Types of IT Outsourcing

There are a number of different IT areas that can be outsourced depending on an organisation’s requirements and size. IT outsourcing agreements may include all of an IT department, or just particular areas.

Helpdesk or first-line support

The IT helpdesk acts as the first-line or support function of a company. Employees who are having technical problems can phone the helpdesk and expect support in order to resolve their issues.

The helpdesk can either be a support desk in-house (if the size of the company warrants this) or off-site at a suppliers’ premises.

Any employee within the company can phone the support desk at which point the call will be logged or registered. The purpose is to find out whether the problem is a hardware, software or network problem and whether it can be resolved over the phone or whether an engineer will be required to go on site and fix it. This is to make sure that the right resources are allocated to fix a particular problem or if the problem is simple then the helpdesk can often resolve this over the phone


A part of the agreement may be to install new equipment or IT functionality as and when required and to ensure that users are trained and confident with the new systems.

Software support

The role of software support is to allow end users to contact a support line to solve a problem, generally over the phone. If not, then an engineer may go to the user to fix the issue, or access the faulty system remotely and solve it.

Hardware support

Hardware support enables end users to have any hardware problems fixed, such as a faulty PC or printer. This will generally mean that an engineer needs to come out to visit the user to fix the problem.

Some agreements specify that a certain amount of ‘hot-swaps’ must be available. A hot-swap is a spare piece of hardware, whether a PC, server, printer or even a network card that is swapped with the user’s hardware in order that they are able continue working quickly, rather than waiting for the engineer to fix the problem or order the relevant part.

Software development

Software development is increasingly being outsourced or ‘off-shored’, with teams (the people who write and design software) based in areas such as Central or Eastern Europe and Asia where there is access to highly educated, well trained personnel whose wages are essentially lower than in Western economies.

It is also far more productive and effective to have a team of people used as and when needed rather than having full time developers being paid even when they are not required as can often happen with software development projects. In fact the majority of software vendors have software developers based outside of their country for this very reason.

Data centre

Generally, only large companies have data centres, which is a facility used to keep all computer systems and telecommunications systems in one place. These facilities sometimes require a great deal of space and resources such as people with the right technical expertise to support them.

Data centres are used for systems that are ‘mission critical’ i.e. systems that must work 100% of the time as any failure can cause the company irreparable harm. Banks, for instance, rely heavily on data centres as any computer failure can potentially cost them billions of dollars every day.

These centres require a great deal of support as they may comprise of several different types of hardware, operating systems, software and often ‘legacy systems’. Legacy systems are old computer systems and applications that an organisation does not wish to replace, often on the basis that ‘if it isn’t broken then don’t fix it’, or the costs would be prohibitive to do so.

Data centres also tend to have a wide range of equipment and software and being able to have the resources to support the whole range can be expensive.

Legal issues

You have to keep a number of key business issues in mind when outsourcing, especially when it comes to personnel and their contracts of employment and their legal rights. This is encompassed by a piece of legislation entitled Transfer of Undertakings (Protection of Employment) Regulations 2006 or TUPE as it commonly known.

In summary, TUPE ensures that:

  • Employees are not dismissed before or after any BPO agreement is in place. This means that BPO cannot be used as an excuse to make personnel redundant.
  • Employees are informed and represented throughout the process.
  • Employees’ rights are not affected by the BPO, i.e. their salaries and packages must not be worse. This includes pensions and pension rights, holidays etc. In essence, employees’ terms and conditions must remain the same.

If these regulations are not adhered to, and an employee is dismissed as a result of the BPO, then this will be regarded as unfair dismissal and the company may be held legally liable.

The link below may be useful for companies seeking further information and it is highly recommended that a specialist lawyer be involved at some point.


What type of companies would benefit from IT Outsourcing?

Most companies can benefit from some form of outsourcing but many are not inclined to do so because they perhaps feel uncomfortable with contracting key functions to a third party.

The key to IT outsourcing is to ask the following questions:

  • What is crucial to the business in terms of technology, implementation, strategy, and support?
  • What are the areas or functions that are currently not effective?
  • Would using an outsourcing company improve or resolve any of these issues?
  • What are the risks?