We were talking in another article about the pros and cons of internal development vs. outsourcing IT services. Today we are going to talk about the types of IT services that can be outsourced and the proper conditions to do this. Here are some of the IT and software development services that can be outsourced:
- IT services (maintenance of servers/laptops, monitoring of IT activities, locating servers/data centers, locating applications); this is the easiest activity that can be outsourced and many companies are already doing it, especially since the CLOUD technology is becoming more accessible
- End-to-end development and implementation of software applications
- Implementation of solutions, configuration, consulting services (for highly specialized applications)
- Testing of software applications
- Maintenance and technical support (Tier 1, 2, 3) for software applications
What services should a company outsource and in what conditions?
In my opinion, companies that are working in critical business areas cannot be open to outsourcing their IT services, or to the external development of their core product. And this is understandable, as there is sensitive data that needs to be managed and protected.
Here is a set of criteria that a company can use to decide if/when they should externalize their IT and software services:
- The software product in question is strategic and the business depends on it (banking core system)
- The company is innovating (new game, new airplane models)
- The business should have a tight security control (army, nuclear power plants)
- The time to market is sensitive and important (retail, media)
- The software product is highly customized (financial markets)
All of the above business areas are quite specific and restrictive, but there are many other domains where all of the above mentioned types of services can be outsourced. We can mention Education, Healthcare, Constructions, Telecommunications, and Insurance.
Also, most of the small and medium-sized enterprises (SMEs) should properly think of outsourcing their IT and software services, taking into account the pros revealed in our former article. Some companies are still reluctant in what outsourcing is concerned, because of the following reasons:
- Lack of control in the status of development: this can be addressed by creating a specific communication plan (including reporting, meetings)
- Uncertainty about information confidentiality: we can solve this by signing a detailed NDA with the partner, or by having a confidentiality clause in the contract
- Lack of staff proximity: this is no longer valid, as technology is offering numerous ways of having virtual meetings, making easy the communication, deployments and accessibility in general
- Dependency on a specific supplier: this is something that a company should not be concerned with, as it is more efficient to have a long-term relationship with a partner that you can trust and that understands your business perfectly
If you are thinking of outsourcing some of your IT and software development services, we can help you understand what would be the best approach for doing this, from the point of view of your business. Just let us know!