The Best and Worst Things about Outsourcing an IT Company

The Risks and Rewards of Outsourcing IT While outsourcing might sound like a dirty word to some, managers know that, in today’s ultracompetitive economy, outsourcing is an effective and often necessary tool in organizing a business.

Small businesses often struggle to get the most out of their computers, servers, and networks, owing to their lackluster IT expertise. Here’s how hiring an IT outsourcing service can help your business—but beware, there are risks involved!

Cut Costs and Focus on Your Core Business Operations If there’s one reason why companies choose to outsource their IT, it’s to save money. The costs of recruiting and maintaining employees solely devoted to IT are significant. If you hire an IT expert, you will have to pay their wages, health care, and even additional taxes. For small businesses, this is often out of the question.

Sometimes employees with computer skills become the part-time IT expert—much to their disadvantage, usually. They’re can be overwhelmed with meeting their job responsibilities in addition to bustling around the office assisting colleagues with their computers. Situations such as these are bad for morale and productivity. By outsourcing IT to an outside vendor, your employees can focus on their tasks and your business can focus on its core functions.

If your business is able to rally its resources around its core functions by outsourcing IT, it will become more profitable. You will also save on the cost of hiring an IT team. Businesses that outsource their IT can gain a competitive edge by passing these savings on to their clients. You might be able to sell your product or service for less than competitors who invest in maintaining in-house IT expertise.

Finally, using an IT outsourcing service will allow your business to benefit from the best IT tools. Think about it: your business can only invest so much in IT, while the outsourcing service’s whole business revolves around technology. Who do you think will have better software? Your business might not have the money or manpower to regularly update its software and networking tools, but this is exactly what dedicated IT vendors are there for.

Prepare for Less Control over and Greater Reliance on Vendors Yet this is where the benefits start looking more like risks. In terms of software, your business can become “locked in” to an IT vendor who installs proprietary software on your network that no one else can service. This is an unsavory—and rare—business tactic, but some unscrupulous IT outsourcing services continue to take advantage of small businesses with little to no IT abilities.

Some critics of outsourcing point out that a business can never have the same control over an IT contractor as they would have over a full- or even part-time employee. It’s true: your IT service will have a level of autonomy that implies a loss of control. But do you really need to be in direct control of your IT service? While the outsourcing service maintains your IT capability satisfactorily and acts in good faith, there is little that you can do as a manager to improve the situation (unless you’re an IT expert yourself).

Maintain Clear Expectations and Negotiate the Service Agreement In the end, some of your staff (and even you) might be uncomfortable with the idea of relying so heavily on outside people for your IT needs. These contractors might not understand your business’s practices, or they could bog you down with new software that you didn’t really need. But as long as you make your expectations clear, and negotiate an acceptable service agreement with the IT vendor, it is overwhelmingly likely that you will improve your IT capabilities while reducing your business costs.