What is IT Outsourcing?
Outsourcing refers to using an outside supplier to provide services to a business, rather than using your own employees.
IT outsourcing specifically refers to using outside suppliers for different IT functions such as helpdesk, project management and development work.
There are various reasons you might choose to outsource your IT such as gaining additional skills that you don’t have in-house, completing an important project, saving costs and more.
Different types of outsourcing
Before going into the actual pros and cons of IT outsourcing, it’s important to understand that there are various different outsourcing options to choose from. Rather than putting all types of outsourcing into one big box, there are some big differences between these options that need to be considered.
Individual or Company
The first decision to make is whether to choose a single outsourcer or an entire company.
When talking about outsourcing, the usual assumption is that we’re talking about outsourcing to an entire team. However, it’s also very common for certain IT functions to be done by a single person, like a contractor.
Whichever you choose will depend on the particular task at hand. An individual contractor might be very good at providing a specialised skill that your team don’t currently have in-house. Outsourcing to a company is likely to be a better choice when you need to cover a wider range of skills or you need the reliability of not relying on a single person.
Where to outsource? Local, national or offshore?
The next question is “where on earth?”
Choosing the location of your outsourcing partner is another key decision to make. This will firstly depend on how specialised the task you need to outsource is, but in general, you will be able to choose between local companies, national or offshore.
Tradeoffs between each of these will be covered in more detail in the pros and cons section below. However, one of the key considerations will be the balance between cost and convenience. In general, offshore outsourcing is likely to be cheaper but may have additional challenges with communication, especially with non-English native speakers.
Local businesses have a face-to-face advantage. Some businesses may want a partner who they can meet in person and feel this provides a more personal service. National businesses may offer the advantage of providing excess to a larger team, and greater perceived stability.
With all the options, it’s worth considering which is the most suitable one for your situation and what are the most important factors for you.
Another thing to remember is that technology makes collaborating and working together remotely easier than ever before. This should also be factored into your decision.
Different IT services that can be outsourced
IT helpdesk is one of the most common IT services that can be outsourced.
Your helpdesk or ServiceDesk refers to the technical support centre for your business. It’s where your staff or customers go to get their IT issues resolved.
Having an efficient and helpful IT helpdesk is a vital part of making sure productivity remains high. If people are stopped from doing their work by a technical issue, your business will be losing time and money.
The most effective helpdesks have several levels such as Level 1, 2, 3 and 4, with different staff assigned to each level. This is so urgent or technically complex issues can be escalated up the chain to ensure calls are resolved as quickly as possible and the right people are working on them.
IT Support and IT Managed Services
The next step on from outsourced helpdesk is outsourced IT support and IT managed services.
The clue is in the name. Companies that provide IT managed services look after your IT for you. This includes IT support – helping to get issues quickly resolved. But, it also includes management on a wider scale – looking after all areas of your IT like software, hardware, licenses and security. A good MSP will also provide long-term guidance and strategy to make sure that your IT systems are working in harmony to achieve your business goals.
Projects are another very common area of IT outsourcing. This task is ideal for outsourcing because you can bring in a team with the ideal skills to complete the project, for the amount of time you need.
The best companies will have a good track record of delivering projects to scope and on time, giving you the reassurance that your project will be a success.
Development is another example of IT outsourcing. Whether it’s a new app, adding new functionality to improve productivity or joining disparate systems together, development is another key part of IT.
As with projects, outsourcing your development work gives you access to a team of specialists, just for the right amount of time it takes to complete the development project.
Advantages of IT outsourcing
When it comes to outsourcing, cost-saving is probably the first advantage that comes to mind.
It’s easy to see why. Employees are expensive and often for less than the cost of one staff member, you can get access to an entire team.
With offshore outsourcing, it’s possible to reduce costs even further. However, you want to balance this with any possible communication issues that may arise. See the ‘communication’ section under ‘disadvantages’ for more details.
Skillset is another key advantage.
You may not have a particular skill in-house. Outsourcing gives you access to qualified specialists in all areas of IT so you can pick the exact company or individual you’re missing and immediately improve your business.
No single point of failure
If you’re using a team of outsourcers or an outsourcing company, one of the great advantages is that you’re not reliant on a single person.
For example, if your IT manager or developer goes off sick, work grinds to a halt. If you have a team of specialists to rely upon, this will never be an issue.
Flexibility and scalability
Flexibility and scalability are further great advantages of outsourcing. You can quickly add skills as you need them. If you suddenly get a large project for a key client or a sudden rush of work, you can quickly scale to meet the demand.
Reduce office space and utilities
Rising utility costs and hybrid working are two hot topics at the moment. Businesses are looking to reduce the cost of running their offices wherever possible. Outsourcing is perfect for this because you remove the need for additional office space and any associated costs when someone work’s remotely.
Disadvantages of IT Outsourcing
In terms of concerns over IT outsourcing, security is often top of the list.
Some businesses are reluctant to give companies or individuals access to their internal systems, intellectual property and confidential information, for fear of them misusing it.
The key thing here is to make sure to use a reputable and established IT outsourcing company and provide clear guidelines at the start of any contract.
Being able to communicate effectively is a vital part of any team. Having team members that aren’t located in your office poses a potential challenge to this.
If your outsourcers are located offshore and don’t speak English as their first language, this provides another potential communication barrier.
Be sure to interview any outsourcers carefully and make sure they’ll be able to integrate well with your existing team.
Loss of control
The final disadvantage is a perceived loss of control that comes with outsourcing. Some businesses have concerns that delegating parts of their business makes them harder to manage and oversee than keeping them in-house.
As mentioned above, the most important thing is carefully choosing your outsourcing partner and trying to foster a synergistic relationship where everyone works together with good communication throughout.
Alternatives to outsourcing
Outsourcing won’t be right in every situation for every business. In some instances, it may be better to bring certain IT functions back in-house. This is called insourcing.
Perhaps you realise you need a closer level of communication or control that wasn’t possible through outsourcing. This also shows that there’s always the option to change your mind after outsourcing if you need to.
Let’s not forget that it’s rarely a fully ‘yes’ or ‘no’ answer to whether you should outsource. Sometimes the best option is to carefully mix your in-house skills and complement these with some external outsourcers.
One of the key things to remember with all of the points above is the importance of strong leadership and good communication.
If all members of your team, whether internal or external, are clear on their goals and the overall company aims, you’re much more likely to find success with your outsourcing efforts.
Outsourcing hardware and systems
The points above mainly relate to outsourcing IT tasks and functions. However, another huge area of outsourcing is hardware and systems.
We are in the cloud technology era. There are often numerous benefits to moving some or all of your IT systems away from your physical premises.
This is a huge topic and if you want to find out more read the following blog post – The Cloud Computing Paradox – How to avoid getting stuck paying too much for the wrong cloud services.
Recommendations and summary
IT outsourcing can provide huge benefits such as reducing costs, increasing flexibility and giving your company access to a wider range of skills.
However, any decision to outsource needs to be made carefully, matching the type of tasks and your requirements to a company with the skillset, size and location that suits you best.
Make sure to choose wisely and select a company that has a proven track record of providing excellent service in the area you need.
If this article has sparked your interest in IT outsourcing and you would like to find out more, contact the Coretek team to see if we would be a good fit for you.
We have a great track record of helping organisations with IT support, managed services and development for over 23 years and we can fit in seamlessly with your team as “an extension to your business”. Get in touch today to book your call.