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What Is IT Outsourcing and Is It Worth It?

it outsourcing provider helping woman with computer issue

January 10th, 2020

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It’s not a mystery that most businesses rely on IT in some fashion. Technology is a crucial linchpin in determining the success (or failure) of a modern enterprise, so naturally, there’s a lot of investment in the market. But a daunting issue many organizations face is a lack of IT expertise. The reasons for this typically come down to three main factors: lack of trained staff, lack of availability, or lack of substantial capital. However, there is a solution. Enter IT outsourcing. IT outsourcing utilizes third-party providers and is a common practice for many organizations — especially small to mid-sized businesses. This type of managed service provides all of the reliability and expertise of experienced IT personnel, without the full investment required for in-house staff. If your business needs IT services, keep reading. IT outsourcing may be just what you are looking for.

What is IT Outsourcing?

IT outsourcing is when a business employs a managed service provider (MSP) or other provider to handle some or all of the necessary IT functions. With the right provider, outsourcing can fulfill any designated role for your technology needs. From cloud hosting to cybersecurity monitoring, outsourcing offers a variety of services in different models. No matter your needs, IT outsourcing is reactive and customizable for your organization, not to mention it provides significant cost savings. Just a few examples of outsourced IT solutions include:

Managed IT services
Cloud backup services
VoIP (Voice Over Internet Protocol) services
Firewall services
Data backup and restoration services

Benefits of IT Outsourcing

You may be wondering why an organization would choose to outsource its IT needs as opposed to fulfilling them in-house. Well, let’s examine some of the benefits of IT outsourcing.

Cost-Effective

The first benefit we’ll discuss is often the most important for many businesses — we’re talking about cost. No matter the size of your organization, we bet you would like a little more capital and financial flexibility. IT outsourcing helps with this in many direct (and indirect) ways. For starters, outsourcing allows you to hire active staff as often as needed, without the investment of training. Hiring in-house is both costly and time-consuming. Even more, the process of finding valued experts for your business can be challenging. But with an MSP, they have experts on hand ready to go. You can bolster your IT team with additional help quickly and easily, which is extremely useful for fundamental business objectives.

Predictable Costs

Additionally, outsourcing your IT often results in predictable costs. Providers generally apply a rate based on the specific services your organization needs and the agreed-upon hours. This way, you know what you will be paying each month, and as opposed to a flat fee, you’re only paying for what you use.

Flexible

This pay-rate model also allows you to add or remove services as needed. For example, you might want to add a month of security monitoring to your plan while you set up additional infrastructure. With IT outsourcing, this is easy to do and doesn’t cost a fortune.

Improved Efficiency

As you begin to funnel IT tasks to the appropriate third parties, you relieve your own employees. When your Human Resources Manager or Vice President of Sales has to deal with computer troubleshooting, not only do they become frustrated, but they also take time away from their actual job. Efficiency takes a hit, and productivity is lost. But with outsourcing, IT experts can handle everything from basic password resets and tech questions to more advanced technical tasks. A few additional benefits of IT outsourcing include:

Increased Knowledge
Active, Year-Round Support
Greater Control
Reduced Risk

Disadvantages of IT Outsourcing

Though we’ve reviewed the myriad of benefits offered by IT service providers, outsourcing isn’t for everyone. There are some potential drawbacks that are worth understanding. It’s essential to take these considerations into account to decide if outsourcing is the right solution for your enterprise or if you would be better served hiring in-house.

Loss of Organizational Control

Depending on how far-reaching the outsourcing process is, a business can lose direct control over its various services and infrastructure. For organizations that only rely on outsourced IT for messaging, backup, and minor utilities, this is not much of an issue. However, for major processes, such as security monitoring, you are relying on a secondary entity. Some businesses may not want a third party to have this much access and control over their systems.

Decline in Quality

Whenever you work with a third party, there is the possibility of suffering a loss in quality. And this is concerning for many organizations when it comes to the IT realm because it affects all points of your enterprise. However, this potential drawback can be combated with proper research and due diligence. If you take the time to review possible providers, you should be able to separate the high-quality, reliable options from their lower-tier counterparts.

Difficulty Communicating

Depending on which provider you go with, time zone differences or other issues can create barriers in response. In certain circumstances, this can cause severe problems. Part of smart outsourcing decisions is considering potential delays in communication.

Increased Internal Friction

Another potential disadvantage of outsourcing is the possibility of friction within the company culture. Relying on infrastructure services can cause current IT employees to feel threatened or devalued, potentially leading to high turnover rates and other unforeseen problems. If you have an internal IT employee or team, it’s important to treat an outsourcing plan as a gap-filler, simultaneously valuing your own IT experts while bringing in assistance where necessary. With this in mind, you can create a positive environment for your employees where they see outsourcing as what it is — a helping hand.

IT Outsourcing Services

Now that you have a clearer understanding of the positive and negative qualities often associated with IT outsourcing, it’s time to discuss solutions. The question is, how do you choose the right provider? What criteria should you establish when searching for a partner? While the answers to these questions are ultimately your organization’s decision, here are some types of partners to consider.

Managed Service Provider (MSP)

Two-Factor Authentication and Multi-Factor Authentication

MSPs are capable of offering various IT support options and are often a go-to choice for many enterprises. If you’re looking for a resource to assist with data storage, monitoring, local and cloud backups, customer service, virtualization, and more, an MSP is often the right call. Acting as a jack-of-all-trades, the one thing you want to be aware of is whether your chosen provider actually possesses the knowledge they advertise. Review customer testimonials and reviews, case studies offered, and the size and knowledge level of the technicians.

Homeshoring/Onshoring

If you’re looking for a convenient and handy way to bring in workers that don’t require training, you might consider homeshoring or onshoring. This outsourcing model allows a company to hire individual specialists from anywhere, typically on a contract or temporary basis. These specialists can fill various roles and often work from home. Because they don’t require training, your organization saves on those costs. Unlike an MSP, hiring these types of workers can be on an individual basis, meaning you won’t have access to other IT experts that can provide a larger pool of knowledge.

Offshoring

Offshoring is another common form of IT outsourcing. In this model, companies hire IT service providers that are located outside of the United States — India and China are frequent choices. Because of the time difference, these offshore IT services can handle off-hour customer support along with other support functions.

Factors to Consider When Hiring

Once you understand which model best suits your organization, you can establish proper criteria for hiring. Factors to consider include:

Cost
Services required
Reputation
Specialties
Efficiency
Hours of operation

Conclusion

IT competency can determine the success or failure of a business, so having strong IT support is essential. IT outsourcing provides a whole world of options for filling service gaps and improving organizational efficiency. Interested in outsourcing some or all of your IT? Check out this article to determine whether you should choose remote or onsite IT assistance.