From Cost-Cutting to Competitive Advantage: The Strategic Role of IT Outsourcing

March 23, 2023 7 min
Should they stay or should they go? Having a strong IT team to support your company as it expands is critical to business success, but where that team sits can often be a difficult question to answer. To outsource or not is a frequently occurring line item on many board meeting agendas, particularly for those companies expanding into the Asia-Pacific (APAC) region.

Many APAC countries, including China, have been increasingly opening their doors to foreign businesses, making entering their burgeoning markets easier and more attractive. As more Western companies open shop in these countries, experience is making a strong case for partnering with local IT teams, rather than trying to build an in-house IT department.

What are some reasons for outsourcing IT functions in your APAC-based operations?

The APAC Region is a Hub of IT Excellence

In recent years, countries like China, India, South Korea, and Singapore have made significant investments in their IT infrastructure, education, and training, resulting in a growing pool of skilled IT professionals with expertise in everything from cybersecurity, infrastructure set-up, and software development, to programming and data analysis.

With all of this skill and expertise available to you on the ground locally, it is unnecessarily costly and ineffective to bring it with you. It makes more sense to tap into the pool of local talent through external partners.

It Makes Money Sense

One of the primary benefits of outsourcing your IT function in the APAC region is cost-effectiveness. Through outsourcing, you will ensure lower infrastructure costs such as setting up and maintaining servers, obtaining software licenses, and other hardware and software by using providers who already have these resources in place and who have established supply chains that offer them at competitive pricing.

You can also have access to specialized expertise without the cost of hiring and training your own staff.

Add to that the lower cost of labor and operational expenses in most APAC countries, and these IT service providers can offer rates that are up to 20-30% lower than in Western IT outsourcing destinations for the same type of service.

You Can See Them But You Can’t Catch Them - APAC’s Top IT Talent is Not Really for Hire

APAC countries offer a large pool of skilled and experienced IT experts allowing your business to tap into the expertise of top developers, engineers, and other IT professionals with specialized skills. However, the demand for this type of talent continues to grow as businesses across all industries increasingly rely on technology to drive innovation and growth.

This high demand can make it difficult for companies to find and hire qualified IT professionals for in-house teams. Increasingly the best way to access the top IT talent the APAC region has to offer is through partnering with a trusted outsourced operation.

Been There, Done That: Outsourced Partners Have Strong Track Records

Given the rapid influx of foreign businesses into APAC countries, many other companies have experienced the challenges of setting up IT infrastructures in a strange new world. The good news is that now there are local partners with a proven track record of delivering high-quality, cost-effective IT solutions to these companies.

Outsourcing your IT function to these providers means you benefit from the learning curve of others and enjoy their wealth of experience in dealing with challenges identical to yours.

Loosey Goosey - Keeping Your IT Functionality Flexible

Your business’s life cycle determines your IT needs, and these can fluctuate wildly from start-up through to maintaining or re-innovating. Outsourcing gives you the flexibility to access different services and skills when needed, and stop paying for them when you don’t.

By partnering with an external service provider, your company can tap into the expertise of specialists such as software developers or cybersecurity professionals who may only be needed at specific points in your company’s growth, while also utilizing the day-to-day functions you consistently need.

This kind of flexibility also means your business can quickly adapt to new technologies or changing market conditions, without having to invest in training or hiring new staff.

Improved Quality

It Only Gets Better: Improved Quality with IT Outsourcing

Contrary to the usual concerns about dropping standards when outsourcing core business functions, outsourcing your IT function in the APAC region most often leads to improved quality in your infrastructure and processes.

With access to top talent, proven processes, and quality-focused approaches, local IT service providers deliver advanced, cutting-edge solutions with efficient and trust-worthy supply chains.

And because of deep local knowledge and expertise, these outsourced partners are also able to provide solutions that are compatible with local infrastructure, processes, and legislation.

Stronger, Faster, Higher: Increasing Efficiency through IT Outsourcing

There are several ways in which outsourcing IT support leads to improved efficiencies, including:

  • By outsourcing your IT function to a local APAC partner, your business can free up its internal resources to focus on core business activities and improve productivity and efficiency.
  • Outsourcing means you don’t have to keep recreating the wheel. IT support partners will have the expertise and experience to handle complex issues that are novel to your business, but not to them, allowing them to provide quick solutions.
  • The right local partner can help you streamline IT workflows. They can help to automate processes and implement best practices, which can help to reduce errors and improve efficiency.

ScalabilityBig, Bigger, Biggest - Outsourcing Improves Scalability

For a business to be scalable it must be able to adapt to changes in demand, expand its operations, and handle an increased workload - all without sacrificing quality or efficiency.

Outsourcing your IT function can assist in doing this by providing your business with access to a larger pool of skilled professionals and technology solutions, enabling you to handle increased workload and demand, without being hindered by your current resources or infrastructure.

Outsourcing IT functions can help your business quickly scale its operations up or down as needed, providing it with the necessary flexibility to adapt to changes in demand, expand its operations, or pivot its business strategy.

Keeping Up with the Jones’ - IT Outsourcing Gives You Access to New Technologies

Given the role of many APAC countries in the hi-tech revolution, the region’s IT partners are quick to identify and adopt new technologies and trends. Outsourcing your IT function means that your hardware, software, cybersecurity, and processes will always be up-to-date and you will have access to cutting-edge technology solutions. This can help your company stay competitive and enhance your operational capabilities.

Staying on the Right Side of the Law: Neither the Victim nor the Criminal Be

With the increasing number of cyber threats in the APAC region and China, including cyber espionage, it is more important than ever for companies to ensure they protect their systems and data.

To do this effectively it is important to understand the local threat landscape, the modus operandi of cybercriminals operating in the region, as well as to keep updated with their changing tactics and methods. Unless you have the capacity to employ such specialized expertise in-house, outsourcing this function is the only way to tap into this skill.

The same is true regarding remaining compliant with local regulations and laws. Many APAC countries have complex and strict regulations regarding data privacy, cybersecurity, and system safety. Local IT service providers are familiar with local regulations and can help foreign companies navigate this complex regulatory environment.

Bringing the Outer Circle In: Outsourced Doesn't Have to Mean Alone

Outsourcing your IT functionality when expanding into the APAC region has many direct benefits for your business. Choosing a team external to your operations doesn’t mean you have to be another anonymous client. QTS Global partners closely with businesses, bringing all the benefits of an in-house team along with the advantages of outsourced operations.