Insights

Do Startups Really Need Outsourced IT?

Companies of all sizes are now outsourcing their IT department in an effort to reduce costs and increase efficiency. Many of the most popular and prominent IT companies today were once startups, and to this day, cutting-edge startups remain a driving force within any sector. As a lean startup, it seems the logical choice is to employ cost-saving measures.

Outsourced IT enables companies to tap into the power of economies of scale, while allowing them to remain both nimble and flexible. Creating an IT infrastructure from scratch, in-house, is extremely expensive. By using outside solutions, such as software development, VoIP, cloud hosting, and more, small-to-midsize companies can save money without sacrificing quality. Invariably, if you select the right external IT partners, you can ensure quality, easy maintenance, and ease of use.

Outsourcing allows startups to stretch cash

Many startups are strapped for cash. Even those companies that are fortunate enough to be backed by venture capital and angel investors typically need to spend their money wisely and prudently. By outsourcing certain IT functions, including hosting and software development, companies can reduce costs.

Acquiring tech talent is now a major challenge for many companies. Even as globalization allows companies to tap into remote employees from around the world, there simply aren’t enough specialized professionals to go around. Startups may find themselves trying to compete with much larger companies, such as Alphabet or Amazon, for the same skilled IT staff, software developers, and the like.

And often, smaller companies lose out to their larger peers. On the other hand, when you work with a reputable IT outsourcing company, you don’t have to worry about identifying and poaching the right talent. Your IT outsourcing partner will already have the talent needed on hand.

Get projects started faster

Developing software and building an IT infrastructure can be time consuming, especially if you’re designing an environment from scratch. Simply setting up servers, developing the basic coding framework, and establishing appropriate communication and quality control channels can be difficult.

Your outsourcing partner will have already gone through all these pains and have the right protocols and procedures in place. This means you can get your project rolling right away. For startups, this is especially important because many operate on tight timelines. Investors want to see progress, and if you’re not equipped to move quickly, a competitor may beat you to the market.

Reduce training needs

Each time you bring a new employee on board, you can expect to see at least 100 days or more to get adjusted to the company culture, processes, and work environment. This equates to over three months for most companies. While large companies can afford to onboard team members over the course of a few weeks, many startups will struggle with the need for people to get to work right away.

Further, startups typically have a small staff. If you’re trying to train say half of your employees at once, because they’re newly hired, that means you’re going to have to spend a few weeks simply getting everyone on the same page. It may be close to impossible to deliver results and push projects forward during this time.

However, the right outsourced IT partner can get started on projects right away. You won’t have to deal with the pressures of training staff and waiting for them to get comfortable with your organization.

Increase your choices and options

When you decide to outsource, you open a wide range of options. You get to work with a select team chosen for their expertise and background. Not to mention, you can have access to their expertise 24/7. It’s akin to having your very own brain trust without the associated hiring and salary costs. For instance, the average cost of hiring a new employee is around $5,000 and insurance and benefits means it can cost up to $70,000 annually for a $50,000-a-year salaried employee.

Reduce personnel problems

It’s estimated that as many as 10 percent of funded startups fail due to personnel problems, meaning the company in question hired the wrong person. Perhaps the hire lacked talent, or maybe it was a personality issue. Either way, selecting the right staff is a tricky proposition, especially if you’re not an HR expert or hiring whiz.

When you use outsourced IT, you don’t have to deal with these types of obstacles. Of course, you must examine the reputation and skills of the outsourcing company in general. However, doing so is often easier than trying to find the perfect employee for every position.

Focus on your core competencies and business objectives

With outsourced IT, you can work with a team of experts who are well-versed in establishing an IT infrastructure, developing software and apps, delivering services through the cloud, or whatever else. Either way, by lending a helping hand, your IT partners allow you to focus on what’s important.

As a startup founder, this means you can work on securing deals with clients, pitching to investors, and otherwise focusing on the core competencies and business objectives that will ultimately make or break your company. The first few years for any company may ultimately determine whether the undertaking will be a success or failure. Through outsourcing, you can free up time and resources to focus on the most pressing issues.

Of course, IT is vital for a company too. However, when you work alongside the right outsourcing partner, they will be able to handle many, if not all, of your IT needs. They will be able to leverage their experience and skills to ensure that IT projects run smoothly and on schedule.

Outsourced IT just makes sense

By outsourcing IT, you may be able to dramatically increase your chances of success while reducing risks that threaten to overwhelm your startup. Outsourcing allows you to focus on key challenges and objectives while increasing flexibility and improving the speed of your development processes. Of course, you have to select the right IT partner if you want to maximize benefits. Are you ready to find out how outsourced IT can help your business? Contact SSI today.

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