plan to outsource, the most popular services among the Bluewolf survey respondents were:
- Application development (outsourced by 46% of respondents)
- Web development (39%)
- Application hosting (28%)
- Application maintenance (26%)
- Data center operations (23%)
- Disaster recovery (17%)
- Database administration (17%)
- Network operations (16%)
- IT security (15%), and
- Help desk (12%).
Read our earlier post on IT outsourcing for more help in developing your organization’s outsourcing strategy.