IT outsourcing is the practice of using external service providers to take care of all or some of your organization’s IT functions. The contracted IT outsourcing provider may create your IT strategy, deploy applications or tools, manage infrastructure, or provide maintenance and support. Most organizations choose to outsource their information technology needs in order to control costs, quickly implement new technology, increase competitiveness, reduce risks, and capitalize highly trained and experienced IT engineers at a fraction of the cost of setting up an in-house team.
The volume of outsourced IT work has increased steadily over the last 20 years. Even with the COVID-19 pandemic, the percentage of IT budget spent on outsourcing increased from 12.7% to 13.6% between 2019 and 2020. Furthermore, the global IT outsourcing market is projected to grow from $92.5 billion in 2019 to $397.6 billion in 2025. In 2021 alone, up to 83% of IT leaders are planning to outsource their security to a managed service provider. These trends will become even more dominant over the coming years as more organizations turn to outsourcing in order to ensure security and compliance, as well as increase efficiency within costs.
Selecting the right IT outsourcing provider is important for your externalization plan to work. Below are a few practical tips to find the right outsourcing contractor in Singapore and beyond.
1. Define a clear scope of work
The first step towards choosing the right IT outsourcing provider is to create a detailed scope of work documents. You want to clearly outline your business’s requirements, goals, and envisioned solutions. Nobody understands your business as well as you do. Coming up with a list of vague requirements and then selecting an outsourcing contractor based on that is a clear recipe for failure. You need to be super specific so you can vet potential providers based on your organization’s precise IT needs.
2. Select a preferred outsourcing model
IT outsourcing is not a one-size-fits-all plug-and-play affair. You need to determine what outsourcing model works best for your company based on factors such as distance and client-provider relationship. Options include onsite outsourcing, onshore outsourcing, nearshore outsourcing, and multisource outsourcing. Take into account factors such as immigration rules, time zone difference, ease of communication via video link, and round-the-clock availability when selecting the preferred provider location. Organizations may also evaluate providers based on relationship-based models that describe the balance of responsibility and ownership between the client and contractor. Examples of such models include staff augmentation model, dedicated team model, and project-based model.
3. Go for expertise
It goes without saying that a provider’s expertise level is a major consideration when evaluating IT outsourcing providers. Create a shortlist of third-party providers based on skill sets, technical expertise, passion for your project, access to the latest tools and tech, and experience solving diverse real-world challenges. You want to settle on an outsourcing provider who already has proven experience and expertise in the same software technologies your project needs to be based on.
4. Look for market reputation
A good outsourcing contractor should have a great work ethic, and be able to communicate efficiently and deliver projects as promised. Nobody wants to entrust their IT functions to a company that often misses deadlines or miscommunicates core facets of the project execution. Make sure to turn to the internet and read reviews from clients. If you can’t find much information on online reviews platforms, you may ask to be connected to some of the outsourcing provider’s past clients so you can hear their first-hand reviews.
5. Prioritize protection of data and IP
For most business leaders, privacy and security are two of the biggest concerns in today’s interconnected, digital world. Cybercrime breaches exposed more than 4 billion records in the first half of 2019. The most common causes of a data breach include weak and stolen credentials, back doors and application vulnerabilities, malware, too many permissions, social engineering, and insider threats. More and more countries are passing laws that require companies to comply with the highest standards of security so as to protect customers’ private data. Examples include the European Union’s General Data Protection Regulation (GDPR), the Payment Card Industry Data Security Standard (PCI DSS), the Health Insurance Portability and Accountability Act (HIPAA) for healthcare businesses, and Federal Information Security Management Act (FISMA). You should consider working with vendors who have robust security mechanisms in place.
6. Select a flexible partner
Flexibility is another crucial factor to put into consideration when selecting an outsourcing provider. You need to work with a third-party provider who is flexible enough to adapt to dynamic requirements or urgent problems. This is more so important when you are working with an outsourcing partner from another country or time zone. Keep in mind that any disruptions that affect your service delivery will need to be addressed in a timely manner. Check your shortlisted provider’s SLA (Service Level Agreement) to get an impression of what you can expect from them.
7. Agree on the budget
No matter how well-suited a specific IT outsourcing provider appears to be, they may not be the right fit for you if their cost is clearly out of reach. One of the key reasons why most small and medium businesses turn to outsourcing is so as to reduce operational costs and level the playing field (so as to compete with established competitors). You need to figure out how much money you are willing to invest in your outsourced IT project before you even start deliberations with the desired partner.
8. Resources and technology
The right outsourcing partner should have the tools and technology required to meet your specific requirements. Pay attention to the software technologies and tools that the outsourcing provider uses. Are they mobile-ready and easily accessible? Do they help create applications and solutions that meet the latest industry standards? These are just a few of the questions you should ask. You’ll also want to find out how the company keeps up with changes in technology that might impact your business.
Accrets International engineers offer a diverse range of outsourced IT services. These include enterprise hosting services, enterprise cloud computing, cloud infrastructure as a service, managed IT services, IT disaster recovery as a service, enterprise applications (e.g. SAP Business One and Microsoft Premier Support), and digital transformation. We bring market-leading expertise to your organization and free your team to focus on what they do best.