IT sourcing isn’t a buzzword of today. It’s a tried and true method that organizations of all sizes are benefiting from and is likely to become increasingly more important as systems continue to evolve, but what it is and how it can benefit a given establishment will vary.
IT Sourcing Definition
In the not too distant past, a company’s management of technology was relatively simple. If a program was needed to manage inventory, it could be purchased, along with licenses to operate it on multiple systems. If a company wanted to add in multiple storefronts, track online and brick-and-mortar sales together, or identify trends for more efficient ordering and staffing, this could also be done, but typically not without adding in after-market solutions or coaxing multiple systems to work well together. Although the complexity of managing these systems increased, it could still generally be managed by an in-house team. Now, companies are using these same types of applications and programs to track all kinds of data to help their enterprises run efficiently. Convincing each program to integrate properly and ensuring each one continues to perform well is not always easy. It requires the assistance of various technology experts, which may be cost-prohibitive and often cannot be done by an in-house team at all.
Moreover, there are countless applications and programs available, with new technology emerging daily. Choosing the right applications and programs can also be problematic because there are so many robust systems to select from, each with potential drawbacks and benefits. In order to know which is best, a company head would have to become familiar with hundreds, if not thousands, of technological solutions. For most companies, this is simply not fathomable.
IT Sourcing Definition: Solving the issues outlined above with the assistance of an external information technology team or services.
Types of IT Sourcing
“IT Sourcing” has a catch-all definition, which may refer to one or many types of assistance.
- Business Process Outsourcing
- Knowledge Process Outsourcing
- Selective Outsourcing
Business Process Outsourcing
There are two main types of business process outsourcing (BPO); front office and back office. Front office refers to consumer-facing jobs, such as customer service, scheduling, and inbound/ outbound sales. Back office outsourcing does not impact the consumer directly, but ensures daily operations are managed and may relate to things like data entry, data management, quality checks, payroll, and accounting.
Depending on how a company is structured, the IT department may be responsible for managing company servers, setting up firewalls, running the organization’s website(s), and managing all the programs and applications responsible for business processes. These things can be entirely managed by an outside firm in order to avoid hiring an IT staff or can be partially outsourced, so the internal IT team can focus on what matters most to the organization.
Sometimes, an organization needs to have an in-house team handle a task; perhaps for privacy reasons, because delicate systems need to remain on site, or for the sake of inter-department collaboration. In these cases, hiring a team for a short-term project or keeping up with the staffing and hiring needs can be problematic. Insourcing refers to bringing an external team on board, whether as a long-term solution to handling an organization’s technology needs or to oversee a change.
Knowledge Process Outsourcing
Like business process outsourcing, knowledge process outsourcing (KPO) involves having an external group manage business processes, but in this case, the tasks aren’t minor things like data entry. They’re duties that require a specific skillset to complete. For example, web design, accounting, and legal services could each be handled by a highly educated in-house employee, but every organization doesn’t have a need for a full-time employee and staffing, especially with these high-level positions, is challenging. KPO eliminates these challenges and puts the right professional in the position quickly.
Multi-sourcing is a form of outsourcing, but rather than hiring one team to manage all aspects of a project or department, numerous experts are called in to handle different portions. For example, a company’s technology may be managed by one person or team who handles security, another who focuses on web design, another who sets up desktops for employees, another who writes new applications for back office processes, another who runs the help desk, etc.
As the name implies, selective outsourcing involves choosing only specific tasks to outsource, so that a company’s IT department can focus on core functions.
IT Sourcing Strategy
The right strategy will vary by organization, but creating one that works is generally based on two things.
- Effective management of systems to ensure a company continues to move forward with minimal disruptions to service.
- Saving money by ensuring the processes that are in place are cost-effective.
Is IT Sourcing Right for Me?
The modern age is all about data. Some degree of IT sourcing is beneficial to every organization, but identifying key areas, ascertaining the benefits for each area, and tracking the data to see how an organization is benefiting, is paramount in any IT sourcing strategy.