Outsourcing in IT. Advantages and disadvantages

Companies often outsource certain aspects of their business hiring the services of specialized institutions seeking cost savings and, improved processes, or just to focus on their business strategies. It service provider

Outsourcing IT is becoming an option chosen by many companies to leave the operational side technology in the hands of specialists and professionals outsourced.

A good strategy for IT Outsourcing can be a smart move that elevates the company to an ideal situation of greater productivity and competitiveness. However, there are also some associated risks that can make outsourcing IT services not beneficial for the business.

In this article we will address the outsourcing of IT services, commenting on the main benefits that are obtained and what are the inconveniences that it can cause.

What is IT Outsourcing

When an external company is hired that has its own resources and infrastructure for the execution of processes and tasks related to information technology, it is talking about IT Outsourcing.

Outsourcing can range from outsourcing for the management of the entire IT area of a company to the outsourcing of specific processes related to IT, such as systems management, attention to the client, backups, hardware infrastructure, etc.

The outsourcing of IT services provider implies leaving in the hands of a company specialized in IT managed services, all the IT aspects, and needs of the organization.

What are the benefits of Outsourcing

Companies turn to Outsource due to the benefits that this business system gives them. Outsourcing provides some advantages related to:

Cost reduction

Perhaps the main reason that most companies go n the outsourcing IT services provider is reducing the economic costs. When an external company takes charge of the IT department or services, costs are reduced mainly in two areas:

Reduction of labor costs. The IT service provider company has qualified professionals for IT management, so the company saves personnel costs in this area (salary, quotes, refresher courses, and other related costs).

Infrastructure cost reduction. Many expenses related to investment and maintenance in IT infrastructures will be reduced due to collaboration with an external company.

Focus on business

Outsourcing allows the company to focus on the business and its strategies to generate value and maintaining a highly competitive level. Outsourcing allows the company to be more dynamic and flexible and to set new goals and objectives.

Increased efficiency

With the competent management of a company’s IT services provider, greater efficiency in business processes will be achieved. Technological resources affect all areas of the company so efficient management of them will have a positive impact on the entire organization.

The IT service provider will have access to the latest technology ( at present, for example, artificial intelligence or IoT ) so the company will benefit from this circumstance, that managing IT internally could hardly do so.

With IT Outsourcing there is a reduction in risks related to IT management since these are assumed by the service provider, who assumes and manages them.

Ensure continued service

IT management has become an essential part of business today, generating a heavy reliance on technology to develop its business model. An IT service provider guarantees that the service has high availability and is a continuous service, providing solutions to incidents and problems that may interrupt it (disaster protection, high availability, cloud backup, and other services).

What disadvantage could Outsourcing have

Decide that IT management is carried out externally to the company could entail r a number of drawbacks that must be considered before making the decision of Outsourcing IT.

Personnel issues

The IT service provider will have personnel with training and experience in the different areas of IT to be able to carry out effective management of it. This situation makes the company decides to hire services that do not have qualified personnel in new technologies, which can be a long-term problem (brain drain or difficulty if you want to internalize IT management, for example).

The IT outsourcing can make staff arises whether the company can outsource other services and if your position may be at risk.

The threat to data security

Information is one of the most important assets for a company, so it is essential to properly select the service provider and add confidentiality agreements to service contracts in order to guarantee data security (avoiding theft, exposure of information, and other risk situations with company information).

Hidden costs

The subcontracted services and their costs are included in the service contract with the IT provider. However, many times other associated expenses are generated that are not included in the service that involves an extra cost and that can end with a deviation and therefore a negative impact on the benefits of IT Outsourcing, such as cost reduction. For example, if the IT provider is located in another country, an extra cost may be incurred in support phone calls.

In today’s market, due to the constant advancement and innovation in communication technologies, the IT department has become the core of any company. Having an efficient IT service provider can be a great competitive advantage, so outsourcing the service to a specialized company can be a great move that brings great benefits.

Although there are many benefits obtained with IT Outsourcing (cost reduction, risk reduction, and efficiency increase), the loss of control of a vital area and the threat to data security, can make IT outsourcing not as effective as you would like.