Businesses across the country have probably at one time or another considered IT support from an external provider. The benefits of outsourcing seem obvious and have been discussed far and wide. But is there more to outsourcing than the bottom line? What are the main reasons companies choose this route? Here, we simplify outsourced IT support into 3 areas: the reasons, the risks and the rewards.
The Reasons
According to IT firms up and down the country, there are many reasons why companies outsource.
Reduce and control operating costs
When you outsource your IT Support, you eliminate the costs associated with hiring an employee, such as management oversight, training, health insurance, employment taxes, retirement plans etc.
Improve company focus
It is neither practical, nor possible to be a jack of all trades. Outsourcing lets you focus on your core competencies while another company focuses on theirs.
Gain access to exceptional capabilities
Your return on investment is so much greater when you outsource information technology to a firm that specialises in the areas you need. Instead of just the knowledge of one person, you benefit from the collective experience of a team of IT professionals. Outsourced IT companies usually require their IT staff to have proper industry training and certifications as well.
Free internal resources for other purposes
You may have someone in your office that is pretty good with computers or accounting, but most likely these were not the jobs he or she was hired to do. If they are spending time taking care of these things, who is doing what they were hired to do? Outsourcing allows you to retain employees for their highest and best use, rather than wasting their time on things that may take them longer than someone who is trained in these specific areas.
Resources are not available internally
On the flip side, maybe you don’t have anyone in your company who can manage your IT needs, and hiring a new employee is not in the budget. Outsourcing can be a feasible alternative, both for the interim and for the long-term.
Maximise restructuring benefits
When you are restructuring your company to improve costs, quality, service, or speed, your non-core business functions may get pushed aside. They still need to be handled, however, and outsourcing is an optimal way to do this. Don’t sabotage your restructuring efforts by failing to keep up with non-core needs.
Function difficult to manage or out of control
This is definitely a scenario when outsourcing to experts can make a big difference. But don’t make the mistake of thinking you can forget about the problem now that it’s being “handled.” You still need to be involved even after control is regained.
Make capital funds available
By outsourcing non-core business functions, you can spend your capital funds on items that are directly related to your product or your customers.
Reduce Risk
Keeping up with technology required to run your business is expensive and time consuming. Because professional outsourced IT providers work with multiple clients and need to keep up on industry best practices, they typically know what is right and what is not. This kind of knowledge and experience dramatically reduces your risk of implementing a costly wrong decision.
The Risks
Anytime you give someone else responsibility for an aspect of your business, whether a full-time new hire or an external provider, there is risk involved. Did I hire the right person/company to do the job? Will they do what they are supposed to do? How will they “fit” with existing employees or departments? These are the questions that nag owners of small businesses when handing over the reins to a new employee or provider.
Some IT functions are not easily outsourced
IT affects an entire organisation; from the simple tasks employees do everyday to the complex automated aspects. Be sure the IT supplier are qualified to take care of your greatest needs.
Control may be lost
Critics argue that an external provider 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 IT provider 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.
The Rewards
Still not sure whether to outsource you IT Support or not? There are many rewards you can expect when you outsource your company’s IT functions as well…
Access to the latest and greatest in technology
You may have noticed how rapidly software and hardware becomes obsolete in this industry. How is one staff person going to keep up-to-date with everything? Outsourcing gives your business the benefit of having more than just one IT professional. And since it’s the core competency of the company, they can give you sound advice to put your IT dollars to work for you.
Cost savings
Outsourcing your IT services provides many financial benefits to your business such as leaner overhead, bulk purchasing and leasing options for hardware and software, and software licenses, as well as potential compliance with government regulations.
High quality of staff
Since it’s their core competency, outsourced IT suppliers look to hire staff with specific qualifications and certifications. You may not know what to look for if you’re hiring someone to be on staff full-time, so you may hire the wrong person for the job.
Flexibility
External IT providers have multiple resources available to them, while internal staff may have limited resources and capabilities.
Job security and burnout reduction for regular employees
Using an outsourced IT company removes the burden from your staff who has taken on more than he or she was hired for because “someone needs to do it”. You will establish a better relationship with your employees when you let them do what they do best and what they were hired to do.
Conclusion
Now that you have seen the risks and rewards associated with outsourcing the IT function of your business, there is a lot to think about. Whether you choose to outsource or hire internally, one thing is certain, you must know how to manage successful working relationships with your IT service providers.