The outsourcing market is ever on the rise. In the interest of reducing costs and enhancing business agility, many organizations are starting to look to third parties to provide essential services such as human resources, accounting, marketing, and IT. Especially for smaller businesses, which may not have in-house resources or expertise, this approach makes a great deal of sense.
It’s also an approach that comes with a great deal of risk if done improperly.
“Trusting a third-party provider for all of your company’s IT needs can create serious security issues,” reads a piece on Informationweek. “And outsourcing is not a panacea. If your business is having trouble managing technology on its own, it’s likely that an IT outsourcing provider will be bound by the same constraints that make in-house management difficult.”
So what sort of systems and processes should you have in place in order to maximize your chances of success when outsourcing? What resources does your organization need in order to effectively outsource its IT services? And in what situations should you handle things entirely in-house?
Let’s talk about that – here are three things you’ll need to see to in order to safely outsource IT.
1. Carry Out Exhaustive Research
When you entrust a third party organization with the management of your IT infrastructure, you’re basically putting the success of your business squarely in their hands. There isn’t a single modern organization for which IT services aren’t important. What that means for you is that if you aren’t carrying out extensive, exhaustive research into which vendor you should select, you run the risk of losing access to – and control over – mission-critical operations, data, and resources.
“Businesses considering outsourcing IT services must investigate whether the managing company employs security measures as robust as their own,” explains Chron’s Samantha Gluck. “This is especially important when dealing with offshore companies run from a foreign country. While these often have impressive security protocols, a risk of one of the outsourcing company employees breaching security always exists. Since the foreign country may not have laws protecting intellectual property or other private data, businesses may find it difficult to prosecute such illegal activity.”
2. Understand The Actual Cost
IT outsourcing can certainly save you money – that’s one of the chief draws of it. If you don’t carefully manage costs, it can actually end up borking your budget in more ways than one. The reason, according to Tech Republic’s Jack Wallen, is that there are a number of costs that most don’t consider.
“When you schedule an appointment with your outsourced IT company, you’re going to be charged for the drive time there and back,” he explains. “And what about when that outsourced engineer has no idea how to fix your issue and has to learn on the job? Are you willing to pay for that? It’s one thing if your own employees learn as they go. But it’s a different story when a contracted employee does it. There are other real costs as well, such as when you get recommendations from the outsourced company that aren’t actually needed. Upsales are common and sometimes unnecessary.”
3. Make Sure You Manage Liability
In the event of a data breach, who’s held responsible for damage to your company’s bottom line? Does the vendor absolve themselves of all culpability, or do they have a decent service-level agreement? What about vendor lock-in – do they require you to sign a restrictive, long-term contract, or are you able to outsource on a more day-to-day basis?
Finally – and this one’s especially challenging – if you’re working in a regulated industry, you need to ensure that any vendors you work with are regulatorily compliant. If you work with one that isn’t, either knowingly or unknowingly, it’s your reputation that’s over the fire if protected information ends up compromised.
Outsourcing is a valuable way to free up internal resources, bring in additional expertise, and increase business agility. Just make sure you’re prepared for the additional costs and challenges it presents. Otherwise, you could be in for a very unpleasant surprise.