Is IT Outsourcing Right for Your Business? The Pro’s & Con’s
For those considering whether to take their IT off-site, this article looks at the basics as well as the pros and cons of IT outsourcing.
Businesses can outsource a number of functions, most commonly accounting, marketing, customer service, human resources and IT. The reason these functions are the most popular for outsourcing is simple, each requires specialist skills to deliver that most small businesses will not have access to internally.
IT in particular is most often outsourced as it is no longer likely that you can just employ 1 or 2 people who could adequately cover every aspect of modern business IT, including cloud, local computing, networking, telecoms, applications, XaaS, and much more. It is much less costly and time consuming to simply engage a specialist company that can handle all these elements for you.
What is IT outsourcing?
With outsourcing, you move part of your operations away from the hub of the business to a third party. This can be:
· Offshore — outsourcing to a foreign country with favourable tax savings and lower costs
· Nearshore — outsourcing to a bordering country for easier communication
· Onshore — outsourcing within the company’s base country
· Cloud computing — the third party would provide IT-related services over the net such as software as a service or platform as a service
· Managed services — providers of business services. Most IT managed service providers (MSP’s) offer services such as call centre IT support, backup and disaster recovery, communications, compliancy, training, procurement, network architecture, security services, consulting and so on.
Moving your IT off-site allows your company to grow and become more sophisticated without major risk or investment.
Pros of IT outsourcing
There are certain perks to outsourcing your IT.
Slash your labour and IT costs
Outsourcing gives you access to specialist knowledge and resources without the cost of in-house salaries. Some MSP’s will have experience or even specialise in certain sectors too, offering niche services that could fit your industry (more on this later).
As I mentioned earlier, IT in the 2020’s is such a diverse subject that no 1 or even 2 or 3, people could be expected to be proficient in all of them. But it is not just the salaries of employing 2 or 3 specialists to consider, on-going training is also essential, which can be expensive and will often eat into their working hours.
MSP’s employ many technical staff with specialities in all aspects of IT and they will have continual training programmes in place to ensure that they are able to keep up with the rapid pace at which IT evolves and develops.
Employing an in-house IT department often means a higher turnover of staff, higher recruitment costs and the need to find cover for holiday and sick leave. An IT provider will deal with this side of things on their end, giving you a seamless IT experience for a fraction of the cost.
Fewer security threats and quicker recovery from adversity
IT providers know how to recover from a disaster — be it an accident, act of God, malicious attack, natural disaster, or even a global pandemic — so your business is more likely to recover quickly.
They will also be able to analyse your IT and business processes to identify weaknesses in your security and offer ways to mitigate these. They may even offer compliancy and certification services so that your business can meet required standards to do business in high value sectors that require them, such as the Public Sector, Health, Finance, and the Aerospace and Automotive industries.
Good IT providers are well clued up on vital legislation too, such as GDPR, potentially saving you from a few scrapes, especially in terms of customer data protection.
More energy to focus on your business
Managing and maintaining IT infrastructure is a time-consuming job. By giving the responsibility for this to others you can focus on your core business.
More than this though, expert care will ensure that your business is more resilient and more secure, resulting in less disruption and better productivity.
Be more agile
A quality outsourced IT service organization will have the resources to start new projects right away. Handling the same project in-house might involve weeks or months to hire the right people, train them, and provide the support they need.
For most implementations, quality IT companies will bring years of experience in the beginning saving time and money and allowing your business to be more adaptable and able to adopt new technologies more quickly.
Level the playing field
Most small businesses cannot afford to match the in-house support services that larger companies maintain.
Outsourcing can help small companies act “big” by giving them access to the same technology, and expertise that large companies enjoy.
FURTHER READING: I recently published a series of 3 articles on this topic alone, take a look if you would like to read about “how IT can help your small business compete with the big boys”.
An independent third-party managed cost structure and economy of scale can give your company a competitive advantage.
Cons of IT outsourcing
Of course, there are potentially downsides too.
Their turnaround times may be longer
As the IT team are not in the office, it is not as convenient to ask them for check-ins or off-the-cuff requests.
It is important to ensure that any company that you engage offer a Service Level Agreement that you will be happy with and offer penalty backed guarantees for failure to deliver on them.
Your IT provider might not be familiar with how your business works from the offset.
This is another downside that can be easily mitigated, simply ask any potential provider about their “on-boarding” process, a good provider will spend time at the start of a new contract engaging with you to understand how your business operates, what functions of your IT are critical for you and carry out an in-depth audit of your existing infrastructure in order to identify any weaknesses and offer recommendations for improvements.
Different standards and communication issues
This is important if you are considering offshore or nearshore outsourcing. The country that you are outsourcing to may have different labour, ethical or legal standards to your company, which could clash with your values and corporate social responsibility document.
Locality can offer benefits when it comes to your IT MSP, especially in terms of communication and the ability to easily despatch engineers to your site in cases where telephone and remote access support cannot get the job done.
Who should I go to for my business IT?
I have already mentioned a couple of things to look out for in a new IT service provider, to mitigate potential downsides.
Here are a few other things to look out for when selecting an IT service provider…
· A one-stop-shop — it is far better to deal with one provider than many, so ideally look for a company that can offer you a wide range IT services to meet your needs now and in the future.
· Able to take responsibility — going together with the first point, look for a provider that will deal with other appropriate 3rd parties directly. You do not want to play piggy-in-the-middle between your IT support provider and your accounts software vendor, or Internet Service Provider, for example.
· Proven track record — look for a provider that can demonstrate a history of great customer service and project delivery. Any provider that takes customer service seriously will keep records of client satisfaction statistics and documented case studies that include commentary from the customer.
· Compliancy and certification — cyber-security and data protection standards are more important than ever, how can your IT service provider be expected to ensure that you are compliant if they have never bothered to become certified themselves?
· A service that is right for you — many IT support companies offer a choice of services levels to suit different budgets and requirements, such as…
o Pay-as-you-go or ad-hoc support
o Break-fix support
o Managed service / contract support
o Choice of remote / telephone only support or a comprehensive service that includes onsite support
o 24/7 support
Make sure your provider offers the right service type(s) for you.
· A pro-active approach — most IT issues to not just happen out of the blue. The best IT support companies offer continual monitoring and assessment of your infrastructure and can identify potential problems and resolve them before they can disrupt or impact your business.
Should I outsource my IT?
It is really your call depending on your business’ needs and plans. If you are intending to grow your business and can comfortably move your IT off-site, then it is worth considering.
Peruse some of the third-party IT providers on the market to see what they can offer and if outsourcing is not right for you now, you can always revisit it later.
Want more advice? If you would like advice on IT for your small business or start-up, get in touch.