The many aspects of Information Technology.
From new frameworks and innovative processes to the best practices and global relationships built through IT, the basic understanding of IT was lost at some point in time and the definition became quite blurry. (Stephen Flowers 1988) defines IT as the application of computers and telecommunications to the collection, processing, storage, and dissemination of voice, graphics, text, and numerical information. IT’s flexibility to work virtually any discipline has allowed it to become the cornerstone of the 21st century.
IT Uses in Different Industries
This has led companies to create teams of highly specialized teams to fill the needs of managing the input and output of information feeds into their systems, generating a hunt for talented IT professionals to support demand. This goes hand in hand with company growth. As a company reaches certain milestones, the need to move faster is compounded exponentially and roles are expanded or newly created.
There is a suggestion that heavy IT companies and users pay greater attention to and spend more time in the roles they perform best with the technology.
This suggestion also implies that the correct implementation of IT should be focused on the reorientation implemented by the firm. Pinsonneault (1998) studied the association between IT and managerial processes to understand what exactly leads companies to struggle with the implementation of IT. The bad examples of implementation all something in common. Employees were burnt out by resisting the changes to their old but familiar practices.
Focus on Two Particular Practices
In-House Recruitment:
An internal team of talented professionals that work that tackles your IT needs. Commonly, an in-house team focuses their efforts on employee support and implementation. They take care of all the technical aspects of the organization.
IT Outsourcing:
An external team that can be located anywhere in the world. These teams are commonly deployed for more technical and talent exhaustive endeavors. It is also a cost-effective method as a company can outsource IT talent to a region with fewer costs.
The focus of Pinsonneault (1998) was to understand how the mechanisms of IT adapt to traditional managerial work. His discoveries showed us that as long IT is used for informational methods, it will always create an environment in which growth and efficiency prevail for in-house groups and teams.
Outsourcing IT
Companies are always dealing with the need to overcome tasks that are constrained by huge amount of data and short response times. The need to acquire capable hands to accommodate these high traffic functions are the driving force behind outsourcing.
IT Outsourcing is focused on companies looking for lean facilities, operations, and swift personnel to focus on other business interests.
Benefits of IT Outsourcing
Let’s talk about the benefits it brings:
- Cost Reduction
- Talent
- Flexibility
As you can already deduce, there are two main approaches to IT: in-house and outsource. Allow me to introduce a third method. Let’s say you already have your In-house IT team assembled and they are able to take on any problem that your company is currently facing. Now imagine a new project that requires the manpower of your entire IT force to tackle. You are desperately looking to integrate new talent into your team to accommodate the new project. Does this sound similar?
This is the case with many companies both small and large. Certain projects that require extra hands and talent is where outsourcing IT comes in to play and why most IT strategies are willing to annex outsourcing into standard procedures. This will give the freedom to their current teams to focus on other business interests, cost reduction and most importantly, flexibility.
What Outsourcing Models Are Best for You?
1. Offshoring
This term refers to acquiring a team or company outside the boundaries of your nation or country. Offshore tends to be an operative process that creates a leverage system for big tasks that is both cost AND time efficient for the company. This approach is extremely popular because of its potential to tap into talent in other regions, skip restrictions on national that u grounds, and reduce expenses in labor.
2. Nearshoring
The main characteristic of nearshore outsourcing lies in the location. The location in this regard is advantageous to acquire talent to help you with your outsourcing projects. The approach focuses on neighboring countries and regions. This creates an environment where speed, communication, and accuracy are far better than the traditional offshoring service. Time zone issues become a non-factor with nearshore because both the nearshore company and the company inquiring about the services will be located in the same time zone. Another pro to this kind of outsourcing is the cultural commonalities stemming from the close proximity of both companies and countries.
3. Reshoring
Hiring expenses in Asia have increased in the last couple of years, many companies are on the lookout for replacements on national grounds that can give them the same boost in personnel, while also benefiting from same time zone and work culture. Reshoring exists as an option to fight unemployment and shorten the steadily increasing costs of working offshore.
4. Staff Augmentation
Staff augmentation is considered a strategy to respond to specific business objectives. These objectives are manned with talented teams and individuals that can bring value to the end result. So this approach is highly recommended for any company executives looking for breathing room. Finally, you can give less focus to key operational activities and more focus to strategizing.
Which Outsource Types Do Different Countries Favor?
Among the many outsourcing destinations that are popular nowadays, there are several niche locations that can make the difference between the places that you take into consideration.
Canada
Our northern neighbor specializes in IT solutions and several business-related activities. As a result, they are the perfect option to begin reshoring your tech.
- Comprehensive IT services
- Business Workflow Services
Mexico
Our neighbor to the south used to be a popular destination for call centers and application development. However, Mexicans have begun to diversify their talent pool options by delivering staff augmentation and workflow services at a cost-efficient price point.
- Application Development
- Staff Augmentation
- Call Centers
- Workflows Service
*Advancio operates an office in Mexico
Brazil and Argentina
South American has become a gem when it comes to call centers and application development. This region tends to be gentle and flexible enough to understand several foreign languages, a great option for BPO customer services.
- Application development
- Call Centers
- Workflow Services
Western Europe (Ireland and Spain)
Sometimes overshadowed by Asia, Western Europe possesses great lateral thinkers that tend to adapt to the circumstances and have great response time when developing raw software. They serve as a great option for staff augmentation in software development.
- Software Development
- Call Centers
Central Europe and Eastern Europe (Russia and Hungary)
The strength of Central and Eastern Europe lies in the sturdy attention to detail. Developers here are able to tackle massive tasks and finish in time and form.
- Application Development
- Call Centers
- Workflow Services
Africa
You can discribe this region as a hidden paradise for software development and workflow services. Countries such as Morocco and Egypt are leading the charge on the northern end of the continent by leading in tech outsourcing and support functionalities.
Software Development
Workflow Outsourcing Services
*Advancio operates an office in Morocco
Israel
This small yet technologically advanced region puts an emphasis on high-quality production, research, and development. Companies outsourcing to this region may be paying a bit more, but are guaranteeing a high-quality product in return.
- High-End Software
- R&D
India
Much has been said about India in terms of outsourcing. In fact, the term outsourcing is almost synonymous with India. For the moment, we’ll say that India is the world leader in outsourcing services such as call centers, data input, and engineering services to just name a few. India has a huge, intelligent, and educated talent pool that drives the outsourcing industry.
- Application Development
- Call Centers
- Data Input
- Engineering Services
China, South Korea, and Vietnam
China, the rising star in the East is growing in almost every aspect of business and tech. The challenge of working with China is to level the cultural differences in both ideology and business practices. Like India, there is no shortage of highly educated talent here.
- Application Development
- Call Centers
- Data Input
- Engineering Services
Southeast Asia (Philippines)
The Philippines is an interesting case. They are pushing the call center and data input outsourcing activities in an aggressive and decisive aggressive matter. Southeast Asia as a whole is a great country to find call center and data entry services.
- Call Centers
- Data Input
Remember Your Macroeconomics
This may be second nature for you as the manager or executive, but nonetheless, you need to take a look at every angle possible to create a successful relationship with your vendor:
Geopolitical Risks
This is a tricky one but at the same time, also one of the best aspects of outsourcing. If for any reason your outsourcing company has any issues in their respective region due to internal problems, they will need to adapt to the situation or your company will have to take action and diversify accordingly.
Business Risks
The ease of doing business sounds simple enough, but remember that sometimes some goals are just too expensive to achieve. For example, be careful with high inflation and internal politics.
Financial Risks
It’s all about the margins. Consequently, there are financial benefits to benefit from in countries that push outsourcing policies.
Scalability Risk
This is about the ability of the country to let you grow to the level of production you are looking for.
In conclusion, outsourcing is very much a necessity for any company of any size or industry when it feels like operations are not getting any better and there needs to be a shift in the company dynamics. Your ROI becomes a reality and outsourcing is a tool that allows for better earnings, flexibility, and a different approach to daily business operations.
Indeed, IT outsourcing sounds like something you can begin doing on your own. So keep in mind that you can mix it up by hiring two to three talented in-house individuals that will fully understand and embrace your company. Then jumpstart the growth by using an IT outsourcing service. Whether it’s staff augmentation or projects, the tech trends of this day and age are pushing companies towards this route. Don’t be left behind and stay ahead of the game.
If you’ll like to know more about Outsourcing, contact us.
References
Alain Pinsonneault and Suzanne Rivard. (1998). Information Technology and the Nature of Managerial Work: From the Productivity Paradox to the Icarus Paradox?. 22/04/2018, de MIS Quarterly Sitio web: https://www.jstor.org/stable/249667
Stephen Flowers. (1988). Success in Information Processing. London: John Murray Pubs Ltd.
