More and more businesses are turning to outsourcing IT services. They are doing this for cost savings, access to specialized talent, and the ability to stay competitive in a constantly changing digital landscape. But before you make the decision to outsource IT services, it’s important to understand the advantages and risks associated with this option. In this article, I’ll provide you with the best advice on the advantages and disadvantages of outsourcing IT services.
Outsource It If It Is Not What You Do Best.
Peter Drucker has the best answer about outsourcing, “Do what you do best and outsource the rest”. This also applies to information technology functions in your company. Specifically, IT functions can involve a range of operations, from the entirety of the IT function to discrete, easily defined components, such as disaster recovery, network services, software development, or IT help desk.
There are many advantages and few risks to outsourcing a lot of your IT functions. At the same time, you do need to evaluate which IT function to outsource. This could be because of costs, but more importantly it could be because certain of your IT functions may actually offer a competitive edge. Otherwise, look to build a business justification based on the advantages and risks that IT outsourcing can bring to your company.
Some Statistics About Outsourcing IT Services
The best reason to outsource your IT is that a 3rd party technology company can do it better and cheaper than your in-house staff. To explain, Electric, an IT services company, has some fairly compelling reasons why a Small And Midsize Business (SMB) should outsource all or some of your IT functions. Also, I think that these same reasons can apply to large businesses as well for at least some of their IT functions. To illustrate, see reasons below why some businesses are thinking to outsource their IT.
- 53% of SMB owners feel less competitive than larger businesses due to IT costs.
- 43% of cyber attacks target small businesses, but only 14% are prepared to tackle them.
- IT downtime can cost up thousands or even hundreds of thousands of dollars per hour depending on the size of your business.
- 59% of small business leaders find it hard to introduce new technologies.
See the following sections on the advantages and risks of outsourcing your IT functions.
9 Advantages of Outsourcing IT Services
1. Control IT Cost, Cost Savings and Reduced Overhead.
One of the primary advantages of outsourcing IT services is the cost savings that it offers. Specifically, companies can reduce their IT costs by outsourcing IT services, as they don’t need to pay for the salary and advantages of an in-house IT staff. Additionally, they don’t need to pay for the hardware and software associated with running IT operations. Additionally, outsourcing IT services can also reduce overhead costs. This is because companies don’t need to pay for the space, electricity, and other costs associated with running an internal IT department.
2. Increased Efficiency, Productivity, and Competitiveness.
Outsourcing IT services can also help companies increase efficiency, productivity, and competitiveness. For example, companies can benefit from the expertise and experience of an outsourcing provider. This is because they will have access to the latest technology and can quickly and easily implement new solutions. More importantly, this can help companies stay ahead of their competitors and increase their overall productivity.
3. Trained, Experienced, Qualified, Certified.
Outsourcing IT services also ensures that companies are working with professionals who are trained, experienced, qualified, and certified. Moreover, this ensures that the company is working with the best people for the job and that they are getting the highest quality service.
4. Improved Customer Service.
Outsourcing IT services can also help companies improve customer service. By outsourcing IT services, companies can ensure that they are providing their customers with the best possible service and that any IT-related issues are quickly and efficiently dealt with.
5. Increased Security and Compliance.
Outsourcing IT services can also help companies increase security and compliance. By outsourcing IT services, companies can ensure that their data and systems are secure and compliant with industry regulations. More importantly, this helps companies protect their data and systems from malicious attacks.
6. Scalability And Able To Implement Immediately.
Outsourcing IT services can also help companies quickly and easily scale up or down as needed. Hence, this makes it easier for companies to respond to changes in demand and implement new solutions as needed.
7. Reduce Risk and Better Quality Control.
Outsourcing IT services can also help companies reduce risk and improve quality control. By outsourcing IT services, companies can ensure that their IT systems are running smoothly and that any problems are quickly and efficiently dealt with. Moreover, this helps reduce the risk of data breaches and other security issues.
8. Increased Focus on Core Business.
Outsourcing IT services can also help companies focus on their core business. By outsourcing IT services, companies can focus on the areas that they are best at, while leaving the IT services to the experts. Indeed, this can help companies free up resources and focus on the areas where they can be most successful.
9. Quickly Implement Latest Technology.
Finally, outsourcing IT services can help companies quickly and easily implement the latest technology. By outsourcing IT services, companies can access the latest technology and quickly and easily implement new solutions. Absolutely, this can help companies stay ahead of their competitors and ensure that they are using the latest technology.
5 Risks of Outsourcing IT Services
1. Loss of In-House Knowledge and Control.
When outsourcing IT services, there is a risk of losing the in-house knowledge and control of the processes and systems. So outsourcing IT services to a third-party vendor may mean that the organization is no longer in control of the day-to-day operations and processes. This in turn could lead to a lack of understanding and oversight of the IT services.
2. Security Risks.
Security is always a concern when it comes to outsourcing IT services. Specifically, third-party vendors may not have the same security protocols as the organization and could potentially expose the organization to security risks. So it is important that your business takes the necessary steps to ensure that the third-party vendor has adequate security measures in place.
3. Communication and Cultural Challenges.
When outsourcing IT services, there can be communication and cultural challenges that arise. For instance, different countries and cultures may have different approaches to IT services. Also, communication can be difficult due to language, time zone, and other factors. So it is important that your business understands the cultural differences when outsourcing IT services.
4. Limited Flexibility and Responsiveness.
When outsourcing IT services, there is a risk of limited flexibility and responsiveness. In some cases, third-party vendors may not be able to provide the same level of responsiveness and support as an in-house team, which can lead to delays in resolving issues.
5. Cost Overruns.
Outsourcing IT services can lead to cost overruns if your business is not careful. It is important that you have a clear understanding of the costs associated with outsourcing IT services and ensure that your business is not spending more than it can afford. Also, it is important to ensure that your business is getting the best value for its money.
For more information on the advantages and risks of outsourcing your IT functions, see Essents’ The Top 10 Benefits Of Outsourcing IT Through Managed Services, and Neweratech’s Outsourced IT Services. Also for more managing risks, see Unvarnished Facts’ Risk Mitigation For Supply Chains: How To Best Identify, Make Assessment, Overcome.
For more information from SC Tech Insights, see Managed IT Services – SMB / SME Advice On The Best Ways To Outsource, Future of Remote Work and Offshore Vs Nearshore Outsourcing: 11 Practical Decision Factors That Will Help You Make The Best Decision.
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