Cloud computing has introduced new possibilities for businesses and individuals alike. The benefits of IT systems are clear, but the degree to which those benefits would manifest has been a revelation in business. And now, with superior connectivity and cloud computing technologies, IT outsourcing has increased the potential of IT systems in business even more.
But what does outsourcing software services mean?
Outsourcing is not a new concept, and the premise remains unchanged in the realm of IT services. What sets this industry apart from others is the level of integration and functionality that software as a service (SaaS) can provide.
Cloud computing allows a company to offer various services—through their website or a mobile app—that can be offered by a third-party service provider and be indistinguishable from a service provided in-house. Of course, branded outsourcing is also not new, but the main benefit rests on the service provider’s end of the transaction.
Think about a logistics firm outsourcing its deliveries. To provide a branded service that customers would not be able to distinguish from an in-house service, the company providing the outsourced services would need branded vans, uniforms, codes of conduct, and more. For a company providing software as a service, they can essentially create one product with branding options.
This simplicity trickles down to the clients using these services. The service provider can offer its services much cheaper than it would with traditional business models. The provider can also put more time into improving the product.
Improvements that all of the service provider’s customers will immediately benefit from!
Types of IT Outsourcing
IT outsourcing services can come in many forms. Below you will find some of the main categories:
The most visible form of outsourcing in IT is cloud computing or software as a service. Cloud computing services are offered from a remote location accessed over the internet (or other networks) rather than using locally-deployed equivalents installed on the user’s machine.
Managed services fall more in line with the traditional model of outsourcing. Businesses contract external service providers to handle IP telephony, networking, monitoring services, and more.
Nearshore outsourcing involves outsourcing IT-related work to a business in a neighboring country (one that shares a border with your own country). This type of outsourcing makes things like communication easier.
As the name implies, domestic outsourcing relates to service providers in the same country, which benefits from not having language, cultural, or geographical barriers between the two companies.
Offshore outsourcing involves companies in foreign countries, typically in Asia. Using services in countries like India and China allows a business to benefit from lower-cost labor and beneficial exchange rates, but at the cost of language barriers, cultural differences, and the other country being in a different timezone.
IT Outsourcing has enabled countless businesses to expand while offering better services than they could have using in-house solutions. As relevant technologies continue to improve, the advantages of outsourcing are only going to increase.