Know When to Outsource Your Small Business

Any business ranging from small to medium size widely uses the concept of outsourcing. They

delegate a specific project, task, or service to a third-party provider whom they collaborate with

agreeing on the mutual terms of the agreement. Assigning tech support, customer help desk

functions, and on-site maintenance are generally taken care by the Outsourcing Partner. According

to IT Management, many companies turn to IT outsourcing for access to otherwise unavailable

resources: staff capabilities, hardware or infrastructure access, or other capabilities.

Outsourcing clients are increasingly

looking for more vertical expertise

from their suppliers. The vertical

integration among infrastructure,

applications and operations will

ensure efficiency, accountability

and alignment between business

strategies and enabling services.

It is because of the new emerging

technologies like cloud computing

that the service provides are now

willing to offer more outcome

based pricing instead of simply

equating full time equivalents with more work. The keen interest areas of the clients are now getting

associated with fully Managed Service Providers for their fully managed services or variations of the

same with outcome based service level agreements.

It is expected that there will be more proactive role played by the procurement organizations in

purchasing decisions, vendor selection and other activities.This in turn will lead to renegotiations of

IT service deals to a lager extent.

Managed Services remains an area of interest for both the buyers and the suppliers. Though this has

multiple advantages for the industry, there are also few of the challenges associated with it like

setup complexity, volume uncertainty, impact on different IT functions and organizational change

requirements. Buyers also need to cope up with the risks associated while shifting to managed

services such as potential cost escalations in situations where volume is uncertain and demands

trends are unknown.

Companies are now seeking different solutions as labour arbitrage is getting fully matured. With the

shift of industry to outsourcing, providers are experimenting with new models like risk shared

partnerships and industry specific AO solutions. For offshore suppliers it has led to a crisis of genre in

Infrastructure Outsourcing. On their maturity when it reaches critical size, they tend to go after the

same clients as the multinational suppliers. And this in turn leads them shifting towards the

traditional rules of Infrastructure Outsourcing and hence, deviates from the innovation they brought

to the outsourcing market.

As per a research it is inferred that huge percentage to IT resources prefer bringing their own PCs to

work and this trend grew many folds in the coming years with the advent of laptops, smartphones

and tablets.Increasingly, its predicted that organizations will provide a 'digital allowance'-a subsidy

that enables participating employees to purchase their own productivity devices for business use.

Outsourcing partners will need to manage the allowances and support different types of devices.

Service Providers are in general responsible for the efficiency and cost reduction for the client’s

business. With time now the clients demands has changed and increasingly they are asking their

partners/ Service Providers to also identify the inefficiencies within their internal environment that is

contributing towards high costs and ways to address to these inefficiencies. Now the Service

Providers are given more leverage in order to analyse the client’s operational flow and find savings

and improvement opportunities.

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