The Truth About IT Outsourcing: Pros, Cons, & What to Consider

Many businesses encounter difficulty just to maintain their IT infrastructure. Luckily, managing IT services is easier now, thanks to the Internet. Because of connectivity, the option to hire employees from third-party companies has become easier and more available. Not only does it include a wide range of operations and specialties, but outsourcing has also created cost-effective solutions on a global quality scale.

However, it’s not all beneficial. Drastic changes and mistakes could damage a business’s growth if not done properly. It’s even possible that the company you’ve chosen to outsource your needs to is incompatible with your business methods.

Before going all out on outsourcing with a company, read through the pros and cons of doing so and the key factors to decide whether or not you need it.

What is IT Outsourcing, and why is it important today?

There is a reason why outsourcing was created even before the COVID-19 global pandemic. Because of globalisation, the Internet has become a consumable source of information and connectivity. You can easily download all the data that you need from a tap of a few keys on your mobile device compared to the past. 

This also paved the way for remote working. People began working from their homes effectively. Tools for communication flooded and soon companies were formed around the globe offering services to other businesses. The one that gains the most attention today is IT Outsourcing.

The benefits of IT Outsourcing for small businesses are summed up as successfully managed IT services with cost-efficient solutions. However, there is more to outsourcing than meets the eye. Depending on the nature of the business, outsourcing can be either a blessing or a setback.

Read through the top 5 pros and cons of the trade to get a better grasp on its necessity for your brand. 

Top 5 Pros of IT Outsourcing

Learning about the many benefits of outsourcing is the best way to neutralise any confusion about its advantage for businesses. Listed below are five benefits that could be helpful to the growth of your brand.

Cost Reduction

There are many interesting benefits to outsourcing your IT. However, the most commonly known among the pros of IT outsourcing is its cost reduction. Startup businesses are growing at a fast rate over the years and the demand for high-quality IT services has grown even faster. 

Funding is usually limited and it will take time to gain leverage and hire employees. The best solution is to hire a third-party contract employee. Not only is it cost-efficient, but these employees contracted to the tasks you hire them for are specialists. This means you get high-quality service for less than an in-house employee.

Access to Specialised Skills & Talent

Third-party employees are hired for their talent and specialised skill set. Unlike other employees, specialists have advanced knowledge about the required skills to maintain and improve a company’s IT infrastructure. 

Being able to receive an advanced and seamless form of functionality to your app or website is always a good thing. Even better is having a team that can create such a leap thanks to their background and knowledge.

Improved Efficiency & Scalability

One of the great pros of IT Outsourcing is its potential for scalability. Efficiency gained from the outsourced employees allows more room to grow for its infrastructure. These experienced third-party contract employees have long adapted to organising data, decoupling, and other techniques to ensure quality performance.

All businesses will require a stable IT infrastructure that can handle the inevitable need for scaling. Thanks to these professionals, scaling won’t cause major setbacks in maintenance or prolonged delays. Instead, the organised code structure will allow seamless updates and changes without damaging other functions’ capabilities.

Enhanced Security (optional – depends on chosen provider)

It’s an optional benefit but something most undermine. Enhanced security of your data is crucial to protect your customers and their information. Many businesses have online transactions which include credit card accounts, addresses, emails, and phone numbers. The information stored in a business’ data bank must be protected.

However, cybersecurity requires strict and specialised coding. Another thing to consider is the physical security of your data. Data banks and cybersecurity can be outsourced to trusted professionals.

It’s important to note that enhanced security is only an option for specific providers. This means that not every outsourcing company has this as part of their service. Look over those with security services specifically if you wish to have this as part of your outsourced tasks.

Increased Focus on Core Business Activities

Highlighting the pros of IT Outsourcing would be room for growth. Unlike companies that do not outsource their daily tasks and maintenance, businesses with outsourced employees can deploy their in-house employees to work on innovative and collaborative ideas.

This means that your in-house tech department will have more time to collaborate with other departments for business growth. Any campaigns, development, or other strategies requiring your in-house team’s attention can be met quickly. Their focus will be on the company itself rather than the maintenance of its IT infrastructure.

Top 5 Cons of IT Outsourcing

Now that we have covered the pros of outsourcing your IT, it’s also good to limit yourself to realistic expectations when choosing this service. Listed below are visible reasons why outsourcing could setback your business and solutions to these cons.

Communication Challenges & Time Differences

The biggest loss that companies may face can be caused by time differences and communication errors. Cons of IT Outsourcing in general have many to do with this specific setback.

From language to time, differences in location and culture can make it difficult to make an effective collaboration. It’s important to continue working seamlessly at the same time and have quick access to communication channels.

To prevent this issue, setting a time to work for both parties is necessary. Time differences, regardless of the location, can be solved by choosing a time when both parties can contribute work hours.

Language difference is more difficult than time difference. To prevent this, make sure that the external partner speaks the same language as you do. This relieves the issue of misunderstandings and creates progressive discussions on the business’s growth.

Loss of Control & Visibility

While relying on an external source relieves your team, it also means losing a portion of control of your business processes. Outsourced employees will have control over functions and processes to a certain degree since they will manage them. This applies to IT services, customer support, and manufacturing. 

Because of this, their timeline, their procedures, and their systems are variables you cannot dictate. It can lead to setbacks in service quality that are potentially damaging to maintaining standards. Should a third-party contract employee make changes that don’t align with the business, the effect could be too massive to repair.

To prevent such instances it’s important to maintain consistent communication and guide them to the objectives of the business itself. Ensuring that they’re aware of what you request and being notified of the changes they make creates visibility and a sense of control over their actions.

Potential Security Risks & Data Breaches

A big factor in the cons of IT Outsourcing is data breaches and security risks. Its dangerous repercussions could result in the leakage of data from outsiders, including the private information of clients.

A foolproof solution is to create an impassable outsourcing contract to protect the security of your firm from such events. It’s important that every detail from the contract is implemented and highlights the repercussions of misuse regarding your company’s data. Having both parties sign non-disclosure agreements prevents the breaching of your data and security issues as well.

Dependence on the Outsourcing Partner

The biggest issue when choosing to outsource some of your business’s tasks is the sudden increase in reliance on it. One of the few cons of IT Outsourcing is an overreliance on outsourced employees can cause financial troubles and changes in ownership. The worst-case scenario is that a business could even fail.

This is why choosing whether or not outsourcing specific tasks can affect the business entirely is crucial. Mitigating any risks and preventing any errors that could occur should the outsourced employees end their contract must be taken into consideration. 

Impact on Employee Morale

Losing employee morale for your in-house team can reduce productivity. This is because outsourcing, if done effectively, could lead to the termination of other roles. In-house team members will feel anxious over the security of their jobs, further affecting their growth and trust within your company.

Additionally, outsourced transitions can be difficult to keep up with the training required to master it. This could lead to a setback in progress and an increase in funds spent.

The solution to this is open communication between employees and employers. Once their anxieties are alleviated, employee morale may retain its standard mindset. This can increase the in-house team for engagement proceeding to quicker transitions and training.

5 Factors to Consider Before Hiring an IT Outsourcing Company

Keep in mind the many variables to consider if you choose to continue on the path of outsourcing. Different types of outsourcing companies have unique methods of satisfying their client’s needs. Here are a few things you should take note of while browsing companies.

Company size

Take note of your company’s size and if it’s truly necessary to outsource specific tasks. Is the company large or small? Do you have enough employees to evenly plan out the tasks or require more help? 

It’s also important to look into your company employees and their abilities. Whether they can handle the tasks at hand without any detriments to the growth of the business or not is a big question on your necessity for outsourcing.

IT Needs

Another thing to consider is how much of your IT infrastructure requires outsourced employees. Depending on the nature of a business, outsourcing can relieve a company of its maintenance or simply add more costs.

In-house employees who can handle the basic and advanced IT needs of a company that doesn’t require such heavy technological defenses and maintenance should be enough for some brands.

Budget

Your budget remains the key factor whether or not you proceed with IT Outsourcing. Issues such as monetary expenses can be fixed with funding solutions. The question remains if you’re prepared to carry out the necessary costs in acquiring outsourced employees.

It’s also great to take into consideration whether or not you can add in-house employees to nurture your business. Remember, outsourcing is cost-efficient with specialists at the ready to cater to your needs. 

Control Over Outsourced Employees

Choosing outsourced employees should also have comparisons on how much you can control them. Are you allowed to manage them? Are they flexible? How many tasks can you assign them to?

Each outsourcing company has its own rules that govern their employees. Read through carefully on their regulations and rules carefully before you make any commitments. 

Communication

The last thing to consider but certainly not the least is how well you and the outsourced employees communicate. Are you choosing a company that has the same language as you? Does this outsourcing company understand and serve your needs?

Communication between the outsourced employee and the company you’re working with to hire them is crucial. Some outsourcing companies do not allow direct communication with the outsourced employee. As a result, setbacks in communication and deliverables can occur. Meanwhile, other companies like Flexisourcing advantage that allows direct communication and management to exist.

Conclusion

IT Outsourcing benefits can be beneficial if utilised to its full potential. It’s possible to receive enhanced security with your core employees focusing on the business rather than other maintenance needs. Accessing the specialised outsourced employees is also a benefit to expanding resources at a cost-efficient price with global standards. On the other hand, careless planning could lead to a downfall in growth and employee morality. Even more alarming is the possibility of security risks.

Deciding on outsourcing your IT is complex. Luckily, Flexisource IT is here to help you! Unlock the potential of IT outsourcing for your business. Contact Flexisource IT today!