Majority of businesses today  highly depend on technology to perform day-to-day routines. This shows that IT (information technology) is one area that every company should allot a certain amount of the budget to ensure unwavering support to all business activities. At times, companies do not notice that their IT costs have quickly increased within a short span of time.

IT costs can go out of control if not properly managed. This is why small businesses must keep an eye on the IT area and do something to reduce the costs. However, cutting back IT costs should never compromise the efficiency of the department. One solution that many small businesses adapted to ensure efficiency and minimize IT cost is outsourcing.


What is Outsourcing?

Outsourcing means hiring a third-party to perform certain business tasks, instead of employing in-house staff to do the services. Two businesses often enter into an agreement wherein an exchange of payments and services take place. The agreement is usually contract-based and may be renewed if the service is still needed, or if the outsourcing firm shows great competencies in helping the business grow. By means of outsourcing, the business transfers the responsibility for a certain function in an external organization and paying them in return. Outsourcing is not limited to domestic contracting. As a matter of fact, several businesses hire overseas outsourcing firms to find the most ideal staff for the service needed.

Common Managed Services

Numerous managed service providers have emerged today offering varied services. Manage services are common to various small businesses wherein they outsource their daily management processes and responsibilities as a strategic way for reducing expenses and improving overall business operations. Here are some of the most common managed services:

– Human Resource Functions
– Accounting
– Virtual Assistant
– Information Services

  • Database Backup
  • Data Recovery
  • Desktop Services
  • Security
  • Storage
  • Help Desk
  • Network Management
  • Management Information Systems

– Call Centers
– Facilities Service
– Office Systems Services
– Business to Business Integration
– Supply Chain Management Services

Outsourcing IT costs

Now the question is, how does outsourcing helps reduce IT cost? It is very apparent that outsourcing brings remarkable benefits, especially to small businesses. Firstly, the absence of physical IT equipment in your office suggests that less energy is consumed lowering your electricity bill. Outsourcing helps you limit the number of employees you need in the office; hence a few computer units are needed. In addition, you do not need a large office space to accommodate all the IT devices and equipment.

Secondly, outsourcing has eliminated the risk of sudden increase in IT cost. For instance, if the prices of the IT equipment needed for the managed service suddenly increase within the contract duration, you will not be affected. The rate that you have agreed with the provider is fixed until the end of the contract unless an additional service is acquired.


Outsourcing is a practical option to save cost in different aspects of the business, especially in reducing IT cost. A small business can set a fixed monthly cost for IT management and received unparalleled service. Some managed service providers can even adjust the services offered to match with your budget. With several managed service providers these days, you can easily find which one offers less and can give you excellent support.

Have you tried outsourcing your business service?

Ethan Robinson is an Australia-based online marketing strategist who constantly works with local and international clients. He is currently partnering with US-based Small Business Expo to get more SME owners together and build business-impacting networks.