Advantages and Disadvantages of IT Outsourcing
IT infrastructure plays a vital role in the modern business environment. However, not all companies have access to the same experts, assets, and resources as others. Whether from lack of availability or less capital to invest, some organizations lose out when it comes to a dedicated, on-site IT team.
It’s why outsourcing is a conventional method used to “fill the gaps” in IT. A widespread practice, outsourcing allows an enterprise – regardless of its scope – to incorporate services and experts into its infrastructure. Said services range from essentials like virtualization, BDR, cloud-networks, and more. It also allows businesses to utilize the skills of trained IT experts.
Naturally, it’s an exciting prospect. Gaining valuable IT services is crucial for efficiency. It allows a business to stay on the cutting edge of modern technology, while also keeping its data safe. But, just as with any outsourcing ventures, there are both benefits and negatives. Understanding how IT outsourcing works for you is a crucial factor when making long term decisions. Therefore, in this article, we’ll cross-examine some of the biggest pros and cons associated with IT outsourcing, allowing you to make informed plans for your IT.
If you’re not sure whether it’s time to look for third-party assistance, via managed IT services, there are a few things to look out for:
- You’ve noticed a decrease in company efficiency; projects are taking longer, customer inquiries are not resolved, and there’s more downtime.
- Security problems are higher in frequency and do not resolve. You encounter the same cybersecurity issue which leads to extensive downtime.
- The bottom line is getting hurt from the various problems your enterprise is encountering.
- You don’t have enough IT staff to cover all issues, and your experts are handling small problems.
- Customer support is not resolving problems fast enough or at all.
- You don’t have an effective recovery plan in case of lost data.
- You don’t have the financial resources to invest in new cybersecurity infrastructure, which is hampering company performance.
- Onboarding new staff is too time-consuming and expensive.
If these problems sound all too familiar, they’re a red flag your infrastructure is suffering. Unfortunately, you lack the capital to get the required solutions at a local level. Lucky for you, there are advantages to IT outsourcing.
Advantages of IT Outsourcing
There are plenty of benefits to outsourcing IT or IT services.
1 – Gain Essential Functions
When you think of outsourcing, you think of people. However, third-party providers also have options for essential services such as data storage or security monitoring. Perhaps you want to utilize virtualized software but lack the capital to do so. As you can imagine, outsourcing – depending on the provider – allows you to integrate these services into your infrastructure.
2 – Scaling Staff
Bringing on new staff, especially with IT, creates challenges, primarily with time and cost. But with outsourcing, experienced IT experts are integrated with projects and crucial tasks immediately. Staff is scalable too, meaning an enterprise can bring on as many or few members as needed. When projects finish, you can reduce staff numbers. This flexibility grants unprecedented control over project management without the dedicated time required to hire and train new employees.
3 – Improved Security
Outsourcing allows an enterprise to access additional security services like data monitoring, protection, and backup. Providers can monitor and flag unusual network activity, maintain updates to essential software like anti-virus, and maintain good practices for cybersecurity. This is beneficial, as not all businesses have the capital to invest in their cybersecurity infrastructure, creating dangerous gaps in coverage. Those gaps lead to potential intrusions, which cause downtime and a host of other problems.
4 – Cost Reduction
For the reasons mentioned thus far, cost reduction is another common benefit of outsourcing IT. Because business doesn’t have to train or keep long term staff, there’s less capital required.
Additionally, an MSP can provide IT infrastructure through virtualized services or similar, versus an enterprise needing to establish said infrastructure itself. These, along with numerous indirect benefits such as improved efficiency and better security, help a company’s bottom line and allow it to remain competitive with IT, despite not having resources available locally.
5 – Improved Focus
Even if an organization does outsource, it doesn’t mean they lack IT themselves. Sometimes the outsourcing is done to patch up weaker areas of the organization or assist with larger projects. But what this does is allow for on-site staff to focus on their specialties and prioritize goals. For instance, if a company outsources IT to handle necessary customer inquiries, it’s own team can prioritize larger tasks such as cybersecurity monitoring, network improvements, or installation of new infrastructure.
Disadvantages of IT Outsourcing
Even with all the great benefits, there are some downsides to consider when looking to outsource IT.
1 – Less Control
One factor which often stymies investment in outsourcing is control loss. When using third-party services, an enterprise entrusts core services to a different staff body. Some are uncomfortable with the idea of a secondary business managing their security or essential functions, and it’s possible a secondary MSP will not manage tasks to the same standards of a company.
2 – Lower Quality
Depending on the who and where of outsourcing, quality can be a factor. While some IT providers offer sound infrastructure with experienced staff, others may provide only less qualified individuals who can affect the quality of service. This varies based on the provider and what tasks are outsourced.
3 – Communication
A factor which should consider, communication can suffer serious lapses depending on the provider. Long periods between inquires and conversation are problematic, as the slower the outsourced response, the more services are affected. If for instance, you are dealing with a security issue, fast communication is essential. If you’ve outsourced cybersecurity services to a third party in this scenario, the lapses in communication would significantly hinder your business efficiency and extend other problems like downtime.
4 – Security Risk
Just as security improves, it can also suffer from potential risks. This is because a company relies on a secondary party to handle its data, either in part or whole. If said company doesn’t have the same safety standards or is compromised in some way, your information will suffer. Traditionally, third parties will take appropriate means to shield your information, but that’s not typical for all managed providers.
For instance, if you use a data center for BDR, what happens if the data center loses data from downtime or cybersecurity issues? In this scenario, risk has increased, instead of lessened.
5 – Morale
Outsourcing may impact your staff too, depending on the extent. No one wants to think their job is on the line, especially for essential services like cybersecurity and IT infrastructure. Depending on how extensive a company on board third-party resources, morale is something to consider. Disheartened staff may work less or grow frustrated with their environment, resulting in quality loss and in some cases, turnover.
As you can see, there is a range of pros and cons to IT outsourcing. Not all factors will affect organizations the same, as each business has its unique requirements, demands, and needs. Understanding the risks involved with IT outsourcing is crucial when deciding on what to offshore. However, a correctly outsourced plan can provide a host of benefits and revitalize company efficiency and profit. There are many advantages to IT outsourcing, as long as they are successfully utilized.