What You Need to Know About Outsourcing of IT Services
According to the most recent studyperformed by Duke University, Fortune 500 companies were overwhelmingly satisfied with outsourcing operations. As a matter of fact, 72 percent of respondents said that business process outsourcing (BPO) has helped their organizations in exceeding expected savings.
Outsourcing: A Closer Look
BPOis utilized to streamline workplace processes. It reached the business mainstream during the ‘90s and subsequently became a popular strategy among organizations wanting to minimize costs associated in hiring employees, management oversight, health insurance, employment taxes, and retirement plans.
There are several reasons why organizations outsource business tasks. Basically, it allows external and/or third-party providers to hire and manage "own" personnel to lessen management worries while increasing productivity. Moreover, it promotes better market position while maintaining quality and effective service. Besides focusing on core competencies, most organizations also resort to getting services from other firms to enjoya number of benefits, including:
The Future of IT Service Outsourcing
Besides customer support, healthcare services, accounting, and data entry, IT service isalso one of the most outsourced processes. According to Gartner, an IT research and advisory company, the worldwide IT outsourcing market value has recently reached $288 billion. Moreover, it projects a 5.4 percent compoundedannual growth rate (CAGR) in the global outsourcing market through 2017.
Apart from minimizing expenditure costs, outsourcing IT-relatedactivities also provides a wide range of benefits particularly for growing businesses. These include:
Each organization has different goal in outsourcing IT functions.Whether it is to increase efficiency, improve system reliability, and/or enhance level of support to end users, every company primarily aims to provide quality service and achieve or sustain business success. Indeed, outsourcing hassignificantly changed the business landscape through effective implementation of strategies, controlled expenses, and focused core operations.
Outsourcing: A Closer Look
BPOis utilized to streamline workplace processes. It reached the business mainstream during the ‘90s and subsequently became a popular strategy among organizations wanting to minimize costs associated in hiring employees, management oversight, health insurance, employment taxes, and retirement plans.
There are several reasons why organizations outsource business tasks. Basically, it allows external and/or third-party providers to hire and manage "own" personnel to lessen management worries while increasing productivity. Moreover, it promotes better market position while maintaining quality and effective service. Besides focusing on core competencies, most organizations also resort to getting services from other firms to enjoya number of benefits, including:
- Lower overheadexpenses- Organizations may reduce overhead cost or operating expense such as office space, salaries, and other benefits by hiring third party service provider. Instead of moving into larger facility, they may hire full-time employees "from the outside" for marketing, IT, as well as research and development functions.
- Greater efficiency- Companies that perform several in-house tasks such as payroll processing, marketing, and research and development pay higher distribution expenses. Therefore, outsourcing some of these activities would be an advantage to gain long-term capital investment.
- Increased human resources- Outsourcing strategically improves quality and flexibility of workforce by hiring qualified staff to perform business tasks, design compensation plans, and/or review training and development programs.
- Flexibility in staffing- Organizations may tap outsourcing companies for a certain period of time as deemed necessary.
- Reduced risks- Outsourcing companies are capable of anticipating and managing business risks. In fact, third-party service providers can develop solutions to ensure quality service and sustain business success.
The Future of IT Service Outsourcing
Besides customer support, healthcare services, accounting, and data entry, IT service isalso one of the most outsourced processes. According to Gartner, an IT research and advisory company, the worldwide IT outsourcing market value has recently reached $288 billion. Moreover, it projects a 5.4 percent compoundedannual growth rate (CAGR) in the global outsourcing market through 2017.
Apart from minimizing expenditure costs, outsourcing IT-relatedactivities also provides a wide range of benefits particularly for growing businesses. These include:
- Increased efficiency
- Improved level of support offered to end users
- Reduced operating costs
- Reduced time to respond to desktop problems
- Improved system reliability
Each organization has different goal in outsourcing IT functions.Whether it is to increase efficiency, improve system reliability, and/or enhance level of support to end users, every company primarily aims to provide quality service and achieve or sustain business success. Indeed, outsourcing hassignificantly changed the business landscape through effective implementation of strategies, controlled expenses, and focused core operations.
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