According to the research, the global IT outsourcing market size was estimated at USD 245.91 billion in 2021 and is expected to reach USD 261.9 billion in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030. In recent years, outsourcing has gained recognition among businesses of all types and in multiple industries. Tech giants like Google, Facebook, and IBM as well as manufacturers like Nike and Coca-Cola outsource part of their business operations connected with IT to dedicated offshore teams.
Benefits and Drivers of Outsourcing
- Deloitte
What Is IT Outsourcing?
IT outsourcing is the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes.
Why Companies Oursource
One of the reasons why companies outsource their IT tasks is to get access to additional IT specialists with the experience and expertise needed. Finding them can be a challenging task for most businesses. The demand for highly qualified specialists experienced in complex technology has increased significantly in our country. As the demand is higher than the supply, the available specialists have increased their labour/service prices significantly too.
Covid-19 Impact
Even before Covid-19, constant spending growth on outsourcing IT services was observed as well, but the global pandemic led to rapid increases and cost saving became one of the major factors in outsourcing.
IT budgets
Even before Covid-19, constant spending growth on outsourcing IT services was observed as well, but the global pandemic led to rapid increases and cost saving became one of the major factors in outsourcing.
According to Deloitte, 70% of businesses have turned to an outsourcing partner for cost reduction in 2020. And the Outsource Accelerator suggests that labor costs themselves can be reduced by at least 70%.
However, cost isn’t the only factor. 49% of companies state that freeing up resources to focus on core tasks is one of the leading benefits of outsourcing.
Benefits of IT Outsourcing
There are many proven advantages of IT outsourcing that our partner companies can benefit from. Here are just some of them.
1. Cost Advantages
It is one of the most obvious benefits that outsourcing can bring. Business is about making money, and the lower operational costs are, the more companies will be able to invest in their future development.
Costs are saved thanks to the optimization of the following things.
2. Increased Efficiency & Innovation
Outsourcing brings more additional resources into the project which results in faster work and, thanks to the introduction of effective practices and skills, increased efficiency of the team.
3. Access to Skilled Resources & Staffing Flexibility
As was mentioned and proved, the demand for skilled IT specialists will grow. Fast. IT outsourcing is an option to get access to trained and experienced staff the moment the business needs them (especially for companies that have seasonal or cyclical demands).
4. Internal Staff Education
One of the reasons for using our NTP's outsource staff might be that the in-house team doesn’t have the required knowledge and/or skills. Outsourcing (especially on-site) may result in improving in-house team qualification thanks to knowledge sharing and mentoring by IT company specialists.
5. Focus on Core Activities
Working with our outsourced staff allows business owners to focus their activities on strategic things – planning, research, brand building, sales and marketing, business processes optimization, etc. Outsourcing also enables business owners to plan and execute more effective projects or, vice versa, experiment and find new and unusual solutions.
6. Operational Costs Control
We are responsible for keeping control over the time & budget of the project (especially if it is project-based cooperation).
7. Continuity and Risk Management
By ensuring continuity, NTP reduces the risk of employee turnover for its customers. Also, one key factor in any business is risk assessment and analysis. IT experts will plan and mitigate potential risks.
8. Project Management Simplification
The success of the project depends a lot on the quality of project management and on how well business owners can organize the cooperation of the team. Outsourcing on a project-based model already includes project management.
9. Work Relationships Simplification
Working with NTP is governed by an official agreement that makes the entire collaboration simpler and less risky.