A Guide on IT Outsourcing: Is It the Right Choice for You?
Specialized departments like HR, accounting, and customer services are often outsourced. This allows companies to gain access to top-notch professional services right away and make the costs of this project much easier to manage. Now, while outsourcing seems like a generally good idea, one thing you need to remember about the business world is that there are no right or wrong answers. There are only right and wrong answers in your particular situation. With that in mind and without further ado, here are some questions you need to ask before answering if IT outsourcing is the right choice for you.
Is IT Outsourcing The Right Choice For You?
1. Is long-term in-house IT sustainable?
One of the scenarios you have to consider is what happens in the future when your business either expands or goes through a rough patch. You see, the hiring process itself is quite lengthy and it takes quite a bit to onboard new hires. This is something you’ll have to repeat every time you need to expand. However, what if you find yourself in a situation where downsizing is imminent.
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You see, it’s all about scalability and flexibility. Sure, in ideal circumstances, your business will grow and expand all the time but there are some instances in which your business might not be doing so hot. If you notice this in time, you can reduce your spending and remain afloat.
When outsourcing, it’s fairly easy to switch to a cheaper/inferior plan and be done with it. The opposite goes for expanding. Either way, it’s easier than laying people off and having to re-hire them when you bounce back.
Even the biggest companies in the world often outsource their IT. If anything, analyzing top dogs may serve as an indicator of what awaits you in the future. This means that a company can never be too big for outsourcing.
The smaller your company is, the more logical it is to outsource. Starting an in-house IT department while you have 4 employees is a ridiculous notion. To make the long story short, outsourcing is a decent long-term solution and the size of your business is a non-factor.
2. Is it cheaper to outsource?
There are a couple of things you need to take into consideration when talking about outsourcing. First, the initial cost of setting up an IT department is astronomical. Needless to say, expense management is one of the key reasons why IT solutions are so popular in the modern business world.
Second, you need to worry about the payroll. Managing payrolls of all your employees is a bit difficult and your IT experts will have different payrates than the rest of the company. Keep in mind that it’s outright cheaper to just pay a flat fee than have to handle all the wages and software licenses on your own. While it’s not guaranteed that you’ll pay less, you’ll have fewer payment obligations, which already simplifies the bureaucratic aspect of your accounting.
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Third, you need to provide your staff members with the necessary tools and resources. All of this can be someone else’s responsibility if you were just to outsource.
Buying necessary hardware or introducing a DYOD policy is quite difficult. Nonetheless, both can be averted by outsourcing. The same goes for software licenses. Keep in mind that all of this is included in the price, however, it’s not a one-time payment.
3. How difficult is workforce management?
Keeping employees loyal is always a challenge, especially in a field this competitive, where IT experts have all the options (leverage in the world). The hiring process in this field is incredibly expensive and difficult.
Sometimes, in order to cut costs, you want to hire people with no experience, train them, onboard them, and help them grow as professionals. A lot of them will choose to leave either way. If you choose to outsource, the consequences of this problem are not yours to solve.
What happens if an essential member of your staff leaves? According to Price’s law of productivity, only a small portion of people are responsible for almost everything that gets done in your organization. The loss of one such person could have disastrous repercussions. If you outsource your IT processes, replacing or keeping these productive individuals is someone else’s responsibility.
4. How much control do you need?
The main reason why people have in-house departments is so that they get more control over the processes involved. While this is, in theory, a sound plan, it has one major flaw. While everyone is asking the question “how much control do you have over the department?”, what they should really be asking is “how much control do you actually need?”.
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It’s also easier to resist the urge to micro-manage processes that you have little to no understanding of. Appointing the right IT manager could be a solution to your problem but are you really going to let them do their job.
What happens if they need to grow their department’s budget? Also, bear in mind that your plate is, most likely, already full. Do you really need another administrative responsibility? With outsourcing, this problem is nipped in the bud.
Sure, being a part of the company has its benefits. On the one hand, when working with just one client over a long period of time, the department in question will get accustomed to your specific requirements and needs.
5. Do you need quicker results in IT Outsourcing?
One of the biggest advantages of outsourcing is a much shorter time to market. This means that you get the desired results (those that you could, in theory, achieve in-house) a lot quicker. It would take time to hire everyone, invest in all the right equipment, onboard people, have them get accustomed to the team and new working environment, etc.
Even if you do hire the experts (which can be an incredibly difficult thing to pull off), the onboarding process is bound to take a while. Working in every company and industry is different. Getting accustomed takes time. Needless to say, time is a valuable resource in the business world.
6. Do you need 24/7 availability?
One of the first things you need to understand is the importance of having the availability of IT support. For some, 24/7 support is a game-breaker and this is much easier to achieve by outsourcing your IT. First of all, remote IT companies often hire talent all over the globe. The fact that they have a workforce from all timezones makes this a lot easier.
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Once again, we return to the issue of payroll. Overtime costs extra but for experts from a distant time zone, this wouldn’t really be overtime. All in all, you get 24/7 support in a cheaper, more pragmatic manner. This is something that you should never downplay.
In the end, outsourcing is simpler than in-house management but it does offer less control. In theory, an in-house department is more reliable (seeing as how it’s under your direct control), still, this depends on who you decide to collaborate with.
In the end, the answer to the question of whether IT outsourcing is the right choice for you is the one that only you can give. Just make sure that your list of questions is elaborate and that your answers are as honest and informed as possible.
What is IT outsourcing?
Outsourcing is the process of hiring a third party to handle some of your company’s internal processes. IT outsourcing, for instance, means entrusting your company’s IT processes to an outside agency instead of starting your own IT department.
Is outsourcing cheaper?
Outsourcing is not necessarily cheaper but could end up saving a lot of money on necessary initial investments. You don’t have to rent out a bigger office floor, pay for software licenses directly, buy IT hardware, etc.
Does outsourcing save time?
Outsourcing helps reduce the number of tasks that you have to perform directly, which means that you’re free to focus on your core tasks. In other words, it takes your focus off the matters that you don’t know much about and allows you to focus on those areas that require your expertise.