Three Common Models of IT Outsourcing
With the success of IT Outsourcing, people are now just entering into offshore outsourcing contracts without giving much thought to the whole process.
One size does not fit all and you need to view and analyze your specific requirements and your internal workforce before you even decide to outsource.
Then comes the decision to find a feasible outsourcing model.
What do you essentially need? Is your current workforce insufficient to handle all the various internal tasks? Or did some customer ask you to perform a task that you can't handle in-house? Depending on such questions, you have to decide whether you want to hire full time staff, outsource a specific IT function or hire offshore providers for a particular project.
That's what we will be looking at in this article.
Firstly, let's see the need for a full time employee.
This is basically the need when you start getting more work than your current workforce can manage easily.
You need to increase your employee strength but you also realize that the increase in work load may be temporary and not long term.
Besides, hiring permanent in-house employees means increase in fixed costs like extra PCs, chairs, etc.
for all the new entrants.
And if the workload reduces in the near future, it will be difficult to layoff this extra workforce.
Contract workers are usually too expensive to afford, especially in these tough economic times.
So the best option is to hire an offshore employee like a virtual assistant who will do all sorts of administrative tasks.
But take care that you hire dedicated staff as you want the offshore workers to be focused only on your jobs, not on the jobs of multiple employers.
We can name this model personnel outsourcing, where the aim is to increase the workforce for managing additional work without hiring in-house employees.
Usually, for these types of services you don't need to hire people with highly specialized skills.
Secondly, sometimes you get clients who need a variety of services and your current workforce might not possess the necessary skills to execute all those required services perfectly.
At other times, some services are closely related to your core activities but can still be handled without much collaboration within various departments.
For example, help desk activities can be handled separately if employees have access to necessary database information within the company records.
So it makes sense to outsource this specific function to an offshore IT service provider.
This model of outsourcing, which we can classify as function outsourcing, is also feasible when a specific IT function can be handled in a better and cheaper way by offshore providers.
Finally, we have project-based outsourcing, where we outsource only specific IT projects.
Projects usually have pre-specified targets and milestones.
And the deliverable in projects can be easily defined.
Project-based outsourcing is usually done for a short period and the deal ends with successful completion of the project.
Sometimes these three models can seem overlapping but your choice would usually depend on your current skill set and requirements.
One size does not fit all and you need to view and analyze your specific requirements and your internal workforce before you even decide to outsource.
Then comes the decision to find a feasible outsourcing model.
What do you essentially need? Is your current workforce insufficient to handle all the various internal tasks? Or did some customer ask you to perform a task that you can't handle in-house? Depending on such questions, you have to decide whether you want to hire full time staff, outsource a specific IT function or hire offshore providers for a particular project.
That's what we will be looking at in this article.
Firstly, let's see the need for a full time employee.
This is basically the need when you start getting more work than your current workforce can manage easily.
You need to increase your employee strength but you also realize that the increase in work load may be temporary and not long term.
Besides, hiring permanent in-house employees means increase in fixed costs like extra PCs, chairs, etc.
for all the new entrants.
And if the workload reduces in the near future, it will be difficult to layoff this extra workforce.
Contract workers are usually too expensive to afford, especially in these tough economic times.
So the best option is to hire an offshore employee like a virtual assistant who will do all sorts of administrative tasks.
But take care that you hire dedicated staff as you want the offshore workers to be focused only on your jobs, not on the jobs of multiple employers.
We can name this model personnel outsourcing, where the aim is to increase the workforce for managing additional work without hiring in-house employees.
Usually, for these types of services you don't need to hire people with highly specialized skills.
Secondly, sometimes you get clients who need a variety of services and your current workforce might not possess the necessary skills to execute all those required services perfectly.
At other times, some services are closely related to your core activities but can still be handled without much collaboration within various departments.
For example, help desk activities can be handled separately if employees have access to necessary database information within the company records.
So it makes sense to outsource this specific function to an offshore IT service provider.
This model of outsourcing, which we can classify as function outsourcing, is also feasible when a specific IT function can be handled in a better and cheaper way by offshore providers.
Finally, we have project-based outsourcing, where we outsource only specific IT projects.
Projects usually have pre-specified targets and milestones.
And the deliverable in projects can be easily defined.
Project-based outsourcing is usually done for a short period and the deal ends with successful completion of the project.
Sometimes these three models can seem overlapping but your choice would usually depend on your current skill set and requirements.
