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Outsourcing IT: Boon or Bane

Outsourcing has emerged as one of the frequently adopted practices across the globe. However, it has some major consequences too that have been witnessed in the past.

In this article at CIO, Laurie Clarke suggests that the public sector has been noticing some of the high-profile incidents of disastrous outsourcing initiatives. She further explains the reasons and situations when outsourcing will be the best option for IT firms.

Fact Sheet

Last year, the value of outsourcing contracts raised by 9 percent to top £4.9 billion and IT made up 73 percent of the total outsourcing market. In fact, the amount spent on outsourcing the resources in 2017 was double the amount spent in the year 2016, as per a report in Financial Times.

Certainly, according to the 2018 CIO 100 stats, about 75 percent of CIOs aims for either increasing the headcount or are planning to improve skilled manpower within their organizations to drive IT and digital transformation initiatives.

If a company should focus on outsourcing or developing skills in-house is a matter of context, situation, organizational ability, sector and various other factors. Let’s focus on why and when outsourcing will be appropriate:

The Flip Side

One of the major reasons for outsourcing is seamless access to the ‘pool of talent’. Location limits the availability of talent while outsourcing open avenues. This is the biggest hindrance for organizations located in small towns or rural areas, where eligible candidates are not as exposed in the bigger cities.

Similarly, companies based in cities where IT industry lacks presence may also take benefit of outsourcing. With the fast emergence of remote or distributed teamwork, organizations are open to hiring people from all across the globe.

Another major reason for outsourcing is monetary benefit. Organizations pay less money and employee benefits to the outsourced resources in comparison with the in-house regular employees. This also means that they do not have to invest in training the outsourced resources which is another way of cost saving.

Startups or new organizations may invest this money in their core product without training in-house teams for different areas. The author believes that taking an outsourced resource involves exerted granular control over operations, beforehand scheduling, and clear communication. But the risk is the second name of the business. So, everything is easy if done with the right approach and precision. Click on the following link to read the original article: https://www.cio.co.uk/it-leadership/why-should-you-outsource-work-3682460/

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