Outsourcing for technology and IT industries

Dec 4, 2014SHORE Blog

The technology and information technology (IT) industries are among the most robust and competitive globally. These industries cover companies that market and sell a broad range of products and services such as computer hardware, software, mobile applications, semiconductors, electronics, telecommunications equipment, and e-commerce, internet and computer services. These products and services call to mind brand behemoths such as Apple, IBM, Microsoft, Google, Samsung and many more. The products we use on a daily basis – laptops, mobile phones, sound equipment, printers and related technology equipment – fall within the technology and IT industries.

Just as other industries take advantage of outsourcing, so too do companies in the technology and IT industries take advantage of outsourcing their services. A 2013 US study found that over 60% of technology companies planned to outsource products offshore in 2014.

While many technology and IT companies outsource their manufacturing processes, a large number resort to business process outsourcing (BPO). The popular processes and functions within knowledge process outsourcing for technology and IT industries include the following:

  • IT services and programming. These cover software, web and mobile application development and testing.
  • Finance and accounting (F&A). The whole range of F&A processes may be outsourced: accounts payable and accounts receivable, bookkeeping, payroll processing, staff expense claims, bank reconciliation, financial reporting, audit services and tax compliance.
  • Marketing, sales and customer relationship management (CRM). Subcategories within this continuum may be outsourced by the technology and IT industries: search engine optimization, outbound sales, appointment-setting, surveying, database validation, lead generation, fulfillment and provisioning, multi-tiered technical support, administrative processing and many other acquisition and retention activities for high-tech products.
  • Research and development (R&D). Since technology and IT industries rely heavily on R&D, some would think that outsourcing it would be like risking a company’s competitive edge. On the contrary, a 2012 study, Global Innovation 1000, found that the computing and electronics industry spent much on R&D, and its relentless drive for innovation was pushing it to outsource R&D offshore. It was discovered that R&D labs and suppliers in one country had too similar knowledge to the R&D units of companies. On the other hand, outsourcing suppliers had different knowledge bases and approaches, and therefore, could innovate better.