The Pros and Cons of Outsourced IT Services

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Written by Allie Delos Santos

Contents

 

All businesses operate to fulfill a particular market niche, but companies need various infrastructures and processes to stay ahead. An IT infrastructure can be challenging to manage in-house, but it’s essential to keep pace with today’s tech demands.  Companies looking to grow and expand must find a solution to this problem.

This article explores how outsourced IT services help companies manage their growing technology needs. We also share the potential downsides of outsourcing information technology.

 

Benefits of Outsourced IT Services

Benefits of Outsourced IT Services

Outsourcing IT services is when you employ an external company to manage your tech needs. A third-party outsourced IT provider can handle everything from implementing operating systems and installing software to file backup and network security maintenance.

Companies that outsource IT typically work with an offshore provider, leveraging the less expensive labor costs available overseas. Although businesses across all sizes and sectors will benefit from outsourced IT services, small to mid-sized companies (SMEs) are at an advantage. They can reinvest the time and money saved from outsourcing into growing their business and improving operations.

Companies can gain immediate benefits when they outsource IT support to a reliable business process outsourcing (BPO) provider. Here are the common benefits of IT outsourcing.

  • Massive Cost Savings

Managing IT in-house saddles companies financially and with labor-intensive tasks. IT professionals command high pay due to the complexity and intricacy of their skills. For many SMEs, the costs associated with retaining IT employees can be limiting.  

You can reserve all the time and money spent on research and development for information technology to your core strength. With an outsourced IT service, you can lower the expenses tied to retaining employees and allocate more to growing your company. 

The cost-saving of outsourcing can reach up to 70%. You can then pass these savings to your clients or reinvest them in the business. 

  • Predictable Budgeting

The quantity of resources that unpredicted IT problems consume is a cause for concern. Deciding to outsource IT gives you a standard price to pay each month.

If you have a simple and small infrastructure, you can get away with only the necessities. Outsourced IT services also allow you to scale up as your computer needs expand in relation to your business size. Similarly, you can scale down when needed, particularly during the off-season or in times of financial challenges.

  • Wide Range of Skills

Despite the range of skills of most IT employees, they, too, have limitations. Occasionally, an issue that your employees can’t fix will spring up, potentially crippling your operations.

With outsourced IT services, your maintenance capabilities are not limited to the knowledge of whoever is on your team. BPO providers carry a long line of experience and have many people with superb skills, making sure to cover your IT needs on all fronts.

  • Reliable Technicians

The time it takes to onboard new hires and prepares them for the details of your infrastructure can strain your resources. This is particularly draining on your finances if you have high turnover and the skills of new employees are not enough.

With a reliable IT outsourcing provider, you don’t have to worry about in-house training or turnovers in personnel. They will manage the recruitment and training process on your behalf. 

  • Quality Service

Information technology is not a primary area of knowledge for businesses. Unless your company belongs in the tech industry, you may not be able to accurately assess the IT skills of a candidate, let alone train them about the ins and outs of your computing infrastructure.

Most businesses lack the necessary resources to onboard IT talent, and outsourcing levels the playing field because BPO providers have access to caliber technicians. With outsourced IT services, you’ll never be distracted by employee onboarding.

  • Active IT Maintenance

In the field of computing, new issues arise every day. An employee with years in the same company typically has less breadth of knowledge. Their skills are limited to the issues familiar to their company.

Conversely, an employee from an outsourcing provider has more experience and skills from working with several clients across various sectors. Additionally, outsourced IT services constantly update their knowledge regarding the latest tech developments. As a result, they have more IT knowledge available to you through their teams.

  • Improved Productivity

More than half of companies that outsource IT do so to improve productivity. When you subcontract IT to a BPO agency, your staff can concentrate on higher-value activities. Even if you keep local technicians, your provider can do all the heavy lifting.

The result of outsourced IT services includes improved productivity and streamlined workflow. With an outsourcing company at your service, you can leave complex IT tasks to the experts and focus on your core strengths.

  • Instant Implementation

Whenever you need to implement a new program, an outsourced IT provider can immediately do the task and ensure organization-wide compatibility. 

Keeping this work in-house, including network adaptability and program implementation, can hamper your operations for weeks or months on end. With outsourced IT services, you don’t need to wait for implementations and pause operations.

  • Lower Risk

A BPO provider by your side helps eliminate most cyber-attack threats and potential downtimes to your IT infrastructure. Problems such as website inoperability or information breaches can set your company back and damage your reputation. An outsourced IT service can help you prevent these problems.

Another equally challenging aspect of information technology is the changing regulations and laws at the federal and state levels. Part of the job of a BPO company is to keep up with these developments. With their help, you can always remain compliant.

  • Better Customer Service

Your BPO partner is working behind the scenes to monitor your systems constantly. As this is happening, you can see a decrease in service downtime and interactions, which can improve customer satisfaction. Your company will rarely suffer from unresponsive portals or downed customer service lines with an outsourced IT provider.

  • Scaling Staff

Hiring new staff in information technology poses challenges, mostly with cost and time. However, by outsourcing, you can integrate experienced IT professionals into crucial projects and tasks immediately.

The staff is highly scalable too. This means you can bring on as many or as few employees as you need. When a project ends, you can easily reduce staff members.

This added flexibility offers you unprecedented control over project management without the long time needed to hire and train full-time employees. 

  • Improved Focus

Outsourcing IT services doesn’t mean you lack IT in your company. Sometimes outsourcing is done to assist weaker areas of the company or help with large projects.

Ultimately, outsourcing lets full-time employees concentrate on their specialties and prioritize goals. For example, if you outsource information technology to pay more attention to customer inquiries, then your staff can prioritize more pressing matters.

 

Risks of Outsourced IT Services

Risk ahead road sign- business risk concept

Risks are what you are more likely to encounter when outsourcing rather than absolute disadvantages. Here are some potential downsides to outsourced IT services.

  • Possible Downtime

You may experience delays if there are no available staff to fix your issues right away. You can easily avoid this problem by hiring an outsourced IT service with sufficient personnel.

  • Security Concerns

You delegate your security maintenance to an outsourced IT service; however, you might not be sure about their internal protocols. You risk implementing poor protocols if you work with the wrong provider. To prevent this, make sure to ask the right questions before committing.

  • Misaligned Goals and Objectives

The best IT provider collaborates with you to help you achieve your goals. So, beware of providers who will insist on processes that hamper your functionality.

  • Limited Flexibility

The wrong vendor may impose proprietary software on you. In that case, you might end up stuck with them, particularly if they don’t document their work on your network. But you can avoid this by partnering only with the best outsourced IT provider and doing your due diligence.

  • Less Control

One factor that causes businesses to avoid outsourcing is the lack of control. Some are uncomfortable with outsourcing for fear of losing control. A good way to solve this is to set your expectations and tell your provider how much control you are willing to turn over. A good BPO provider is one to which you can entrust the entire function. 

  • Lower Quality

Quality can be a source of problems, depending on whom and where you’re outsourcing. While some BPO companies provide excellent infrastructure with experienced professionals, others offer subpar quality services with less qualified staff.

This problem is entirely related to the provider you choose to work with. So be sure to do your due diligence and research your potential provider carefully. Before signing a contract, don’t forget to analyze their performance and service quality.

  • Possibility of Miscommunication

An important factor to consider is the possibility of miscommunication. Your collaboration can suffer greatly depending on the provider you decide to work with. Long periods between responses and inquiries can be problematic since it hampers operations.

If, for example, you are having problems with privacy and security, fast and open communication is necessary. If you outsource cybersecurity to a third party, then lapses in communication can greatly impede efficiency and cause more problems in return.

  • Low Employee Morale

Depending on the extent to which you outsource services, outsourcing may also affect your employees. No staff wants to think their job is on the line, especially for important services like IT and cybersecurity.

Employee morale is something to consider. If your outsourcing is extensive, existing staff may become less motivated. Keep in mind that disheartened employees tend to grow frustrated in their environment and work less, leading to potential quality loss or, worse, turnover.

 

Pros and Cons of Different Types of Outsourced IT

Pros and Cons of Different Types of Outsourced Services

There are different types of back-office outsourcing services. Each of them has an advantage and disadvantage. It’s essential to familiarize yourself with them before beginning to outsource any function.

Here are the types of outsourced IT as well as their pros and cons.

Local Outsourcing

Working with a provider in your home country is called domestic or local outsourcing. Some benefits of this solution are that you share the same cultural background, are in a similar time zone and are fluent in the same language. Plus, it’s easier to collaborate in person if necessary.

A major con is the cost of outsourcing. You are more likely to pay higher fees than with offshore outsourcing. This is especially true for businesses in Western Europe, Canada, and the US. Additionally, you can’t guarantee high-quality service just because BPO providers are local.

Offshore Outsourcing

This solution means you’ll work with an outsourced IT support company from another country where labor is as proficient as locally, but labor costs are lower.

Offshore outsourcing is the best way to save on infrastructure and labor costs. Plus, it allows you to tap into a particular skill set that may not be available in your country or is better elsewhere. 

The downside of offshore outsourcing has to do with reliability, especially if you hire a low-cost provider. You can avoid this by doing your due diligence before signing a service level agreement (SLA) with any contractor.

Distance may also pose issues. For example, collaborating on a project can take longer if your time zones are not the same. If you send an email early in the morning, they might not be able to see it until after the end of the day.

Fortunately, there are BPO companies that staff shifts 24 hours a day to be on the same schedule as their clients. You can avoid problems related to time zone differences by working with a provider with a flexible schedule.

Nearshore Outsourcing

Nearshore outsourcing is when a company works with a nearby provider outside of your country. For example, if your company is in the US, nearshore outsourcing would be in Mexico, whereas offshoring would be in Asia.

Nearshoring gives you the advantages of offshore and onshore back-office outsourcing while reducing the risks. You can be in a closer time zone, but infrastructure and labor costs are still lower. There’s also a lower risk of delays in project turnover. 

Finally, nearshoring is a strategy for penetrating neighboring markets, which may be a logical next move for some companies.

 

Advantage of Outsourced IT Services over Break/Fix Solutions

Outsourced IT services are not simple break/fix solutions. A break/fix operator visits your premises whenever something breaks, and they typically charge hourly fees to diagnose and solve the issue.

Hiring a break/fix technician may seem more affordable because they’ll only charge you when there’s a problem. However, break/fix services tend to cost more in the long run since they are not incentivized to finish work quickly. Similarly, the provider has no incentive to provide a stable solution since they can charge more if they take multiple trips to fix a problem.

Unlike break/fix solutions, an outsourced IT service offers a partnership with your business, regularly monitoring your systems in exchange for a standard monthly or annual fee. Outsourced IT support services exist not only to solve problems but to ensure your network runs smoothly.

Outsourced IT service providers are more motivated to find a quick and stable solution if a problem occurs. After all, it’s better for both parties if they solve the issue and neutralize the threat immediately. Finding a solution the first time means they need to work less, and it encourages you to extend the partnership.

 

What Are the Most Commonly Outsourced IT Services?

Software as a service, business modern technology, common services being outsourced

Outsourced IT service is not a one-size-fits-all solution. Every company has unique IT needs. Because of this, outsourced IT service providers offer a variety of tech solutions and can take care of a portion of your processes or your entire department.  

For some companies, a hybrid approach where some parts of IT remain in-house while outsourcing is the optimal solution. Here, we look at the commonly outsourced IT services.

  • Security

Data hacks are not uncommon in most companies. Cybercrime is becoming more frequent and severe. The financial repercussions of data breaches for each company sit around $3.86 million.

Outsourcing gives companies access to strong protection against breaches with state-of-the-art security measures that might otherwise be too expensive when done in-house. You can take advantage of robust threat detection and faster response times with a team of experts who regularly monitor your network. 

  • IT Service or Help Desk

Outsourcing the service help desk relieves your in-house team of the hassle of solving daily IT problems and frees up their time to concentrate on more important matters. Plus, a 24/7 help desk offers fast incident response time with the knowledge to solve any issue, whether minor or severe.

  • Identity and Access Management

Most companies are running multiple systems simultaneously, requiring a complex identity access structure. Identity and access management (IDAM) can be challenging to do in-house, especially in large companies, so outsourcing is a good alternative.

An outsourced IT service ensures that your IDAM is maintained with watertight measures, limiting user access and protecting private information. Your service provider will remove the rights of employees who leave your organization while onboarding new hires equally as quickly.

  • Cloud Services 

Almost all business success stories involve their IT infrastructure’s efficiency, effectiveness, and security and taking advantage of the cloud. Managing IT in-house can be difficult, not to mention the enormous costs and security risks. Outsourced IT services help companies migrate to the cloud with minimal downtime and no data loss.

  • Network Implementation and Maintenance 

For many companies, managing network implementation and maintenance of system programs can be confusing and labor-intensive. With an outsourcing provider at your side, you don’t have to oversee system updates by yourself because they manage it for you. As a result, you can focus on business as usual.

 

The Bottom Line

Outsourced IT services can bring huge time and cost benefits to your company. But it’s important that you do your due diligence by researching a variety of providers and getting to know your provider of choice well before committing. It also pays to discuss your outsourcing decision with employees who might be affected.

You should carefully consider the pros and cons of outsourcing your IT services before deciding which path you’ll take. With its potential impact on your overall business, the decision to outsource should not be taken lightly.

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