Outsourcing certain tasks and departments has become a way of life for businesses both large and small. The reason for this is simple: outsourcing has several advantages, including saving important time and invaluable money.
The Popularity of Outsourcing
According to Forbes, some of the largest corporations in America rely heavily on outsourcing certain departments. Caterpillar (a US-based manufacturer that designs and markets large machinery), for example, grew its outsourced workforce by 39 percent between the years 2005 and 2010. Its in-house growth was much less during this same time period.
They are certainly not the only company that relies on outsourcing. As reported in the Wall Street Journal, other major corporations–such as GE, Microsoft, Wal-Mart, Cisco, Intel, Oracle, and Chevron–have followed the outsourcing trend and heavily rely on it for increased profit margins.
The Advantages of Outsourcing IT
There are many areas of a business can be outsourced, but Internet technology (or IT) is an ideal department to move out of house. One reason for this is that IT (unless you own an IT company) is not the heart and soul of your business (in other words, it is not what your business does). However, its importance lies in the fact that your business can’t always function unless your IT department is functioning as well.
Overall, according to the New York Times, those who outsource their IT department can reap several benefits, including:
Controlling Capital Costs
Outsourcing turns fixed costs into variable costs. This, in turn, releases capital for investment in other areas of your business.
Running on Better Efficiency
When a business outsources its IT department, it has the option of outsourcing to a company that is filled with IT experts, such as LANtek Watch. This helps not only the IT department but the entire company run with more efficiency. Time, money, and frustration are saved by not having to deal with complicated computer problems in-house.
Cutting Labor Costs
Outsourcing IT means that a company can save on its labor costs. This is done a few ways, including: only paying for IT when it is actually needed (rather than paying an employee to be idle when no problems are present); not having to pay employees health, sick leave, or vacation benefits; and reducing the amount of equipment (such as computers, desks, and chairs) that is needed in-house. By having fewer employees, money is also saved on utilities.
Providing Time to Focus on Other Things
Another benefit of outsourcing IT is that it gives you more time to focus on other areas, such as your core business.
Supplying a More Even Playing Field
For businesses that are small, it can be a difficult task to behave like the bigger corporations; there may simply not be enough funds. Outsourcing IT tasks can give small companies the ability to act like bigger corporations, by gaining access to the expertise that the larger corporations are privy to.
Freedom to Cut Back on Work Load: Per the Entrepreneur, another benefit of outsourcing is the flexibility to cut back during down times. It’s much easier to reduce the workload of a vendor than it is to tell an employee they are out of a job.