The pros and cons of IT outsourcing have been debated for many years without a proper consensus ever being reached. However the rise of Cloud computing has changed the discussion somewhat – even non-technical decision-makers are signing up for hosted applications, and are already reaping the benefits of outsourcing information technology.
So what are the factors that you need to consider? For many businesses, outsourcing responsibility for key IT functions is a no-brainer, with concrete benefits:
As businesses try to leverage technology to innovate their business – digital transformation – many find themselves at the bleeding edge. Obviously this provides a competitive advantage, but the skills required to deploy and use bleeding edge technologies are rare – and expensive. Rather than give up on these grand plans however, businesses can choose to outsource the underlying infrastructure, and the human resources required to use it. There will still be an increased cost to this operating model, but wages, National Insurance contributions and benefits packages become the responsibility of the IT outsourcing provider.
Access to more knowledge and experience
Coming back to the here-and-now, IT outsourcing can have a profound effect on operations on-site too. Even your existing systems require skilled engineers and technicians to manage and maintain them – again at significant cost to the company. In many cases however, your in-house IT support provisions are limited by the knowledge and experience of your team, much of which has been acquired working with your systems. Should you choose to deploy new technologies in-house, technical issues may take longer to resolve as engineers are still learning on the fly. One of the benefits of IT outsourcing services is that you gain access to additional experts who can augment your own knowledge and skills. These extra resources can be used to “flood” major problems, arriving at resolutions faster. An IT outsourcer can also call upon the skills and experience they’ve gained from working with other clients.
Despite these major benefits, there are other factors involved it IT outsourcing that need to be considered – and managed:
Loss of control
In order to deliver a consistently high quality service, IT outsourcers will insist on implementing some controls on your systems. These controls depend on the outsourcing providers, but may involve commitment to a specific technology stack, or the implementation of a proper change control mechanism to better manage new developments and deployments. For the CTO used to doing what they want, when they want, these controls may feel restrictive – but most are designed to ensure the highest quality service possible.
Well designed security systems work by ensuring that access to your data is restricted to the smallest number of people possible. Inviting a third party IT outsourced instantly increases that number – and the risk of information security breaches. It is crucial that these risks are identified and mitigated from the outset, or the consequences could be devastating.
When managing IT issues internally, it is relatively easy to prioritise your response – and to track the progress of each. Because your team is generally based on the same site as your end users, response times are generally quite short.
By moving IT support provisions off-site, it is much harder to track progress. There is also a genuine risk that the quality of service could decline if response times increase – at which point any cost savings become moot.
Turning cons into pros
Although potentially serious, being aware of these cons means that they can be mitigated. One of the benefits of IT outsourcing is that you can share the risk with your partner. Defining accountability is more than simply creating service level agreements. Your negotiations must discuss intangibles, like data security, and how your partner will work to protect your business and its assets. Indeed, each of the “cons” outlined here can actually be used to improve the service you receive when addressed properly in pre-contract negotiations.
No “one-size-fits-all” answer
Ultimately IT outsourcing advantages and disadvantages are determined by the specific needs of your business. Where you need to scale quickly, outsourcing IT support provides a convenient way to ensure you have the coverage you need, no matter how quickly you grow – but obviously that doesn’t apply to everyone. And in some very rare instances, businesses may find that their processes and operations don’t align with outsourced IT. The only way to know for sure however is to discuss options with an IT outsourcing provider like Acora.