The use of external service providers is the phrase that defines IT outsourcing, where business outcomes resulted from an effective IT enabled business process, application of service and infrastructure solutions.
It has been observed that outsourcing has become a major trend in the area of human resources. The practice is done by having people outside of the firm to conduct some job functions instead of having an in-house team to do it.
One may ask on why outsourcing on some things is to be considered. The immediate answer is simple, and that is from experience you will get better results at a lower costs if the product or job is being outsourced. Another advantage is that you are lessening your time consuming tasks from your list of to dos in the company. By doing outsourcing, you can now concentrate more on the critical aspects of the business by removing some tasks that will in effect increase the productivity of your company, which hopefully will lead to more profitability.
And so your second question then is to ask what things are to be considered for outsourcing. Nowadays, those jobs that are labor intensive like financial and technical are the top ones that are usually outsourced. Big companies today are benefited from outsource providers like call centers, software and research development centers.
If we take a small company for example where the owner could be doing more than one jobs, will be beneficial for him and the company if another entity outside of the organization will perform the other jobs he is doing.
A job that is better to be outsourced should be done if you think that it can be performed by another person. Imagine if only one employee who is underpaid, little vacation nor training, then he or she becomes ill or disgruntled in his or her job, then the profitability of the company is also affected.
As you outsource some functions, this should be on the basis that the company would become more profitable, employees more efficient and the company has saved some costs.
Nowadays, being competitive among small and medium sized companies would be a result of the IT as part of the organization. The technology needs that will save time and money in a company are solved by IT outsourcing.
There is also the IT managed services term being used today and this refers to the new model of IT management that replaces the traditional IT model, where they handle the risk and responsibility of your IT systems.