Many companies nowadays choose to have an outsourced IT department to handle their technical needs. Most experts believe that IT outsourcing began in the 1980s, but it’s hard to pinpoint an exact date. It has been almost forty years since then and many things have been changed and made better. Outsourcing IT means companies can get lots of good things from it. This post talks about how outsourcing can be helpful for companies. We will also discuss the benefits of outsourcing, how to pick a good company to do tasks for you that are usually done in-house, the possible risks associated with it,and the steps to avoid them. If you do it cleverly, you can make a really good digital product without spending too much money.

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What is IT Outsourcing and Why is it Important?

When a business needs to make new softwares or make their current ones bigger, they can choose from two ways. One way is to have a group of IT experts that work within the company. This is a great option because the team will always be connected and involved in the company’s workings. This hiring model has a problem, the expenses. You need to pay your employees even if they’re not working on a project, give them a place to work, and spend money on teaching and growing your team.

Another option is to seek help from experts who are not part of your organization. Freelancers are less expensive, but they can’t promise that the final product will be high quality. IT Outsourcing means hiring someone else to develop, grow, or support your software instead of doing it all in-house.

Goals of Setting Up an Outsourced IT Department

  1. Working with the Best Experts and Technology

Do you want a skilled computer expert from a modern country like Japan, USA, or South Korea to work with your team? You can make it happen by outsourcing in IT. A provider will help you find an expert who knows a lot about the industry and has the right tools to build your software, no matter where they are located. When many companies offer outsourcing services, each one will try hard to find the best talent.

  1. Cost Savings

Cost Savings
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You can save money when outsourcing in different ways.

  • When you hire people from outside, you will only have to pay for the work they actually do or the number of hours they work
  • You don’t have to pay for a physical office or training programs
  • Get someone who is really good at technology from a place where they don’t charge as much as they do in the USA or Germany
  • The people you hire are likely to have the newest tools and software, so you don’t need to buy them yourself
  1. Giving Specific Tasks to Outsourcing People

Even if you have a team working for you, sometimes you may still need a freelancer’s help. These situations occur when you don’t have the right person for a particular task or when you have a really big project and your team can’t finish it on time.

  1. To Develop Faster

There are many things that can make software get delivered faster.

  • Experts can learn quickly and don’t need much training time
  • They will use modern technology
  • The developers are paid for actual work, so they want to work quickly and well

Furthermore, getting technical help from outside experts can lower the chances of problems when creating a new software or app. The experts who work on it know a lot and can give you good advice about how to make the customer’s idea happen.

Types and Models of Outsourced IT Department

If you think that hiring a different company to create and maintain your software is the best thing to do, you must now decide which way is best for you. Should you find specialists in our own country or other countries? When is it better to hire a freelancer to work with you, and when should you outsource the entire project. Let’s start discussing it.

IT Outsourcing Types

An outsourcing company can provide people from different countries to work on your project, depending on what your business needs are. Each choice has its good and bad things.

  • Offshore Outsourcing: It means hiring workers or getting work done from another country. This means hiring experts who live in a different country or far away from where the customer is. The benefit here is about money. If a specialist from Eastern Europe does the same tasks as developers from the United States, it will be much cheaper. This choice provides access to skills and technology that are not available in the customer’s own country. The biggest problems are that people are in different time zones and they might not understand each other because of cultural differences.
  • Nearshore Outsourcing: Hiring a developer from a nearby foreign country is a good way to bring in the best staff and technology for a project, without facing too many communication issues.
  • Onshore Outsourcing: It means outsourcing work to a company located within the same country as the hiring business. Onshoring is good because everyone works together at the same time and has the same way of doing things. But, it can be difficult to introduce new ideas and technologies from other countries when working with experts from the same country.

IT Outsourcing Models

Another way to categorize outsourcing is by looking at how the companies work together.

IT Outsourcing Models
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  • Team Expansion: This model means adding extra people from outside your company to your team who can help with development work. It’s a good idea to get more people to help your team if you don’t have the right experts or if you have a big project.
  • Outsourcing Projects: You give the whole project to other people to do for you. The person who offers the service has to put together a good team and manage every step of making the product. The person who hired the project manager can either work on the project themselves or check how things are going by talking to the project manager.
  • Managed services: Another method to add a few experts from outside to your team of developers. It’s not the same as hiring extra people for a team. It depends on how well the new people work with the current team. With managed services, the people you hire work on their own, but they are controlled by the provider.

When you want to hire outside developers, think about how big your project is and if you have your own team.

IT Tasks that Can be Outsourced

The benefit of outsourcing IT is you can choose which tasks to give to outside experts and which to do in-house. Check your available staff, the size and cost of the project, and its aims and targets. First, figure out which tasks you want to hire someone else to do. The types of tasks in the field of IT that are often hired out to other companies are,

  • Web and Mobile Development: Vendors manage the different steps involved in creating software. They can choose people who are good at understanding data and people who are good at making prototypes, designing, creating and supporting software. You don’t have to get the whole app all at one time. Starting with a basic version of it will help you save money and avoid mistakes.
  • Quality Assurance: People who use software want better programs, which makes those who develop them focus more on testing their technology. Outsourcing companies make sure that the product is good at every step of making it. They can make this process fast.
  • User Interface Design: If your app is easy to use and attractive, people will be happy with it and won’t use other similar apps. You can hire an outsourcing company to get the best designers who can make your project look good and easy to use.

Also, Read: Understanding The Key Components Of The UI UX Design

  • Support and Maintenance after Release: New technology creates apps that can change and grow easily. It is easier to take care of the software with the help of the experts who made it. They already have everything they need and know how the app works.
  • IT Consultation: Some companies don’t know what product they want in the future or how to make it, so they ask outsourcing service providers for help. Companies that provide services to other businesses can offer you expert suggestions and guidance.
  • DevOps: It is when software developers and IT operations work together to create and maintain high-quality software. DevOps is becoming more and more popular with people who make software and the people who pay for it. This way of working makes it easier and faster to create and use software by automating and connecting all the steps together.

Other notable IT services that are generally outsourced by companies around the world are as follows. You can outsource any of these services which are most important for your company.

  • Communications and Networking
  • Application management and support
  • Security (Online threat protection)
  • Disaster recovery
  • Infrastructure (hardware, software, network installation)
  • Data storage
  • Application development
  • Database development
  • Web development and hosting
  • Technical support
  • Help desk support
  • Telecommunications
  • Datacenter management

Benefits of Having an Outsourced IT Department

IT outsourcing is good for both small and big companies. It is really helpful for planning, and it can help you save money as well as do other things. The main advantages are:

  • Flexibility: Outsourcing makes it easier and faster to handle IT tasks and workloads that are very busy. The good news is you don’t have to pay too much money to hire a full-time worker. This is very helpful when a company only needs a certain skill for a brief amount of time.
  • Skilled Experts: Outsourcing IT services can give you access to more skilled experts and rare resources. It can be hard to find someone with the right skills to work for us all the time. It’s even harder to teach these abilities. It’s a good idea to hire someone outside your company who can give you the things you need and match your company’s skills and technology needs when necessary.
  • Focus on Company: You can make your team stronger by giving some tasks to other people outside the team. This is really important for small and medium-sized businesses that don’t have much technology help available. Instead of giving difficult tasks to employees who don’t know well, it’s better to let the experts do it so that the internal team can concentrate on important things.
  • Better Performance: When you split up the work into different sections, you can finish it faster and do better. You ask for help from people who are experts in certain things and they do the work at the same time you are doing other important things for your business.
  • Innovation and Industry Knowledge: Everyone agrees that your staff members have good knowledge about your business. Sometimes knowing too much can stop us from trying new and different ways of doing things that workers are used to. If your business is not related to computers or technology, you may be missing out on important new ideas and developments in that field.
  • Quality Equipment: You don’t have to buy expensive things that you only need a few times a year. Companies that provide IT outsourcing services handle everything to make sure you get the best IT items.
  • Dealing Risks: If you team up with technology companies that can handle everything, they will help you out if there are any problems, and they’ll protect your information. It is a good idea to add this to the agreement when you sign it.

Guide to Build an Outsourced IT Department

Outsourcing your IT department can help you make more things faster, better and for less money. To hire someone to do IT work for you, you need a good plan. The plan is important so that you can find the right person to help you. So, you believe that outsourcing is the right choice for your project. You know what kind of teamwork you want and make a list of things that you’ll have someone else do. Where should you begin? How do you make it happen? Here is a step by step guide for you.

  • Decide Your Target and Goals

Decide Your Target and Goals
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Outsourcing is often done to save money, but that’s not the only benefit. Don’t only focus on finding the cheapest supplier. When a company outsources, they can use really good technology, make things more efficient, and take less risks with growing their business. Your plans should be practical, sensible, and possible to achieve. A company that knows what it wants to outsource from the beginning has an advantage over other companies. Companies that spend time thinking about what they want to achieve by outsourcing will make better decisions about how to hire workers compared to companies that rush into outsourcing without a plan. This is because they have thought about the advantages and disadvantages of outsourcing. If a company decides what they want to achieve by outsourcing from the beginning, they can use their IT employees in the best way. This could make them work better and save money by hiring or firing more staff depending on their business or financial situation.

  • Assess Your Resources

Think about what you need and what you have available. First, look at your project and figure out which tasks your team can’t handle internally. It might not be necessary to give the whole project to someone else. You could just hire one person to design the user interface and experience. When you clearly state what you want to outsource, you can better understand what your company actually needs. Although hiring workers has its benefits, there are also problems that could make it a bad choice for a business at a certain time. Thus, outsourcing might not be the best approach for staffing. When a game or software company needs more skilled workers to make new games or programs, they can get help from staffing agencies. 

  • Delegate Tasks Clearly

Some companies are really good at writing code, while others are really good at giving advice. Before outsourcing any work, it is crucial to figure out which specific tasks you want to give to someone else. The easiest way to find skilled technology workers is to go to a trusted website that connects employers with job seekers in the tech industry. How much of your company’s IT work should be done by outside experts will depend on factors like how big your company is, how much money you can spend, how much you know about IT, and how many IT workers you already have working for you. The tasks that are most suitable for hiring someone else outside your company are:

  • Web and mobile app developers
  • Tech support experts
  • Quality assurance engineers
  • Front-end, back-end, and full-stack developers
  • DevOps engineers
  • Define Your Profile for Technology

It’s important that the company you hire for software development can work with your technology even if they are not in the same place as you. We suggest you create a list of things you need to complete your project. Remember to keep your information safe and secure because sometimes people can accidentally or intentionally share it with others.

  • Budget Expected and Unexpected Expenses

Budget Expected and Unexpected Expenses
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The market for outsourcing IT services may change in the next few years because of the economy and companies wanting to save money by using cloud computing. But, managers still need to plan for different business situations that may happen as the market grows. Companies need to think about how many workers they need and if hiring more can save money, before making a budget for one month, three months or a year. But they should also plan for unexpected events, like losing employees or needing to hire more skilled workers for a new contract. Bosses sometimes talk about hidden costs when explaining why outsourcing might not work as well as they hoped. A good IT company can help a business make sure they have the right amount of staff, make sure they have enough resources, find any extra expenses, and be able to get more or less staff quickly without spending too much money.

  • Hire a Tech Lead for Guidance

You should hire someone who is experienced in technology to help lead and guide your team. This can also lead to hiring other important team members in the future.

Companies that need help in outsourcing tasks or activities can hire an outside expert if they don’t have a clear idea of what they want to outsource. A tech lead can assist in understanding company procedures and turn them into business promises for the chosen outsourcing company. They might help choose vendors and decide to outsource work, but it’s important to define the lead’s job right from the beginning. These people can help you avoid problems with outsourcing. Outsourcing can be good, but it also has risks that we should think about. If companies hire someone who can understand and lessen these dangers, they can reduce their money problems and make their outsourcing plan work better.

  • Have Clear Expectations

Good communication within and outside the company is very important for outsourcing to work well. Everyone involved in the contract should have the same understanding about the work and outcomes. If you tell third parties what you need from outsourced services, they might be able to make your business better. This is because they are really good at helping people with their work. They understand what these contracts mean and how likely they are to work. This means that they are good at giving advice on things like laws, politics, and technology. You should also make sure that the employees in your company are being looked after. Deciding to hire someone else to do your IT project is a very important choice that affects everything in your business, including your employees and how you work. Some workers might feel unsure about positions. To avoid people talking badly about the company, it’s better to tell them what’s happening so they understand the decision.

  • Choose the Right Outsourcing Model

If you want to hire people outside of your company to work on your IT needs, human resources should think about the specific skills they need and explain why those skills are important. When they know what skills they need, managers can choose the best way to work with people outside the company. There are a few ways to outsource work, like doing it close by, in another country nearby, or really far away, and each has its own good and bad things. If a business asks for help from an experienced staffing firm to choose the best way to outsource recruitment, they can hire more people fast and easily without wasting time and money or lowering productivity.

Things to Check While Choosing the Right Outsourcing Company

There are many companies that sell IT services all over the world. Many of them have a lot of good work, great feedback from customers, and a lot of practice in building software. It’s hard to pick someone to help with technology, so choosing an IT partner is difficult. We made a guide to help you pick the best company for your IT needs.

  • Set Vendor Requirements

Choosing a supplier for remote developers depends on some rules or requirements. It is not easy to find an IT company that has everything you need. So, to begin your research and make good choices, it’s important to first know what’s most important for your situation. Do you want to have more money? Do you not know a lot about technology? Do you need to make your development process bigger? We made a list of the things that most often affect this decision. The requirements may be different for each business, so you can choose the ones that work for you.

Cost: Get price estimates from different companies and see which one is the best for you. Keep in mind, good services usually cost more money. When you try to get cheap services, you might end up switching to a different provider and paying two times the cost.

Technical skills: Knowledge and skills related to a specific field or technology. If you want to do more things and need people who are good at certain things, you should choose people based on this. Although having the best technology options is important, it is not the only factor that matters. It’s best if the people who create your software have worked in your industry before so they know what your company needs.

Experience: When picking a company to outsource work, check their past work to see if they have experience with similar projects, paying attention to the technology they used, how big the client was, and how long the project took. A company with a lot of experience is better at giving you the help you need.

Team Size: A small company with only 15-20 people cannot create really good solutions for big businesses. The company should be able to grow fast if you need it to.

Even if the company is small now, it must have the capacity to grow big as per needs.

  • Choosing the Right Location

Selecting the right location plays a big part in finding the right outsourcing company. As we mentioned earlier, communication and culture are major factors in getting the desired results and the location you select clearly influences it. Each location has its benefits and drawbacks, but some of them are already proven to be trustworthy. Companies choose different countries in the USA, Asia and Africa according to their needs. Another important factor to note is the time zone changes. If you are a company who needs to constantly communicate with the vendors on a day to day basis, then it is advisable to select a country whose time zone is nearer to yours.

  • View Reviews and Feedbacks

You can ask for customer references during your conversation, but you can also read reviews from other customers before you reach out to the vendor. Look at suggestions on social media and Google. Take a look at what customers have said about the product on the website. Lots of businesses have videos where real people talk about working with that company. It is important for employees to give their opinion about the company because it can affect the ability of the company to find new employees. If people are saying bad things about a vendor on social media, they probably don’t do well at retaining customers. Remember to check out what employees have to say about the job. If there are any problems, try to learn about them.

  • Check the Level of Communication

When you talk to the manager for the first time, you will know how much the company cares about you as a potential customer. See how much time they take to reply to your letters and if they keep the agreed time for the phone calls. See what tools they use to talk about the project. Make sure to notice how the company talks to you, how fast they answer your questions, and how much they are engaged with you. To work well with a company in another country that helps with business tasks, it’s important to speak and write English well. One more thing to think about in communication is whether you match with the other person’s culture.

Risk Management for Outsourced IT Department

Predict potential damages with effective risk management and take actions to reduce them. Here are some risks that can be dangerous and you need to be careful about them.

Control and Trust

When a company hires other companies to do work for them, they might not pay as much attention to how it’s being done. This is especially true if they choose a company in nearby countries, or far away countries. It’s difficult to monitor people who work from far away places in different time zones. HR directors can earn trust by getting to know the IT company they work with, talking to past clients, and making sure the vendor they use for outsourcing does a good job. Following these easy steps can create clear ways of communication, which helps to create a feeling of working together and trust between a business and its supplier.

Quality Issues

Sometimes when a company outsources, they might not be able to control the work as well and that can cause problems with the quality. To reduce risks, it’s important to choose suppliers who have a good history of making sure things are done well. They should have a way to fix any mistakes quickly, whether they happen where the work is being done or somewhere else. If there are problems with the quality of what they make or do, they should be able to get more people to help out.

Legal Issues

Legal Issues

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A manager who has a lot of experience can quickly find a solution for legal problems. When a company outsources work, they may have to deal with legal problems like taxes, who owns the ideas created by the outsourced team, how they treat the people working on the project, pension rules, and following laws and rules. Companies in finance who want to use outsourcing must follow the rules of the government. We should look into legal issues early on because they could affect whether we can achieve our outsourcing goals.

Information Security

Keeping sensitive information safe and secure should be an integral part of any organization. Think about all the things that could go wrong and sign the important papers with the person who is providing the service. You might need other agreements that are also regulated, in addition to the NDA. In European Union countries, companies must sign an agreement to process data as part of a law called the General Data Protection Regulation (GDPR).

Also, Read: Did You Protect Your Data Today?

Final Thoughts

The way you create an outsourced IT department depends on the type of your project and how big it is. The suggestions mentioned are the important things you should follow when hiring outside help. Do you have a good idea for a new product, but can’t make it yourself? Or do you want to make your current digital solution bigger? You can hire a group of skilled IT workers to help you out. Outsourcing is really useful in the IT industry, especially now after COVID-19. Sometimes it’s better to hire someone to do IT tasks because they can do it better, faster, and cheaper. But, getting external help with IT is not always easy and perfect. This plan has some problems that can cause trouble. We suggest you think carefully about the good and bad things that come with outsourcing before making a decision. Don’t think you can’t avoid the risks that come with having an outsourced IT department. If you choose the right outsourcing company and make a good contract, there won’t be many problems.


Can a company outsource its IT department?

It’s possible to hire someone else to do all the jobs in the IT department. Get in touch with an outsourcing company that will find and provide you with skilled professionals who have the right technology abilities and industry knowledge that you need.

What does it mean when an IT department is outsourced?

Outsourcing your IT department means hiring another company to take care of all the IT tasks for your business. Create and improve software programs, test them, implement DevOps, and to provide support and maintenance to the software after release.

What are the advantages of outsourcing your IT department?

Hiring outside experts can save your company money, give you access to new ideas and technology from all over the world, speed up the process of making software, and help your internal team by having some tasks handled by specialists from outside.