IT outsourcing – subcontract IT services or implement them in-house?

Nowadays, IT technologies permeate almost all industries and business areas. Therefore, they are of key importance to most companies. However, maintaining the IT infrastructure in-house takes time and effort. This problem can be easily solved by hiring an external company that would take over some processes. Read in what areas and when it is worth choosing IT outsourcing.

IT outsourcing – what is it? 

The primary goals of IT outsourcing are: to improve the efficiency and security of an IT environment and to reduce the costs

Outsourcing is a company management strategy consisting of transferring part of the business or individual tasks to external suppliers.

In the case of IT outsourcing, this means moving services and projects to a professional IT company. It eliminates the need to create your own IT structure. Outsourcing is mainly used by organisations outside the IT industry that need IT infrastructure.

IT infrastructure is inherent in every activity, but its purchase and maintenance involve the employment of high-class specialists and investment in hardware and software. An in-house IT department may be unprofitable, mainly for small and medium-sized enterprises. 

Instead of hiring IT specialists and buying servers, computers and applications, it seems more advantageous to rely on specialised external suppliers. The resources thus freed up can be concentrated on the main area of a company's activity, which can directly translate into its business success.

What IT services can be outsourced? 

1. Basic administration (IT support) 

• IT system implementation – It includes advice on purchasing computer hardware and software, their delivery and installation; also: a supervision over the efficient, failure-free system implementation. 
• IT infrastructure management – It includes a comprehensive management of the IT infrastructure in a given company, often combined with system monitoring and data archiving (necessary to restore the correct operation after a system failure). It involves developing and implementing a backup policy, managing the operating system and optimising the function of security measures.
• HelpDesk/ServiceDesk – Professional HelpDesk offers IT support and quick response to problems related to company hardware and software. While the HelpDesk is used to quickly respond to uncomplicated events using ready-made solutions to the most common issues, the ServiceDesk primarily creates databases of these events.
• Information security and personal data processing – The purpose of this service is to minimise the risk, particularly data loss or theft. Information security management and personal data protection are carried out by defining and implementing security standards as well as attitudes and behaviours in the organisation.
• Cloud hosting and services – IT services based on cloud computing have an advantage over services offered based on traditional IT infrastructure because they allow organisations, among others, to increase the flexibility and efficiency of key business processes while reducing the costs of operating the IT environment. 

2. Development of dedicated software

Every off-the-shelf tool and quick solution are good for the moment, but they can fail if the company wants to expand its services or integrate the software with other solutions. It can be avoided by building custom-written software. 

Custom-written software means tailoring it perfectly not only to the business needs of a given organisation but also fully optimising it in terms of technological and hardware requirements.

As a result, it is a perfectly tailored and long-term investment, guaranteeing a lower risk of error and failure. It is also much safer than frequently used off-the-shelf solutions whose providers handle vast amounts of data from different clients, being at risk of data leaks.

Benefits of dedicated software:

• high quality of the system, as it is thoroughly tested before being released to end users; 
• more predictable cost, unlike the variable prices of ready-made solutions, which may change from year to year or after major changes; 
• supporting the company's operation thanks to perfectly tailored solutions; 
• improving a competitive advantage, as no other company has access to the same tool.

3. Development of AI (artificial intelligence) software

In the case of the dedicated software described above, many companies have a dilemma regarding sharing their data with an external company. The data is necessary to create a well-functioning system, but there are concerns about how the data could be used in the future (e.g. to create a similar solution for the competition).

In the case of AI-based software, this dilemma does not arise because the data used to train models is gathered and analysed by the created system, not people. That means that this data cannot be used in the future in a way undesirable by its owner. So, how does the AI software work?

The typical process of AI-based software work:

1. Data collection – gathering data from various sources, databases, or online interactions;
2. Data pre-processing – preparing the data for analysis, like removing duplicates or filling in missing values;
3. Training – using the prepared data to train an AI model that can recognise patterns and make predictions based on the input data;
4. Testing and evaluation – testing trained model on new data to evaluate its performance;
5. Deployment – deploying the created system in production and using it to make predictions in real-time based on incoming data;
6. Feedback loop – continuously collecting feedback on the model's performance and updating the model to improve its accuracy.

As you can see, the process of AI software building does not end after the system deployment. The key characteristic of AI-powered systems is their possible never-ending feedback loop. So it is much easier and more profitable in the long run to subcontract this kind of project to an external company experienced in training and maintaining AI models.

How much does IT outsourcing cost? 

Entrepreneurs often turn to IT outsourcing for an evident reason: savings. And although technological support for business by high-class experts and IT specialists has its cost, it seems more profitable than doing it on your own.

IT outsourcing can cut the costs generated by:

• the need to build your own IT department; 
• hiring IT employees on a full-time basis and tax burdens, ZUS, etc.; 
• paying employees, also for time in-between the projects; 
• accounting and HR settlements; 
• costly recruiting process.

It's also worth calculating the rest of the costs related to the company's size, such as:

• rental of premises and related rent and utilities payments; 
• office equipment and devices' maintenance;
• using new technologies – like licences for programs and applications.

By investing in IT outsourcing, you can adjust it to the organisation's individual needs. You can pay for specific services, the whole day's work, or only when you cannot handle selected processes. This freedom of choice leads to a lot of savings. 

IT outsourcing – why you should do it

IT is one of the most complex industries. Often, a company outside the industry does not have sufficient technical knowledge to introduce an unknown or emerging technology. Therefore, it cannot administer and service what it does not understand. 

IT outsourcing allows you to divide your IT needs into small parts and allocate them to one or more suppliers. Such a selective approach seems beneficial, especially for smaller and short-term projects. There is no need to hire specialists for short contracts and then fire them. 

The key factors in favor of outsourcing:

• predictability and cost reduction;
• availability of IT systems when resigning from investing in newer hardware, software and updates;
• increase in efficiency and effectiveness of the IT environment, e.g. thanks to the standardisation of IT procedures and processes; 
• reducing the risk of failure and quick response time of the supplier when it occurs – often thanks to 24/7 infrastructure monitoring; 
• shortening the time to market products; 
• providing IT services in a hybrid mode or – increasingly – online; 
• increasing the productivity of own employees; 
• focusing on vital areas of the company's business activity. 

IT outsourcing – summary

Companies that decide to outsource should first of all define their approach to outsourcing. Is it supposed to be a long-term cooperation, in which the external company becomes a trusted partner or the implementation of short projects? In other words – whether business continuity or fast service delivery counts. 

When deciding on IT outsourcing, it is worth ensuring that the team consists of specialists experienced in a given field. In addition, their representatives should demonstrate an understanding of the needs of your company and the requirements of the recipients of a given project. 

We invite you to contact WEBSENSA representatives if you are looking for a technologically experienced business partner. Our primary domain is developing AI-based solutions, perfectly tailored to our clients' needs. You can read about a few of our projects here: 6 examples of bespoke software to boost your company’s efficiency.