Being made an executive decision, you perhaps enjoyed the thinking of freelancing from some segment of your dealing. The benefits seem obvious, touted by experts across numerous industries as the answer to cutting costs for business functions ranging from information technology to accounting, marketing and human resources; it seems possible that you could run an entire company without ever hiring a single employee.
But is there more to outsourcing than the bottom line? What are the other reasons companies choosing this route? What about ramifications for aspects of your business that are not so easily quantified?
In this article, we’ll discuss the outsourcing Risks and Benefits, specifically as they relate to information technology (IT). And, as a bonus, we’ll provide some tips to help you manage successful relationships with your IT service providers (whether they are full-time staff, or outsourced).
Last Year, IT Market found outsourcing integration challenges multiply, production workloads and enterprise systems hit the cloud, and security hit the top of the agenda.
So what’s up to in 2017? Uncertainty for one thing. Industry watchers expect a number of shifts in the IT and business process services space — not least of which will be the initiation of more flexible outsourcing terms as the world watches and waits to see what happens once president elect Donald Trump takes office and Brexit takes hold.
So here I can suggest few risk based on researches;
- Risks you can think
According to Yvonne Lederer Anotucci in her article “The Pros and Cons of IT Outsourcing,” business owners who consider outsourcing IT functions need to be aware of the following risks:
- Some IT functions are not easily outsourced. IT affects an entire organization; from the simple tasks employees do every day to the complex automated aspects. Be sure the outside vendor is qualified to take care of your greatest needs.
- Control may be lost. Critics argue that an outside vendor will never be as effective as a full-time employee who is under the same management as other employees. Other concerns include confidentiality of data and disaster recovery. However, a supervisor that is knowledgeable in managing an IT staff member will usually be required.
- Employee morale may be affected. This is particularly true if you will be laying off employees to replace their job functions with an outsourced firm. Other employees may wonder if their job is at risk, too.
- You may get “locked in.” If the vendor does not document their work on your network and system, or if you’ve had to purchase their proprietary software, you may feel like you can’t go anywhere else or take back your network. Many outsourced companies require you to sign a year to year contract which limits flexibility.
Most of these can be avoided altogether if you know what to look for in a vendor and ask the right questions. Wondering how your current or prospective IT service provider stacks up?
- Benefits may you think
As got understanding by Risks then we can think about “Benefits” by outsourcing.
- Control IT Costs Outsourcing converts fixed IT costs into variable costs and allows you budget effectively. In other words, only pay for what you use when you need it.
- Reduce Labor Costs Hiring and training an IT staff can be very expensive, and temporary employees don’t always live up to your expectations. Outsourcing lets you focus your human resources where you need them most.
- Trained, Experienced, Qualified, Certified. If you’re not IT trained, how do you assure an employee is qualified? Certifications like Microsoft Certified Systems Engineer (MCSE) are important, but so is experience.
- Qualified doesn’t Equal Experienced Few problems are new for leading IT service companies, which see related problems multiple times. An in-house IT employee leads an isolated existence no matter how much they train. We’d all rather an experienced doctor; the same is true for IT.
- Increase Efficiency and Competitiveness Organizations that try to do all IT Services in-house themselves can have much higher research, development, and implementation time, all of which increase costs and are ultimately passed on to customers.
- Quickly Implement New Technology A quality outsourced IT service organization will have the resources to start new projects right away. Handling the same project in-house might involve weeks or months to hire the right people, train them, and provide the support they need. For most implementations, quality IT companies will bring years of experience in the beginning saving time and money.
- Stay Focused on Your Core Business Businesses have limited resources, and every manager has limited time and attention. Outsourcing can help your business stay focused on your core business and not get distracted by complex IT decisions.
- Reduce risk Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions, and technologies all change very quickly. Outsourcing providers assume and manage much of this risk for you, with specific industry knowledge, especially security and compliance issues. They generally are much better at deciding how to avoid risk in their areas of expertise.
- Level the Playing Field Smallest businesses can’t afford to match the in-house support services that larger companies maintain. Outsourcing can help small companies act “big” by giving them access to the similar technology, and expertise that large companies enjoy. An independent third party managed cost structure and economy of scale can give your company a competitive advantage.
- Compliance and Security Is your firewall up to date? Do you have a DMZ installed? Do you audit your Workstations and Servers? Has your company implemented PCI security standards and work to maintain those standards? For example, Businesses have more ways than ever to prosper by taking many forms of payments such as Credit and Debit Cards, Gift Certificates, E-Checks, Wire Transfers to name a few, but with these forms of transacting also comes the need for due diligence. By outsourcing a qualified Manages Services company who is familiar with PCI Compliance standards you can rest assured that your company is minimizing the risks associated with maintaining client data, credit card numbers, sensitive competitive information and more.
- Choice is yours
As you evaluate your choices and decisions in outsourcing different components of your operations, you will need to consider the advantages of outsourcing. When done for the right reasons, outsourcing will actually help your company grow and save money. There are other advantages of outsourcing that go beyond money.