For decades, businesses have grappled with the benefits and drawbacks associated with outsourcing and offshoring IT services, with consensus typically swaying back and forth, hinging on the bottom line.
In the past, cost-cutting was the definitive driving factor for outsourcing in most executives’ minds, but the COVID-19 pandemic has forced many businesses to make drastic alterations in their plans for growth and sustainability. Many industries have shifted dramatically toward remote work—including their IT departments—leading many to a new perspective on the pros and cons of reducing internal responsibilities in favor of adopting managed services. For many organizations to survive and thrive, it is increasingly important to assess the areas that would most benefit from outside expertise.
The pandemic exposed weaknesses in using fully offshored IT services, and as countries across the globe shut down in their own time, reliant companies have had to take measures to ensure continued operations. There is potential in a hybrid approach of blending IT outsourcing with insourcing—maintaining in-house designated IT staff, or same-region remote workforce, for specialized tasks and emergency operations; at the same time, an MSP handles day-to-day operational tasks and maintenance.
Furthermore, as digitization requires increased cloud migration, SMBs would benefit greatly from bringing in an expert organization prepared to serve the company’s transformation beyond the “lift-and-shift” approach. By focusing on their own strengths and expertise and handing off certain IT services to a more well-suited MSP, companies can concentrate on creative disruption and innovation—or better yet, instituting new customer experience initiatives and implementing stronger support systems for their workforce.
When it comes to workforce expertise, many countries lack the necessary skilled labor force required to maintain their IT infrastructure or lead the cloud transformation; or onshoring is simply too expensive.
Recently, Eastern Europe has emerged as a new hub for tech, including the next generation of skilled IT professionals. With lower labor costs compared to similar local experts, SMBs can divert more resources to long-term in-house IT projects by offshoring maintenance—as well as the monitoring of advancements in cloud technology.
Multinational Indian IT services provider Wipro recognizes the need for a balance of on-site expertise and external support, even as it provides much of the offshore service for Western companies. The consensus seems to be that a combined approach is likely the most sustainable, post-pandemic and beyond.