Outsourcing IT needs is a good way for businesses to acquire the technical skills and resources they require without breaking the bank hiring in-house talent. Business leaders need to be mindful about how they approach this matter, however, as not all outsourcing opportunities will provide the expected value and return on investment. There are important considerations to make when viewing IT outsourcing as a potential solution to labor, budget and performance woes. If business leaders rush into an agreement with the wrong organization, they may be tied to a poor IT relationship.
When is it right to outsource IT?
Some organizations get it wrong right out of the gate by turning to a third party for their IT needs when their circumstances did not really point to outsourcing as a viable solution. So, how do businesses know when it is a good time to begin thinking about IT outsourcing? Some of the tell-tale signs include:
"Outsourcing can be an attractive alternative to hiring local talent."
Technical support costs are getting out of control – Maintaining an internal IT team is rarely cheap, but in some cases those costs can threaten the profitability of an entire business. As IT World Canada contributor Robert Cordray noted, there are a lot of underlying expenses to hiring an employee beyond his or her base salary. For example, health insurance, transportation reimbursement programs and retirement programs can all add considerable costs to maintaining a team of in-house IT staff. If an organization is in an especially competitive market, being able to attract top local talent without paying top dollar can be all but impossible. As such, outsourcing can be an attractive alternative in such scenarios.
- Many employees are working remotely – More organizations are embracing the concept of telecommuting in an attempt to improve staff satisfaction and increase productivity. According to the 2014 National Study of Employers, around 67 percent of businesses now allow full-time employees to work remotely in some capacity. The thing is, if fewer employees are actually working from the office, what sense does it make to keep a dedicated in-house IT team on staff? After all, a big chunk of the IT issues those employees will run into will be occurring at home, in a coffee shop or wherever else they may choose to work.
"[A]ny company that rarely has workers in the office should not go to great lengths to get a full time IT department in place," Cordray wrote. "There won't be enough work for them to do. Instead, it's better to get outsourced help that only needs to be paid when issues occur."
- The business is in a state of flux – It can be extremely difficult for internal IT teams to keep up with a quickly changing business environment. This is especially true for organizations that are in the midst of rapid expansion. In those situations, IT needs can quickly outpace available resources, leaving staff overworked and outmatched. IT outsourcing can provide some much-needed relief and facilitate expansion without running into any significant growing pains.
Getting started on the right foot
Once business leaders have determined that outsourcing IT makes sense for their organization, they need to consider what exactly a successful outsourcing relationship looks like for them. There are many strategies to potentially pursue here, so it is important that businesses find one that closely aligns with their own needs and goals.
For example, offshoring IT to workers located in places like India or Romania may not be suitable for every company. Time zone and language differences could prove to be rather tough obstacles to overcome. That is why nearshoring has grown in popularity in recent years, giving businesses an alternative to paying high prices for local talent or sacrificing communication and collaboration opportunities by working with offshore teams.
Another important thing to keep in mind is that cost should never be the overriding factor when deciding on an outsourcing partner. In the example above, an offshore team may come with a lower price tag, but the headaches that arise from relying on IT staff working on the other side of the globe could easily offset any cost savings. Forbes contributor Christian Burns McBeth explained that focusing too much on IT vendor invoices can blind an organization to the savings it is gaining elsewhere.
"The alternative (and the way to avoid a royal mess) is to examine whether IT outsourcing aligns with your long-term strategic plans, goals, and objectives," McBeth wrote. He added, "As you can see, there's a lot more at stake here than just dollars and cents."
Think of it this way: How much would it cost to hire the same team in-house? This is especially important to keep in mind when looking at the ROI of managed services. Maintaining on-site IT equipment is an expensive proposition. By outsourcing IT needs through a trusted, local managed services provider, businesses can gain all the functionality they require while keeping their costs in check.