Information Technology (IT) management or IT consulting is known as a collection of activities focused on advising enterprises on how to run and optimize the use of IT resources, and technology strategies with the objective of achieving the business goals.
Before we get into the pros and cons of IT outsourcing, we may need to agree on the concept of IT outsourcing and why is it so important for an organization. We think of it as a form of making the organization of a business a lot easier by getting more efficient results in a shorter period.
The strategies of incorporating IT consulting are rather diverse, and the mechanisms work in different ways; all dependent on the exact requirements the company wishes to achieve. Some of the techniques used for IT outsourcing are:
- Onshore: which is outsourcing in the same country
- Nearshore: which consists of outsourcing to places that are relatively close by
- Offshore: which is basically outsourcing to anywhere in the world (this one is usually a less expensive option).
Considering some of the benefits that these IT outsourcing strategies might provide:
Increase Capabilities without Increasing Permanent Headcount
If you have a small-medium size enterprise and have too many responsibilities with not enough resources, IT outsourcing can handle IT needs without the need of having a dedicated IT support team. Therefore, existing staff can better focus on their business-related duties without having to retrain staff or recruit staff for IT functions. IT outsourcing can be the solution to your problems, in case of not being able to hire extra staff.
Outsourcing tends to downsize staff considerably, replacing them with vendor’s employees from all around the world. Usually, vendors have flexible payment schedules, making better tax arrangements for the organization. And, thanks to low-cost modern telecommunications, enterprises can afford to move data centers to low-cost areas.
Organizations could make significant revenue savings by not hiring their own fulltime staff and carry the costs of digitizing the entire or certain aspects of the organization.
IT outsourcing can improve control over the areas that the company’s staff may lack experience in as they may be more knowledgeable and therefore better-informed negotiators than company staff.
Wide Talent Pool
Enterprises potentially get to work with the best international talent available and are not limiting by only working with people that are in the same city or country. Their diverse expertise, allows them to better understand their customers’ requirements and meet their expectations as they have experience with multiple clients worldwide.
When an organization invests in any type of IT hardware or software, there is a considerably risk. Although, when companies outsource technology and the support thereof, they become more flexible, dynamic, and able to adapt to changes quicker.
IT Outsourcing sounds like a perfect option to relieve work and save money, but it does not always work out as expected. There are different reasons, such as pairing up with an incapable or non-trustworthy IT vendor, which could result in the exact opposite outcome making the enterprise lose money, material and time without getting their mission accomplished.
There are some possible disadvantages to IT outsourcing such as:
Different Time Zones
International time zones and distance can become a major problem when it is not planned for before making the IT outsourcing contract between the enterprise and the vendor. Misunderstandings in this subject can, almost for certain, frequent create delays and workflow interruptions.
IT evolves pretty rapidly. So, investing large sums of money into these systems, hoping for a long-time relationship, sounds a bit risky if the contract terms are more than three or four years. Considering that, after a couple of years, it is very likely than only a few of these technologies will work properly, making your processes run slow or, if the systems is discontinued, there won’t be any guarantees of functioning.
Loss of Control
A company’s own employees know best how their internal processes work, better than outsiders, making the workflow problematic. Staff members may therefore become annoyed about external people having input into systems and processes which they manage on a daily basis.
Fear of Employees Losing their Jobs.
Employees may be demotivated over the fact that staff and technology is being hired to substitute their work and thus fear for the security of their jobs. Customers may also feel a bit detached at the moment of making a contract with the organization if they have to do it through a third-party.
As it is true that there are risks in regards to IT outsourcing, being familiar with the risks is the first step in being able to mitigate them. A reliably IT consultancy should be able to provide a recommendation for solutions when problems arise. IT consultancy companies are therefore the most cost-effective solution for gaining external objective advice and recommendations.
IT companies are normally staffed, by people with degrees in computer science, electronics, technology, or management consulting systems. So, these companies become a mixture of IT and business consulting, providing specialized talent that would not be cost effective to hire internally.
Their principal role is to support their clients from the very start of the contact process until the signing of their contract, ensuring that no irregularities are in play. They will review the IT vendor’s track record and ask the necessary questions in order to ensure a good long-term relationship over time.
But how can an IT consulting company review vendors’ track records and know if they are trust-worthy?
Your IT consulting company will most likely have past experiences with certain IT vendors and can count on their own relationships to create new relationships for your business. If they do not already have a supplier able to provide the service required then they will assist with the tendering and evaluation process to ensure that the right questions are asked during the investigation process; e.g. the technology area that your business requires, where are the vendors’ employees located, what’s their business track record, asking for references and contacts names, etc.
An IT consulting company also tends to keep up to date with the latest technologies to deliver advanced solutions. They are the true experts on what type of IT solutions could fit your business needs; depending on what area they are experts in.
IT outsourcing can have a lot of benefits when you find the right IT vendor. The conclusion when comparing the pros and cons of IT outsourcing, should be that in most cases it is worth further investigation. However, it is very important to highlight that good research of IT vendors made by an IT consulting agency can considerably lower the risks.
For a fraction of the cost, companies may gain access to specialized expertise for their IT needs, not to mention the terrific increase in productivity that a troubleshooting team might provide to your team. Whether you are planning an IT expansion or trying to recover from a losing streak.
At Beztec, we have delivered high quality IT outsourcing consulting services for clients worldwide and our mission is to provide SMEs with quality IT services to put them on the same level as multinational organizations. To learn more about how Beztec can help drive your IT strategy, drop us a comment, or visit our website for more information!