IT Outsourcing: How SMEs and Startups Can Benefit from IT Companies

When you look at the numbers, smaller businesses and startups are at a disadvantage in many ways. They have less capital to start their business, which means everything from their staff to the location they pick has to fall within a smaller budget. This constraint also extends to their IT outsourcing options and while not everything that’s cheap is low quality, it puts SMEs at a disadvantage compared to competitors who get the best their money can buy.

To compensate for their lower capital, SMEs and startups are looking for ways to reduce their costs. Previously, we said that hiring remote workers was a great way to reduce startup costs. But if you want to go even further and pay for the service instead of the worker (saving yourself a lot of money in the process), you can opt to outsource your help desk support and business technology from IT Companies outsourcing their services.

What Is Outsourcing?

The growing trend in businesses of all sizes is to outsource a certain business process to a third-party company instead of having to hire an in-house team of employees. Let’s say your startup is a restaurant established in a certain city. There’s more to that business than just selling food: you have to deal with the marketing, connecting with suppliers, paying your staff, and other business operations. Instead of hiring an in-house marketer, accountant, and other people (which will take a huge part of the costs in terms of paying their salaries), you pay for an outside company to do these processes for you at a fraction of an average salary’s cost.

Since the early ‘90s, outsourcing was recognized as a legitimate way to cut costs and, since then, more and more businesses have been using it so that the money they save can be used for other operations needed to keep the business afloat. In fact, compared to hiring your own in-house team of employees, outsourcing your IT operations offers you with multiple benefits.

Cost-Effectiveness and Quality

The average salary of someone in the IT industry ranges from $40,000 to $82,000 a year, depending on their experience and expertise. Aside from the tech you will need to operate your business, you may need one or two employees to form an IT team to see that your business runs smoothly. Aside from their salary, you may also be responsible for other government-mandated benefits, competitive benefits, and other expenses that come with hiring your own employees. And should your employee ever decide to resign, you’ve got to spend to find people to replace your leaving employee.

Photo credits from: Carlos Muza (https://unsplash.com/photos/hpjSkU2UYSU)

Outsourcing your IT operations, on the other hand, means you’re only paying for the service the IT Company provides, not the employees they hire to do the job for you. It’s a fraction of the cost of hiring your own team because you’re not paying the IT employee’s salary – the outsourcing company is. You don’t have to worry about employees resigning and finding a replacement ASAP because that’s the company’s responsibility – all you have to worry about is getting the work from them on time. And if you aren’t happy with the results, you can always find a different company that can do the job better.

High Return on Investment

When you have IT Companies filled with certified experts providing you with the work an in-house team can provide at less cost, you get more than you pay for. It is expensive to hire IT experts, but the best IT outsourcing companies are filled with qualified, certified, and experienced professionals – and you don’t even have to pay them.

This is particularly beneficial both to you and your customers. Let’s say that you do hire an in-house team for IT and all your other processes. To meet the costs of hiring your own employees and your relatively small capital, you have to increase the prices of your business just to make a profit and offset the additional costs. Chances are, your competitors have already found ways to reduce costs while maintaining quality, so why would potential customers go to your more expensive business when your competitor provides roughly the same quality but at a lower price?

Increased Efficiency and Focus on Business

Having to hire IT, accounting, and other necessary employees for day to day operations will cost a lot. And instead of you focusing on the core of your business (e.g. the food of your restaurant or the clothes of your boutique), you have to focus on all the operations because these employees are all under you and it is up to you to determine whether or not they’re doing enough for their job.

Even if you do hire an expert in an SME or startup budget, either you or someone will have to spend weeks training your employee for their day to day tasks – which wastes time on the new employee’s part (because they’re learning while getting paid) and you or whoever is training them (because they take time out of their daily tasks to train them). With limited time and attention, outsourcing ensures that you and your employees focus on the core of the business without having to lose focus, waste time, and decrease productivity.

While you may be required to hire your own team for some job positions, for tasks like IT where it is important but not the real focus of the business, it is more cost-efficient to outsource. If your business is on a tight capital, consider outsourcing your service for better focus, lower costs, and higher productivity.