Any small business owner has probably thought about outsourcing some business functions. The advantages of outsourcing may seem obvious and are often touted by experts from several industries as the solution to minimizing costs for various business functions that range from IT to marketing, accounting and human resource. In fact, it may seem like it is possible to run a whole firm without the need to hire permanent employees.
However, outsourcing is not always simply about the bottom line. You should consider other reasons why companies opt for this route. Additionally, you need to think about the ramifications for certain features of your company that may not be easily quantifiable. Here are some of the reasons, risks, and rewards that you might have to consider when thinking specifically about outsourcing IT services for your business.
One of the common reasons why businesses outsource is to minimize and control the cost of operations. Outsourcing allows you to eradicate the costs associated with hiring full time employees like management oversight, health insurance, retirement plans, management oversight, etc. Secondly, outsourcing allows you to enhance company focus as it gives you space and time to concentrate on your core strengths while another firm focuses on theirs. Thirdly, it offers you an opportunity to gain access to unique capabilities. When you outsource IT to a company that specializes in the capacities you need, you get to enjoy a higher return on investment (ROI). Rather than rely on the knowledge of a single individual, you get to take advantage of the collective experiences of a team of IT experts. To see some of the IT areas that you may outsource, visit IT Support Utah for a range of IT outsourcing services.
Whether you are going to hire a full-time employee to handle IT services or you are going to outsource an IT company to handle the function, there are certain risks associated with giving someone responsibility for any aspect of your business. Consequently, there are certain questions you need to ask yourself. Did you hire the right firm/person to perform the job? Will the person/company do what they are required to do? How will the company/person fit with the current departments or employees? Any business owner who is entertaining the thought of outsourcing IT functions should be aware of certain risks. These include:
- Some IT functions cannot be easily outsourced and you need the outsourcing company to be qualified to handle your most important needs.
- You may lose some level of control, raising concerns about data confidentiality and security
- Outsourcing may negatively affect employee morale as you will have to lay off some staff
- You may get tied up to the outsourcing company especially if you choose to use their proprietary software
Regardless of the risks noted above, there are several rewards you can anticipate when you outsource IT functions. First, you will have access to the latest and best technology, especially given the rapid pace at which hardware and software becomes obsolete nowadays. Secondly, you get to enjoy cost savings through having a leaner overhead, leasing options, and bulk purchasing for software and hardware. Thirdly, you get access to highly qualified and experienced staff. Additionally, vendors offer multiple resources and capabilities compared to internal staff, which means you enjoy more flexibility. Lastly, you get to eliminate the burden associated with job security of permanent employees.
In conclusion, you need to think carefully about your needs and consider the risks, rewards, and reasons before outsourcing IT. Whether you are going to outsource or hire a regular employee, you can be sure of one thing – you need to know how to balance successful working relationships with your IT service providers.