The Definitive Guide to IT Outsourcing for 2016

What is Information Technology (IT) outsourcing?  By definition, “IT outsourcing is the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes.” By outsourcing your IT program, an experienced provider can help you develop the right sourcing strategies and vision, service providers, contracts, and even govern deals for sustainable win-win relationships with external providers.

Outsourcing can ultimately help you reduce costs (overhead and human resources), accelerate your products to market, and take advantage of external expertise, assets and/or intellectual property. IT Services could include areas such as security, maintenance, or customer support.  So how do you know it’s for you?  Let’s take a look at some of the variables:

Types of outsourcingWhat are the types IT Outsourcing?

The type of IT outsourcing is best defined by the location that the outsourced work physically takes place.  This can include:

These types of outsourcing produces a virtual workforce that is farmed out to a 3rd party (regardless of location). These functions include:  Application/Software development and Testing, web hosting, application support/management, help or service desk, database management, telecommunications, and of course, your IT structuring (what is IT structuring?).

downThe Fluctuating IT Outsourced Job Market

While overall IT outsourcing has flattened out over the last few years, many of the IT functions are expanding and  others are declining. According to Computer Economics 2015/2016 IT Outsourcing Statistics Executive Summary [an annual study], IT security work, web/e-commerce systems, and application hosting are all on the upswing while other IT functions are in decline such as help desk, desktop support, and application maintenance functions. Others have sustained – such as application development, database administration, network operations, and disaster recovery.  Here are few more of their findings for 2015/2016:

why-outsourcingWhy You Should Be Outsourcing

For many organizations, the goal of an IT outsourcing strategy is to provide the best possible technology to their organization at the lowest possible cost. Here are some of the reasons that companies/entrepreneurs are choosing to outsource their IT program.

Whether outsourcing for short term or long term strategic objectives, CEO’s and business owners need to realise that this is a continuous process that requires constant evaluation in an ever evolving market.

RiskThe Risks of Outsourcing

Is outsourcing your IT functions suitable for your company?  In a recent data systems article , outsourcing IT functions is not for everyone.  While you may save money, the relationship may fail if the company you outsource to has little to no domain experience, your management has no project management (working relationship between outsourced team and in-house assets) or no scalability to match the size of your company.

The following are some potential risks to IT outsourcing:

Liability. Allowing access to classified [or proprietary] company data and information can be a potential risk for a company. With the assistance of legal counsel, proper measures should be taken to protect the integrity of the data. Companies, no matter what size, must negotiate enforceable contracts that govern every aspect of the relationship.

Language/cultural barriers. These can affect both employees and customers, especially when clear explanations of the problems and solutions are required. Need to ensure all requirements are spelled out as well as hiring multilingual employees

Different time zones. This can act as a barrier to communication and coordination with the hiring company.  Shift work is the most common adjustment.

According to Yvonne Lederer Anotucci in her article “The Pros and Cons of IT Outsourcing,” business owners who consider outsourcing IT functions need to be aware of the following risks:

Managing successful working relationships with your IT service providers can be tenuous, but with the right manager factoring out the human variable, the risks of control, morale, and contracts can be mitigated with some of these tips:

Practically all risks are avoidable if you know what to look for in a vendor. By starting early and asking the right questions you can achieve the objectives for your business. Then analyse whether outsourcing all or part of an IT team is the answer.

yempobenefitsBenefits with Yempo Outsourcing

So what is it that makes outsourcing with Yempo beneficial? As we’ve covered throughout, costs are the most common reason for outsourcing as salaries in the Philippines are a fraction of those in the Western nations. This represents a bottom line saving for your employment, office accommodation and ancilliary costs.  Other factors for consideration are extending your hours of support or service beyond the business hours in your home location, and tapping into a broader talent pool.

At Yempo – we keep it simple for you.  We recruit staff exclusively to meet your requirements and involve you in the interviewing process. Once hired, the staff behave just like your own human resources except we take care of all the local staffing, pastoral care and compliance matters. Concerns such as payroll, taxes, and performance management are all covered by us.

We mitigate your risk by enabling you to terminate your arrangement with Yempo at any time with 30 days notice, and provide all the office and IT infrastructure your employees need to perform. All you receive from us is one invoice per month in your currency, with exchange rates fixed for year.


We’ve walked you through the basics of IT outsourcing, the type of IT outsourcing, fluctuations over the years, as well as this risks and reasons for outsourcing.  With the right planning, your objectives, concerns and risks can all be effectively managed and mitigated, thus giving your company a flexible and strategic resourcing model that can expand and contract according to your individual requirements.