Question 1

What is an IT outsourcing company?

Accepted Answer

An IT outsourcing company is an external, third-party service provider that delivers IT-enabled business processes, application services, infrastructure solutions, utility services, software as a service (SaaS), and cloud-enabled solutions. It can take on full responsibility for all IT maintenance and support or provide only additional support to an in-house IT department.

Question 2

What are the different types of IT outsourcing?

Accepted Answer

Here are the different types of IT outsourcing, tailored to meet various business needs:

Offshore outsourcing: Sending IT-related work to a company in a foreign country that offers lower costs and/or tax savings.
Nearshore outsourcing: Sending IT-related work to a company in a country on the same border, which ideally makes communication and travel between the IT outsourcing provider and the client company fairly easy.
Onshore outsourcing: Outsourcing a third-party service provider located in the same country as you.
Cloud computing: Outsourcing a third-party service provider that offers cloud consulting services and cloud solutions.
Managed services: Contracting a third-party company to provide network management services including call centers, network monitoring, and more.

Question 3

How does IT outsourcing work?

Accepted Answer

IT outsourcing works by external service providers delivering IT solutions and expertise to businesses, helping them achieve desired outcomes efficiently. These solutions can range from IT-enabled business processes to application services to infrastructure management.

Monitoring, managing, and optimizing digital infrastructures can be challenging for in-house IT departments, especially when they’re focusing on the business’s core functions/operations. As such, the following IT services are typically outsourced:

Technical support
Data security (Virus protection, data backup and recovery)
Technology road mapping and planning
Helpdesk
Application, software and database development
Network management
Web development/web hosting
Application/software support or management
Database development or management
Telecommunications
Infrastructure – hardware, software, network installation and support
Data center management
Data storage

Question 4

What is the difference between IT consulting and IT outsourcing?

Accepted Answer

The distinction between IT consulting and IT outsourcing is how they approach your project. IT consulting shapes the direction and strategies of the project, while IT outsourcing follows this direction to implement strategies and execute the work.

IT consultants offer guidance and advice on how to shape your strategies. They also lead and collaborate on projects to achieve specific goals.

That said, you need to find specialized experts to carry out the project effectively. IT outsourcing delegates IT-related tasks to a specialized team of service providers. They, in turn, perform and complete the necessary work and other specified services.

Question 5

How much do IT outsourcing companies charge for their services?

Accepted Answer

IT outsourcing companies typically charge from $60 to $200+ per month per user, depending on the services rendered. The service provider's location is another major factor in the total fees.

These are the average hourly rates based on the IT company’s region:

Regions	Average hourly rates
North America	$62 - $209
Central and Eastern Europe	$26 - $95
Latin America	$34 - $96
South Asia	$24 - $71
Southeast Asia	$18 - $70

The yearly costs of outsourcing IT services, based on the client's team size, are:

Number of employees	Average annual cost of IT outsourcing
50	$60,000+
75	$90,000 to $130,000
15	$190,000+

There are a couple of different IT outsourcing pricing models:

Fixed price: Based on a well-defined scope of work and requirements, the IT outsourcing provider estimates the workload needed to complete the project and proposes a fixed fee. The fixed fee is equal to the volume of work multiplied by the hourly rate.
Time and resources: This flexible model allows parties to agree on an hourly or monthly rate per type of expertise.

Question 6

Why should I outsource IT services?

Accepted Answer

You should outsource IT services because it allows you to offload complex technological tasks and focus your resources on your core business operations. It can also help your organization and employees adapt more easily and quickly to the constant changes in tech.

Other reasons to outsource IT services are to:

Gain access to top IT talent and technical expertise
Leverage tailored, future-proof, and scalable technological solutions
Get an immediate, proactive response to technical issues
Enhance cybersecurity and compliance
Plan and execute effective data backup and recovery
Improve productivity
Drive business growth
Control and reduce costs
Complement your existing team

IT outsourcing service provider, Vention, published a case study on their partnership with Upvest, a Berlin-based financial services startup, showcasing these benefits.

Vention improved the client's B2B platform, API, and Google Cloud infrastructure and monitoring. This enabled Upvest to scale, reach a transaction volume of $100+ million, and secure an impressive $18 million in Series A funding.

Question 7

How do I choose the best IT outsourcing company?

Accepted Answer

Choose the ideal IT outsourcing company by following these steps:

Business needs: Analyze your business's technical and functional requirements. Document the software types you plan to build or use, the tech stack necessary to reach your intended solutions, budget, and timelines.
Research: Search directories or B2B network websites and sort them based on reviews, ratings, and core and specialized services.
Industry expertise: Consider companies that specialize in what you need and have extensive experience in your domain. It can be software development, infrastructure management, tech support, or maintenance, among others.
Technologies: Ensure they are equipped with up-to-date hardware and the latest software for guaranteed efficiency.
Licenses: Check for updated certifications and licensing to provide IT services.
Project management methodologies: See if they use agile, waterfall, scrum, lean, DevOps, or other preferred methodologies.
Shortlisting: Based on your initial research, select up to five companies and communicate your intent to work with them.
Requests for proposals (RFPs): Send the shortlisted candidates an IT outsourcing RFP and ask for a quotation with a detailed breakdown. Evaluate how these demonstrate each agency's domain knowledge and expertise. Also, assess if the quotes are reasonable. Note which one will be the best possible deal considering your requirements, budget, and the service provider’s role in your business.
Project demos: Invite them to demonstrate their proposed technology solutions. Inspect how each solution fits into your organization's processes as well as its potential risks, economic viability, scalability, and user-friendliness. Assess your overall experience with the demo and how the team plans to handle any bugs.
Cybersecurity: Make sure they are updated with emerging trends and technologies as well as data security and compliance best practices. Ask about remote work enablement and how they ensure security in this setup.
Flexibility: Presenting prospective IT outsourcing firms with a detailed account of the levels of service you need is crucial. Look for an agency that can follow as your business needs change and whose services are built on flexibility, designed to adapt to your evolving requirements.
Approach: Peek behind the curtain and analyze their case studies and their overall approach to project management. Designing the best possible product or implementing an IT solution starts with a clear understanding of both parties. The ideal IT outsourcing provider will establish preferred communication channels and a clear, legible roadmap.
Deliberation: Once you’ve collated and compared information, assess the balance between cost and value of services. Also, factor communication skills, style of collaboration, and cultural compatibility into your final decision.
Selection: Enter into an agreement with an IT outsourcing service provider that can meet your requirements—in a timely manner, and within a reasonable budget.

DesignRush can help you find the ideal IT outsourcing service provider for your business—for free. Visit our Marketplace to share your project specifics with us. We'll run your requirements through our Directory and connect you with up to five of the most suitable candidates.

Question 8

What questions should I ask potential IT outsourcing firms?

Accepted Answer

Ask these questions to prospective IT outsourcing firms:

What are your competencies? Which areas in IT are outside your scope of expertise?
Have you worked on similar projects in the past? Have you worked with clients within the same industry like ours?
What are your on-site and off-site services?
What happens during your discovery process of our existing IT infrastructure?
Based on our current networks and systems, plus our requirements, which new hardware and software do you recommend?
How do you plan to integrate these new technologies into our business processes?
What automation processes do you think we should implement? How will these processes improve our organization's efficiency?
Which compliance frameworks do you support?
Do you provide proactive devices and infrastructure monitoring?
What are your security and privacy policies?
What is your disaster recovery and business continuity plan?
How do we escalate high-priority issues? Who will respond to these and how fast can we get a response?
What is your typical resolution time?
Do we get around-the-clock client support?
How do you measure speed, reliability, and performance?
What is your pricing structure? What does it include?

Question 9

What are the best IT outsourcing companies in the U.S.?

Accepted Answer

The best IT outsourcing companies in the U.S. are:

BairesDev
- 4.9-star rating with 25 reviews on DesignRush; 4.3-star rating with 27 reviews on Google
- Top clients: Google, Salesforce, IBM, Rolls-Royce
Kanda Software
- 4.8-star rating with 14 reviews on DesignRush; 4.7-star rating with 7 reviews on Google
- Top clients: OneSky, Havas Media, Rue La La, Association of Computing Machinery
Azumo
- 4.9-star rating with 10 reviews on DesignRush; 4.6-star rating with 13 reviews on Google
- Top clients: Discovery Channel, Facebook, Twitter, Bento
Admios
- 4.8-star rating with 4 reviews on DesignRush
- Top clients: Converse, Terraformation, Shop Ware, CouchSurfing
Codup
- 5-star rating with 43 reviews on DesignRush; 5-star rating with 1 review on Google
- Top clients: Unilever, Dyson, Harrods, Seacoast Bank

Get more details about these companies above and discover more from the directory. Use the filter functionality to sort based on location, average team size, fees, reviews, and more.

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