Should Your Business Outsource IT? Risks and Benefits Explored
Outsourcing IT can feel like letting go of the reins and relinquishing control. But is it as risky as it sounds? And what benefits could it bring to your business?
In this post, we want to help you decide if outsourcing IT is the right step for your business. Covering the risks, the rewards, and the things to consider, our guide will make clear whether outsourcing is a viable and sensible solution for you.
- What is IT Outsourcing and What Does It Involve?
- What Are the Benefits of Outsourcing IT?
- Are There Any Risks to Outsourcing IT?
What is IT Outsourcing and What Does It Involve?
IT outsourcing is when a business passes parts of its IT functions and infrastructure to a third party, who manages them on its behalf. A company may subcontract different functionality to individual suppliers or lean on a single operator to oversee all their systems and networks.
There are several types of IT outsourcing to suit different business needs and functions. Some of the most common forms of IT outsourcing include:
- Managed services – generally cover things like virtual private networks (VPNs), cybersecurity and firewalls, network monitoring, IP telephony, call centre functionality, and reporting.
- Cloud services – provide services, platforms and software over the internet, usually as a Software-as-as-Service or Platform-as-a-Service model.
- Domestic outsourcing – covers IT tasks which are carried out by an external provider, either in a remote capacity or on-premises.
- Overseas outsourcing – includes IT functions outsourced to providers in different countries, usually for a cost-benefit.
Businesses may choose to outsource a variety of IT-related functions, processes and maintenance tasks. These include:
- Technical support
- Web hosting and development
- Software and application development
- Data centre management
- Contingency and disaster backup
- Database, finance and HR functions
- Hardware installation and implementation
- Enterprise resource planning (ERP) software
What Are the Benefits of Outsourcing IT?
Now that we’ve covered what IT outsourcing is and what it can be used for, let’s turn our attention to the benefits it can offer resource-strapped businesses.
More Resource for Improved Functionality and Growth
Given our ever-growing reliance on tech, having the right IT assets is critical to business development and growth. But for many start-ups and SMEs, finding the capital needed to invest in IT hardware can be a tall order.
Not so with IT outsourcing. With a range of services and functions available on flexible Software-as-a-Service (SaaS) and Hardware-as-a-Service (HaaS) models, you can get the IT resources you need without the exorbitant buy-in costs.
Cybercrime is among the biggest threats businesses face in the current landscape, and those unequipped to deal with the issue present an easy target for criminals. And it isn’t just the loss of company assets you should fear, but the damage such a breach could inflict on your reputation.
Security is often a side-line issue for SMEs, which is why many choose to outsource this facet of their IT infrastructure. By leaning on a third-party provider, you can be sure your IT assets are protected in line with best-practice advice, as well as the latest security protocols.
Peace of Mind from Service Level Agreements
Many business leaders are wary of delegating IT assets to third parties. But while caution is necessary when choosing suppliers and contractors, the presence of a Service Level Agreement (SLA) should help you move forward with confidence.
SLAs are commonplace in the field of IT outsourcing. They set the standard for work carried out by a third party, assuring you that should something go wrong, the other would be liable under the terms of the SLA.
Outsourcing IT isn’t limited to a basic service-level relationship. Instead, you may develop a close partnership with your external suppliers, who are well-placed to offer a fresh perspective on your operation.
To ensure your business remains dynamic and agile, finding an IT outsourcing partner who can deliver more than basic services and products is advantageous. The right supplier not only helps fill the gaps but seeks ways to support your business – whether through improved efficiencies or strategic technological investment.
An Across-the-Board Approach
If your business relies on multiple IT systems and functions, it can be easy to lose track of where to invest in additional resources. And, by neglecting specific operational areas, you risk missing opportunities for growth.
Investing in fully-managed IT outsourcing ensures that all business functions have the right platform on which to work and grow efficiently. It can also reduce costs, and make it easier to know when to invest in additional services and infrastructure.
Are There Any Risks to Outsourcing IT?
The benefits of outsourcing IT functions are plentiful, but it’s not without its risks. Here, we list some of the things you should consider before subcontracting internal IT processes:
- Hidden fees – Before agreeing to outsource IT assets, be clear on the supplier’s payment terms. Some companies may charge additional fees for work beyond that outlined in the SLA.
- Outdated practices – Any benefit you hope to gain by outsourcing IT will diminish if the supplier relies on outdated practices. Check their credentials during the research phase and seek affirmation of their skills and practices from recent case studies.
- Uncertainty – Efficient IT outsourcing relies on forward-thinking and decisive action; you want to partner with a supplier who takes positive steps to support your business. In our competitive business landscape, there’s no room for uncertainty, so research prospective partners carefully to ensure they align with your business philosophy.
- Inexperience and weak management – If you’re looking to outsource IT at as low a cost as possible, be wary of the risks of inexperience and weak management. While it’s not a universal truth, generally the less you pay the lower the service level you can expect, so be mindful of this when budgeting for IT outsourcing.
- Internal business problems – In rare cases, internal issues within the business could jeopardise the success of an outsourcing project before it’s got off the ground. Be sure that internal stakeholders agree with your outsourcing plans, otherwise, it risks bad feeling and a perceived lack of trust. And remember that having some element of internal IT resource is highly recommended in ensuring that day-to-day operations run smoothly.
Outsourcing IT to trusted third parties is becoming increasingly commonplace in today’s tech-heavy business landscape. Innovations like cloud computing and ERP software have made it simple for businesses to make use of SaaS and HaaS solutions – providing on-demand IT assets that drive growth and performance.
We hope this guide helps you decide on the possibility of outsourcing IT functions and processes. In need of further help and advice? The JS3 Global team is here to help.
With years of experience helping businesses leverage the latest software and technologies, we can offer insights and expertise to make the big decisions about your ERP infrastructure easier. For a no-obligation consultation about your requirements, call the JS3 Global team today on or +44(0)161 503 0866 visit the homepage to learn more.