IT outsourcing myth
IT outsourcing has become an important tool for companies in many industries to reduce costs, overcome the shortage of skilled workers and thus increase their competitiveness.
Even though IT outsourcing therefore offers many advantages, there are still some prejudices against this service.
In this article, we will take an in-depth look at some common outsourcing myths and refute them based on our practical experience.
Myth #1: IT outsourcing means you lose control of your company
Companies, whether large or small, commission third-party providers to carry out certain activities – this is how #outsourcing works.
This often concerns software development activities: for example, a company outsources its programming in the #Cobol programming language because skilled workers are practically impossible to find in Germany.
Outsourcing then entrusts certain people with certain tasks – no more and no less.
They are not given any further powers that do not relate to the assigned tasks.
Above all, they are (generally) not given any decision-making or planning powers.
The direction of development of the company, the department or the business model is still determined by the company itself.
Where companies must at least be careful, however, is the loss of know-how.
Particularly in rare programming languages, such as Cobol.
Cobol, for example, it is important to keep some of the expertise in-house.
This is simply because the outsourcing provider cannot always guarantee that employees with years of experience and in-depth know-how, e.g. with regard to a specific software, will not change jobs one day.
This risk can be reduced by choosing an outsourcing provider that pays particular attention to long-term employee retention and trusting cooperation.
Myth #2: IT outsourcing only makes sense for large companies
💡 The reality: outsourcing offers advantages for companies of all sizes!
🚀 Small companies benefit just as much as “the big ones” from cost savings, as they can access expertise without burdening internal resources or tying themselves down in the long term.
🤝 The gain in flexibility by outsourcing tasks and concentrating on their core business applies to smaller companies as well as large ones.
📈 Smaller companies’ (still) lack of outsourcing experience can be compensated for by customized consulting during the introductory phase and the gradual outsourcing of tasks.
🔗 Conclusion: Size is not decisive – strategic outsourcing adapts and brings growth for everyone.
Myth #3: IT outsourcing often still has a bad reputation in terms of quality
🤔 Statistics show that many companies that have already gained experience with IT outsourcing have also experienced that the results were not usable or that there was a great need for improvement.
But why is that?
🧠 In our opinion, the success of IT outsourcing depends heavily on the chosen model, strategy and choice of partner: 🔎 Both the outsourcing customer and outsourcing partner must commit to clear communication channels and transparent goals in order to achieve accurate results!
🌍 No matter where in the world: it is always the outsourcing partner’s job to source truly suitable #specialists and to pay attention to cultural fit – the first step is to find the right employee for the culture of the outsourcing client’s country and company.
But bringing the right people together is by no means the end of the story: successful #onboarding and the integration of outsourcing employees into the outsourcing client’s team, e.g. through advice and support from the outsourcing service provider, are just as important for the success of the outsourcing project.
If outsourcing employees move around the team like satellites, it is very likely that the results will also suffer.
💡In our view, it is also important that the outsourcing partner attaches importance to the employees’ professional and personal development.
In addition to the time they spend on the outsourcing client’s tasks, there must also be enough room for internal and external #training and #teambuilding activities.
This trains employees’ creativity and communication skills and ultimately also leads to better results.
🤝 Finally, our approach to IT outsourcing also includes a commitment to ethical business practices.
What does this have to do with the quality of the result?
Quite simply, a high level of #motivation from all members of the team will most likely favor the successful achievement of objectives.
🚀 In our opinion, the key to a successful outsourcing project is therefore to find the right partner who not only offers technical expertise, but also uses the above-mentioned success factors as a benchmark and remains a strong partner at the outsourcing customer’s side (especially during the onboarding phase, but also afterwards).
Myth #4: IT outsourcing is unethical
Outsourcing is a complex topic that is fraught with many prejudices. The following argument against the use of outsourcing is heard time and again: “Outsourcing is inevitably unethical.” We would like to clear up a few misconceptions here! ⚠ We’ve all heard of unethical business practices in the outsourcing sector. As a rule of thumb, the worse the economic situation and income situation, as well as the legal protection of employees in the target country, the greater the risk that an outsourcing provider will not adhere to human rights and general principles of good working conditions and will exploit the precarious situation of employees. 🗺 Incidentally, this is also one of the reasons why companies in Germany initially consider the nearshore option when considering outsourcing. If, for example, outsourcing to Poland, an EU country, is considered, it can be expected that at least certain legal regulations are in place to protect the rights of employees. In the case of offshore destinations, such rules are sometimes lacking or the details are usually unknown to the customer. 🤝 However, outsourcing does not have to be unethical. The right partner is the most important factor here. If this partner is committed to human rights and social working conditions (even beyond local legal standards or common business practices), outsourcing can even have many positive effects. To name a few: 🌍 Strengthening the local economy: Outsourcing allows companies to invest in emerging markets and thus contribute to the economic strengthening of these countries. Outsourcing enables the creation of jobs in regions that benefit from economic development. As a result, outsourcing can contribute to improving living conditions, promoting growth and reducing economic migration. 💡 Knowledge sharing: Global collaboration and knowledge sharing can promote diverse perspectives and innovation, which is beneficial for both the outsourcing company and the outsourcing partner’s region. 👥 Benefits of cultural diversity: Collaboration across national borders promotes understanding of different cultures and creates a diverse global community. Diversity promotes creativity and communication in teams if it is practiced correctly. ✅ We are convinced that outsourcing, when implemented with responsibility and respect for human rights, can be a positive force that outsourcing customers and outsourcing companies can use to make a positive difference.
Myth #5: IT outsourcing is not a long-term solution
It’s time to debunk this myth!
🕵️♀️ #Outsourcing can very well be a long-term and strategic solution for companies striving for growth and efficiency.
🔑 The fact is: companies around the world are successfully relying on outsourcing to make the most of their resources.
From IT to customer support to accounting, outsourcing allows companies to focus on core competencies while specialists take care of specific tasks.
🌱 Long-term benefits: Outsourcing can help reduce operational costs, maintain access to expertise while retaining flexibility in a changing business environment.
📈 Long-term, not short-term: Outsourcing goes beyond short-term transactions.
Partnerships can form in which all parties involved learn and grow from each other.
Long-term relationships make it possible to continuously optimize processes and achieve lasting project success.
✨ Companies should therefore not view outsourcing as a temporary measure, but as a long-term strategic approach to achieving their goals.
The key is to find the right partner and build a partnership based on trust and clear objectives.
We look forward to hearing your thoughts and experiences on the subject!
Myth #6: IT outsourcing jeopardizes the company's reputation
📣 This myth is often based on the fear that outsourcing tasks to external partners could jeopardize a company’s reputation.
This also has to do with the sometimes bad reputation of outsourcing, which is often associated with poor working conditions, such as excessive working hours, discrimination against minorities, little vacation and hardly any social security.
🔎 But let’s dispel a few prejudices.
Outsourcing is not problematic per se, but only when an outsourcing provider disregards essential principles of good working conditions or when you work with freelancers who have no social security.
🤝 Our company is committed to social and sustainable outsourcing.
We work intensively to analyze the social and other risks of common outsourcing business models and find alternative solutions as part of our offering.
We believe that people – especially in the outsourcing business – are at the heart of every company and that their well-being should therefore have top priority.
Ultimately, this factor is the basis for the long-term business success of outsourcing providers and outsourcing customers.
What does that mean?
✅ When selecting our teams, we place great importance on cultural match to ensure seamless integration and harmonious and efficient collaboration.
✅ Our managers and employees benefit from an extensive training and development program to ensure they are always up to date.
✅ We foster a healthy office culture and organize team-building activities and events.
✅ Social responsibility is not just an empty phrase for us.
We actively campaign against bullying, harassment and environmental pollution as well as for diversity and the promotion of families.
The latter, for example, through part-time work opportunities and parental leave models for our employees.
✅ We offer our employees significantly above-average salaries for their destination and protect their health with comprehensive health insurance.
✅ Our modern workplace in Hyderabad offers first-class and health-friendly office equipment, spacious workstations and state-of-the-art safety technology.
We believe that a strong team, a clear corporate culture and transparent communication are the best safeguard against any reputational damage.
With us, you can be confident that outsourcing is not only efficient, but also responsible.
If you have any questions about this: Ask us!
We are also happy to offer those interested in our outsourcing services, for example, on-site meetings with our employees or an office tour via video call.
Myth #7: Outsourcing is only cheap because employees are paid a pittance
💰 Until now, this has been one of the main reasons why companies in Europe and the US have considered outsourcing: outsourcing allows companies to benefit from highly skilled professionals in regions with a typically lower cost of living.
In doing so, outsourcing creates valuable jobs in regions where a higher salary means greater purchasing power, boosting the local economy.
🤝 However, lower salaries than in Germany do not mean that outsourcing employees are not fairly remunerated.
What is important is that these employees receive a fair wage for their work in their home country that is commensurate with their demanding training.
💵 The following trend is also emerging: A major shortage of skilled workers is becoming apparent in the IT sector, particularly in Europe.
In the long term, IT outsourcing will therefore not only play an important role in reducing IT costs, but simply in order to be able to reach certain specialists at all.
In the long term, this will also have an impact on salaries in outsourcing destinations.
Paying good salaries (and also offering good working conditions and other benefits) will then also be increasingly necessary in order to attract the best specialists for projects in Europe.
Myth #8: IT outsourcing makes you dependent on one service provider
Outsourcing does not necessarily mean giving up control over certain processes within the company.
However, it is important to find the appropriate measure and implementation method in each individual case in order to deploy resources more strategically and focus on core competencies while “keeping the reins in hand”.
🧠 The most important lever for avoiding dependency often lies in the right strategy.
What level of outsourcing is suitable for your company or your project?
For example, it may make sense to keep the business logic and possibly also the development of the backend, i.e. the backbone of your software, in-house.
This allows you to retain control over your most critical processes.
📂 But that’s not all.
Good documentation of the development process is just as crucial in order to be able to track all decisions.
The key tools used in development are important here, as is a very clear strategy on how to systematically work with and document them.
A smart partnership with an outsourcing company can help you leverage specialized skills and resources without compromising your independence.
The right partners will work hand in hand with your team to ensure that your business goals are always at the center.
Myth #9: IT outsourcing jeopardizes IT and data security
🙅♂️ In fact, the opposite can be the case.
Professional outsourcing companies often have a highly specialized setup and conceptual strategies to ensure the protection of IT systems and data.
🔎 Precisely because the topic of data protection and IT security is such a high priority for outsourcing customers, and at the same time there are many detrimental misconceptions in circulation, many outsourcing companies do not take a ‘stop-gap’ approach in this area: Rather, they are at the cutting edge of technology and employ the best security routines to protect your data.
Outsourcing providers are therefore often also good contacts for the topics of redundant systems, backups and disaster recovery plans.
💡 In many cases, outsourcing can therefore even increase data protection and IT security.
📋 At our sister company OMNICS TECHNOLOGIES PRIVATE LIMITED, for example, we have
For example, at our sister company OMNICS TECHNOLOGIES PRIVATE LIMITED, we have opted for extensive certification in accordance with ISO 27 001 in order to be able to demonstrate compliance with the highest security standards to our customers.
Myth #10: All IT outsourcing providers are the same
🗄 IT outsourcing providers are often all pigeonholed into one category, which is evident from the fact that the common outsourcing myths we have presented to you usually do not differentiate between them.
🌍 Basically, there are many different categories of outsourcing.
For example, #nearshore (outsourcing in European or pan-European destinations) and #offshore (outsourcing, roughly speaking, on other continents).
💻 Outsourcing providers can also be differentiated according to their offering.
Some have a very broad offering, which can include other services such as call center operations or content creation in addition to development.
Others are very specialized in very specific tasks.
📊 Outsourcing providers can also be differentiated according to how they deal with the potential for cost reduction and the less regulated working conditions in the target country.
There can be far-reaching differences here.
If you want to know more, ask!
Here are a few tips: 💸 Research the minimum and average wage in the target country and compare this with the outsourcing provider’s price for a full-time equivalent 🤳 Ask to see pictures of the employees’ offices and ask about details such as working time recording, office equipment and safety technology 🚑 Find out about the conditions of healthcare provision for employees, e.g. whether they are covered by health insurance (preferably not optional) and whether insurance policies also include other offers, e.g. for the family.
🚼 Ask about the applicable parental leave regulations for women and men and other support offers for families, such as part-time options 🍊 Find out about the atmosphere in the team and ask what team building and training opportunities employees receive
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