Blog/Outsourcing

13 Benefits of IT Outsourcing for Small Businesses

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Toluwani Folayan

May 08, 2023

As a small business owner, you most likely always seek ways to cut costs and increase efficiency. However, have you given any thought to outsourcing your IT needs? We imagine that, like many other business owners, you might doubt the advantages of outsourcing your IT.

Perhaps you have concerns about the price, the loss of technology control, or the level of service you will get from a third-party company.

Although it is understandable to have reservations and misgivings, the reality is that IT outsourcing can be a game-changer for small businesses seeking to survive and prosper in the current digital environment. In fact, there are many advantages to outsourcing your IT needs, including time, money, and resource savings, as well as access to a team of professionals with specialised training which we will discuss in this well-detailed guide.

Whether you have trouble managing your IT demands internally or searching for strategies to scale your business, this article will explain why IT outsourcing is an excellent choice to consider as a beneficial investment in your firm's future.

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Outline

What is IT Outsourcing?

Benefits of IT Outsourcing for Small Businesses

Limitations of IT Outsourcing

What is IT Outsourcing?

IT outsourcing is a business approach in which a firm contracts a third-party organisation or person to manage specific areas of its technological wants and needs.

This could apply to solutions like software development, help desk assistance, infrastructure, network upkeep, or data centre management. By outsourcing these duties, companies can cut expenses, gain access to advanced expertise, and concentrate on their primary business operations.

IT outsourcing is gaining popularity as technology develops, enabling businesses to access global talent pools and maintain competitiveness in the digital era.

Do you want to learn everything about IT outsourcing and how it can instantly transform your business? Then, read this article on What is IT Outsourcing?

Benefits of IT Outsourcing for Small Businesses

1. Lower Costs

2. More Emphasis on your business growth

3. Access to the latest technology

4. Specialised expertise

5. Risk mitigation

6. Excellent compliance with regulations

7. Scalability

8. Better customer service

9. Enhanced Security

10. Increased Efficiency

11. Get a competitive advantage

12. Worldwide talent at your disposal

13. Cut back on labour expenses

1. Lower Costs

Saving money is one of the biggest benefits of outsourcing IT services. You can avoid hiring full-time staff to handle your technological demands by outsourcing your IT services. In addition, in-house IT personnel salaries, benefits, and other overhead expenses can be significantly reduced as a result.

Estimates for the cost reduction range from 20% to 30%, and up to 59% of all enterprises outsource explicitly to save costs. It frequently also provides:

The extra advantages of predictable monthly costs.
No long-term commitments.
Cost savings on hardware purchases.

2. More Emphasis on your business growth

You can concentrate on essential business growth objectives and improving customer service by outsourcing some or all of your IT requirements.

By doing this, you can ensure that every investment dollar is used as efficiently as possible rather than wasting valuable resources on areas like IT. This benefit of IT outsourcing is significant for small businesses that want to expand.

3. Access to the latest technology

By outsourcing your IT services, you can get the most recent technologies and knowledge without spending money on costly equipment, software, and training. This can offer you a competitive advantage and enable you to keep up with the most recent business trends.

4. Specialised expertise

Small firms frequently lack the funding to employ full-time IT personnel with specialised knowledge in all technology fields. However, small businesses can access a team of professionals with various skills and experience by outsourcing IT services.

For instance, your vendor can give tailored solutions to your unique demands, whether you require cloud computing, cybersecurity, or network management assistance.

5. Risk mitigation

Small businesses are increasingly concerned about issues related to cybersecurity. However, by using the most recent security protocols and guaranteeing that your data is safe and secure, outsourcing your IT services to a reliable supplier can help you reduce these risks.

6. Excellent compliance with regulations

Depending on your sector, you may be required to comply with specific rules and laws. However, you can verify that you comply with these laws and prevent excessive fines and penalties by outsourcing your IT services to a reliable vendor.

For instance, your supplier can assist you in putting the necessary security precautions in place to satisfy compliance standards like HIPAA or PCI-DSS.

7. Scalability

Your business will need different technology as it expands. Hence, IT outsourcing is the perfect solution to this. For instance, you can simply grow your IT solutions to meet your changing needs by outsourcing your IT services, hereby eliminating spending money on pricy hardware, software, and training.

Also, you can increase your flexibility by outsourcing your IT services. For example, you can respond to changes in the market and modify your technology solutions if you have a team of professionals managing your technology requirements.

8. Better Customer Service

You can enhance customer service by outsourcing your IT needs for quicker response times and improved client interaction.

For example, if you experience a technical issue, your provider can immediately evaluate the issue and offer a solution, helping you avoid downtime and maintain customer satisfaction.

9. Enhanced Security

Small businesses are increasingly concerned about cybersecurity threats, and staying current with new security processes and technologies can be tricky. However, you can gain access to a team of professionals that can assist you in reducing security risks and make sure your data is safe and secure by outsourcing your IT services. For instance, your supplier can add firewalls, antivirus programs, and data backup systems to safeguard your company from security threats and data breaches.

10. Increased Efficiency

You can improve productivity by streamlining your technological processes and decreasing downtime by outsourcing your IT services. For instance, by monitoring your systems around the clock, your provider can see problems early on and fix them before they become serious. Additionally, your provider can assist you in optimising your technological solutions to increase performance and decrease task completion times.

11. Get a competitive advantage

Small businesses that outsource can outperform their competitors. This is because companies can keep a smaller core of personnel while having access to resources across the nation (or the world) that enable them to compete more effectively in the market by providing more services at a lower cost.

12. Worldwide talent at your disposal

As businesses ramp up their recruiting efforts to fill workforce shortages, the market for skilled labour is competitive. This challenge is causing problems for both new and established enterprises. However, IT Outsourcing can be crucial in filling this hole, especially in the short term, as scaling up is now exceedingly challenging.

For example, you can use businesses and independent contractors worldwide who specialise in the talents you need instead of recruiting employees to move to you.

13. Cut back on labour expenses

The most remarkable expense for a large number of firms is labour. For instance, the total compensation cost, which includes training, health care, travel, and other amenities, is not included in the weekly paycheck because salaries are continuously escalating. In addition, equipment, technology, and infrastructure costs might also significantly affect your bottom line.

Outsourcing, however, can considerably cut or even eliminate many of these costs. This is because contractors typically do not receive additional job benefits or need a desk or office space. They are also simpler to onboard since specialists are typically hired for particular roles or purposes.

Limitations of IT Outsourcing

While outsourcing IT has many advantages for small businesses; it also has certain disadvantages. The following are some possible limitations of outsourcing IT:

1. Communication challenges

Working with outsourcing partners in different time zones or locations can make communication difficult, affecting project timeframes and deliveries. For example, both the employee and the vendor are impacted by evasive communication when a clear explanation of the issue or solution is needed.

2. Loss of control

For some business owners, outsourcing may result in losing control over specific aspects of their operations.

3. Data security risks

Due to the possibility of sharing sensitive information with other providers, outsourcing can compromise data security and confidentiality. In addition, the company collaborating with the outsourcing team is also endangered if any of its networks or devices are improperly set up or unprotected.

4. Compliance threats

The third parties a company works with also affect its compliance status; if any of them violate the GDPR or other laws, that company will no longer be compliant. In addition, the company collaborating with them is also at risk if any of its networks or devices are incorrectly set up or unprotected.

4. Quality concerns

Concerns about the calibre of the work produced by outsourcing partners may arise, mainly if there are linguistic or cultural issues.

Additionally, If a company does not spend a lot of time evaluating possible IT outsourcing companies, the calibre of their IT services may even decline. This is because not all outsourcing companies provide high-quality services, and getting stuck paying for too little labour wastes time and money.

Conclusion

Small businesses trying to remain competitive and grow in today's digital environment are likely to benefit significantly from outsourcing their IT services. Although it is understandable to have concerns and reservations, outsourcing your IT services has many advantages over the alternatives. For instance, by partnering with a trusted provider like Wazobia Technologies, you can reduce costs, gain access to cutting-edge knowledge and resources, boost productivity, and reduce risks.

So if you are looking for strategies to boost your revenue and advance your company, explore outsourcing your software development to Wazobbia Technologies.

Wazobia Tech is a Software Development Agency that specialises in custom software products and operations. They provide engineering solutions to help solve business needs for our clients, ranging from small and medium-sized enterprises to multinationals.

Wazobia Technologies has also developed helpful custom software such as content management systems, Hr management systems, inventory management systems, cross-platform applications, etc.

You also do not need to worry about outrageous costs because each project is tailored to fit the specific needs of each business and meet any budget.