If you’re looking for a way to improve your company’s IT investments and strategy without growing the size of your team and bloating your payroll, outsourcing could be a good option. But before you go any further, it’s important that you understand how you would manage this outsourced IT team.

Why Outsource IT?

Outsourcing is common in almost every industry and area of business. You see it with other aspects of business, such as accounting and customer service. You also see it in unrelated industries. For example, real estate investors commonly outsource property management to another company. The question is, why?

The benefits of outsourcing are multiple (and the cons are minimal). For starters, it reduces and controls operating costs.

“Outsourcing is often cheaper than hiring on an employee, and it also takes away some level of uncertainty about costs,” business consultant Marty Pine writes. “The contract will determine exactly what will get done and for what price.”

Outsourcing also benefits organizations by allowing them to focus on more important core tasks. While IT strategies and initiatives certainly support your larger mission, they aren’t your core responsibility. By outsourcing, you’re able to focus on product development, innovation, and sales, while leaving the details of IT up to another business that focuses on this aspect of operations.

Common Outsourcing Options

When it comes to outsourcing your IT, there are generally three different setups to choose from:

• Offshore. With offshore outsourcing, you typically work with a partner that’s located in another part of the world. If you’re located in the United States, this would mean hiring an outsourced IT partner from somewhere like India, The Philippines, or Eastern Europe. Offshore IT outsourcing costs pennies on the dollar, though you’ll have to deal with certain barriers (like time zones, languages, and differences in business customs).

• Nearshore. While still technically out of the country, nearshore outsourcing is where you hire an international organization that’s in a comparable time zone. For North American businesses, this looks like partnering with a company in Central America or South America. Nearshore gives you the best of both worlds. You get the convenience of a similar time zone, while still enjoying an affordable price point.

• Onshore. The final option is onshore outsourcing, which is where you hire a company located in the same country as your business. The benefit here is that you get someone who speaks the same native language, understands proper business customs, and works in the same time zone. 

Within each of these categories, you have established companies that deploy their employees to work on your account, as well as freelancers and independent contractors who manage themselves. Generally speaking, you get greater reliability and accountability when working with an outsourced IT company (whether offshore, nearshore, or onshore).

5 Tips for Hiring and Managing Your Outsourced IT

Want to kill it with outsourced IT and get maximum results from your investment? Whether you’re syncing up with an offshore, nearshore, or onshore IT partner, the following tips will serve you well:

1. Treat it Like a Full-Time Hire

The problems most companies encounter with outsourcing can usually be traced back to lackadaisical hiring. And if you want to avoid these same mistakes, you should treat every outsourced partnership like you’re hiring a full-time employee for your business.

When you hire a full-time employee, you accept applications, filter out the ones that are not qualified, interview applicants, check references, conduct more interviews, etc. You need to use this same approach. While it requires more of your time, it’ll save you invaluable resources in the long run.

2. Rule Out the Low Bidders

Since one of your primary goals with outsourcing is to cut costs, it’s tempting to go with the lowest bidder. However, pricing is usually a pretty good indicator of quality in this arena. Cheaper is rarely better. (This doesn’t mean you have to select the most expensive option, but go ahead and nix the cheapest.)

3. Look for Culture Fit

There are often cultural differences when you outsource. (That’s simply what happens when you work with people from other parts of the world. And, to be quite frank, these cultural differences can be a good thing for you.) But it’s important that you find people who are a good culture fit for your business.

What’s the distinction, you might ask? Someone who is a culture fit has the same principles as your team. If your team prioritizes hard work, ethical interactions, and self-starting, you want to hire outsourced IT help that fits this description.

4. Be Clear With Your Scope and Expectations

Over-communicate everything, particularly in the early stages of working together. Be very clear with your scope and expectations. Provide step-by-step directions if necessary.

You’ll feel like you’re micro-managing, but this is part of the initiation process. You’re learning how each other works. If you aren’t clear with scope and expectations, you’re setting your new IT partner up for failure.

5. Set and Track KPIs

Finally, set very clear key performance indicators (KPIs) and metrics - and be sure that both parties are aware of what they are, how they’ll be tracked, and what the target thresholds are. This gives you something objective to measure performance on. If KPIs aren’t being met, you’ll need to make some sort of change to get things back on track. If KPIs are being reached/surpassed, this is a sign that you’re in good hands.

Hire Slow, Fire Fast

There’s a saying in business that you should be slow to hire and quick to fire. And this might be the single best advice you’ll get in terms of managing an outsourced IT partner.

When searching for an outsourced partner to work with, you’ll inevitably run across a lot of impressive companies and candidates. Many of them will seem like the real deal - offering top-notch service, incredibly focused expertise, and a low price point - but few actually live up to their own hype. The only way to know if they do is to test them.

If possible, do a few isolated projects with different IT companies. Quickly filter out the ones that don’t pay attention to details or provide real value. Then, after you’ve put candidates through the ringer a few times, eventually partner with the one that’s a good fit.