F12 Blog

Outsourcing IT: Pros and Cons Every Business Should Consider

 

Normally, as a Regional Manager of a Managed Service Provider, by the time I’m brought into the picture most businesses have already asked themselves this question and decided they’d entertain the idea of it.  But just what does outsourcing your IT mean to your business, and is it should you entertain it as well?

What is Outsourcing?

 

Simply stated, outsourcing involves the transfer of operational activities to value-based suppliers. The aim is to shorten the supply chain and reduce the amount of time the company spends supplying services to itself.

Businesses that are considering outsourcing resources are usually done so with the aim of saving costs and gaining a specialization often difficult or costly to develop internally. In particular, development, production, and fixed costs can be significantly reduced. The business can be more focused on strengthening its creativity, and this will allow them to minimize additional costs and to reinvest their savings.

 

The Potential Fruits of Outsourcing IT

Specific Expertise

Sometimes an outsourced vendor or business has special equipment and technical expertise, making them better at the given task than employees within the outsourcing organization.

Control Operating Costs

When you outsource, 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.

Free-up Internal Resources

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.

Reduce Risk

Keeping up with the 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 making a costly wrong decision.

  

Well…… What Can Go Wrong?

Employee Morale

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.

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 an Issue

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.

Increased Communication Complexity

With an internal IT person, management can be directly involved in the day-to-day. With an outsourced team, extra correspondence and regular meetings will be required to maintain effective communication and clear understanding.

 

The Gold at the End of the Rainbow

Cost Reduction and Control

Outsourcing your IT services provides financial benefits such as leaner overhead, bulk purchasing and leasing options for hardware, software, and software licenses, as well as potential compliance with government regulations.  Also, effective outsourced IT teams should be able to provide 12-18 month planning for costs and provide cost certainty in a traditionally difficult to predict cost centre.

Be in the Hands of the Experts

Since it’s their core competency, outsourced IT partners 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 that you may hire the wrong person for the job.

More Productive Staff

Using an outsourced IT company removes the burden from your staff member 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.

 

 


Mike Alexander
F12.net, Inc.
Manager, Edmonton

 

Book a Consultation

Complete the form below, and someone from our staff will be in contact with you soon to book your consultation.