The Benefits Verses The Risks of Outsourcing IT Systems & Services

Are you thinking about outsourcing an IT service or system? If yes, do evaluate the various benefits and risks that go hand in hand with IT outsourcing.

Today most large, mid-size and small organizations decide to outsource IT services or systems to stay competitive. However, the option of outsourcing comes with some proven benefits and not so obvious risks as well. If your enterprise is keen on outsourcing IT, it would be probably be a good idea to carefully analyse the risks and benefits, plan out possible measures to attenuate the risks and prepare your in-house resources for the change that outsourcing brings.

Here are some benefits and risks that your enterprise needs to be aware before you outsource IT services:

The Benefits

1.Minimize current cost

Reduced cost is the most compelling reason why most companies choose to outsource IT. With outsourcing, the capital outlay can be successfully controlled. If you opt for in-house IT services, your enterprise will be incurring fixed cost. However, by outsourcing, either onshore or offshore, the same fixed costs are converted into variable ones. This will free up your capital for use in other areas of your business. Not only will this make your business more appealing to investors, it will also give you the freedom to invest your capital into areas that will bring in direct revenues.

2. Control expenses

If your business chooses to perform every operation internally, then the expenses associated with each activity has to be passed on to the customers. On the other hand, outsourcing IT services to a service provider that specializes in business networks and support will alleviate some of your expense, while giving your enterprise a competitive edge when it comes to the pricing of your services and goods.

3. Increased focus on core operations

Through outsourcing IT services, your managers can completely focus on the core objectives and goals of your business. If IT services are performed in-house, some of your managers may have to split their time between activities that engage prospective customers and concerns around operations, leaving less time for core business objectives. Outsourcing erases this necessity and enables managers to shift all their time and energy into core business competencies.

4. Compete with large businesses

Large businesses have the required resources to maintain cutting-edge services and systems by themselves. The same cannot be said of small to mid-size businesses. Small and medium sized business very often do not have the required resources or budget to implement IT systems and services on their own. Outsourcing IT services bridges this gap and creates a more equitable playing field between large and small enterprises.

The Risks

1. Loss of productivity during downtime

If your business relies on an external IT service, you may run the risk of downtime, especially during system failures. This may lead to loss in productivity. At times, it could take several days for an IT service provider to devote attention to your business problem and resolve the issue. This could impact your enterprise, by keeping your resources idle and costing your thousands of dollars in lost revenue.

2. Lack of personal touch

In outsourcing, your business can experience a loss of personal touch. For instance, an in-house network administrator will become familiar with the unique characteristics and eccentricities of the network that he has to manage. Because of this day-to-day interaction, he will be able to deliver results more quickly, efficiently and personally. In comparison to this, IT outsourcing cannot offer this kind of personal touch that can come only with in-house IT professional.

3. Sub-standard security protocols

If you are keen on outsourcing IT services, you must check whether the service provider uses robust security measures. This is very important when dealing with an offshore service provider. While most service providers use impressive security protocols, there is always a risk of a security breach. You must also investigate if the foreign country that you wish to outsource to has laws in place to safeguard intellectual property and other such private data.

Find out what IT services can be outsourced.

Interested to know more?

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2 thoughts on “The Benefits Verses The Risks of Outsourcing IT Systems & Services

  1. Very true….all these are the actual benefits of outsourcing the projects. The most important is the reduction is the expenses as well as 24 X 7 availability.

  2. I liked that you mentioned hiring training an IT staff can be very expensive. My husband is looking for advice about how to improve his It services, and we are looking for advice. I will let him know about the benefits of outsourcing his IT services to help him decide.

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