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What are the Different Types of Technology Outsourcing?

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  • Written By: G. Melanson
  • Edited By: Kristen Osborne
  • Last Modified Date: 17 August 2016
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There are three main types of technology outsourcing for business: technical support, the development of new technology, and the configuration of existing technology. Which type of technology outsourcing a company or organization chooses depends on its goal — whether it’s to upgrade products or services, branch out into vertical markets, or optimize business processes. Although many organizations have at least one IT professional on staff, most choose to outsource projects that require special training or are otherwise not manageable by in-house staff.

Technology outsourcing for technical customer support requires that the outsourced company be fully trained and familiarized with the product or service so they may provide customer support on behalf of the company that’s selling it. For example, a company that manufactures software or hardware might outsource a company that provides technical customer support via call centers. As most technical support can be administered by phone, email, or instant messaging (IM), the outsourced call center will sometimes be located in a different country or even continent. The practice of hiring other companies to provide support to your customers is sometimes referred to as “farming out” the customer service side of the business, and is often a necessity for growing companies.

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Organizations might also choose technology outsourcing when they’re endeavoring to develop a new technology. Typically in this case, the organization has a general idea of what type of technological product or service they’d like to sell or license, but lacks the technological expertise to create such a product or service. For example, if an organization that sells paper decides to branch out into selling paper technologies such as printers and scanners, they may outsource a company that makes these products to design one for their brand. Expanding into complementary or “vertical” markets often requires technology outsourcing, and is a desirable goal for companies that are eager to grow.

Organizations that have been around for some time and continue to rely on old business processes are likely to require technology outsourcing at some point. For example, a government department that’s traditionally used a manual method of processing tax returns might outsource a software company that can configure a special type of software for their department’s unique needs. Some companies specifically design computer software for certain niche industries, such as accounting firms, salons, or government departments, and then configure the software to each client’s individual needs.

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latte31
Post 3

@BrickBack - That is good to know. I know that outsourcing information technology is very common because companies need someone with expertise in this area and they don’t have the time to be bogged down with technical issues. It allows them more time to focus on other business matters.

I used to work for a staffing company that worked with companies that did information technology outsourcing. We would supply a variety of personnel from PC technicians to programmers to high level project managers. The nice thing with hiring project based contractors like this is that the company did not have to pay benefits and would only pay for the work that was needed.

This saved them a lot of money and it also allowed their human resources department to focus on other issues that are more pressing.

BrickBack
Post 2

I also imagine that if there are weather conditions that cause a problem for employees to get to work, the independent contractor can also step in and since they are in a remote location away from the bad weather conditions they could easily support the customer’s employees.

A friend of mine used to work in a call center, and she said that when there were blizzards they would just shut down the call center in New Jersey and used their virtual call center contractors in Florida to take over the call volume.

This was really important because this company offered road side assistance and when there are bad weather conditions the customers need even more support than usual, but because of the weather conditions the local employees could not be of much help.

I know some people feel threatened when there is talk of outsourcing services, but sometimes it is essential especially in this case.

subway11
Post 1

There are a lot of companies that outsource their customer support functions. Many companies find it more cost effective to outsource their customer support to another company that can provide personnel that work whenever the business needs the support.

Some businesses outsources a portion of their call volume to third party staffing companies that provide independent contractors that are trained to do the same job that the employees could do, but they perform their work at home.

These contractors only get paid for calls that are answered and do not receive any benefits. I used to do work for a company that provided independent contractors for companies that outsourced their customer service and technical support functions. It was

really fun because I got to support two different companies and got to choose the hours that I wanted to work.

It also saved theses companies a lot of money because when the calls were idle they did not pay me. Some companies like this model so much that they close down their call center and just use the independent contractors. This can really save the company a lot of money and they could invest those savings in product development.

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