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Insights

2 min read

IT Outsourcing

Nov 20, 2018 3:51:00 PM

Decades after the explosion of information technology, organisations anywhere in the world are re-evaluating the cost-benefit of IT Outsourcing and the forces that drive it.

IT outsourcing. Discover why old is new.
The outsourcing of IT functions is not a new thing. Many businesses and schools partially or completely outsource IT functions (including IT management) to provide themselves with more resources, better technology and a more proactive approach towards cost-efficiency. In 2016 the dynamics of the IT outsourcing are expected to change more than ever as clients start to focus their attention on better results, quality, security and seamless integration rather than solely on the price.

What are the pros and cons?

Outsourcing is no longer just about cost saving; it is a strategic tool that can increase productivity and competitiveness 10- to 100-fold.
Outsourcing allows you to consider what work you’re doing that others could perform better so that you can focus on your core business. However, like most business opportunities and tactics, there are upsides and downsides to outsourcing parts or all of the IT functions.

Is there a winning strategy? Benefits to Outsourcing.

  • Preserve your capital for other investments
  • Reduce your costs
  • Improve your operational flexibility
  • Increase your service levels
  • Reduce your management overhead
  • Rapidly deploy new capabilities then you may like to consider
  • Meet your tactical and strategic objectives faster than you could otherwise
  • Obtain skills you can’t afford to hire on a full time basis
  • Supplement existing resources as and when required
  • Improve organisational focus

 
Impediments to Outsourcing. False alarm or reality?

Less control. Some organisations have a reluctance to lose control as they rely on a contractual relationship. However, if things aren’t working it is often much easier for managers to remove a contractor than a company’s own staff – in short some would rather manage contracts than internal processes.

Criticality. Some organisations feel certain functions are too critical to outsource. The counter argument to this is that outsourcing pivotal functions to specialist can result in them performing the functions more effectively eg. Payroll and IT.

Employee resistance. Outsourcing often involves breaking down organisational structures to enhance efficiency which in turn changes job roles and responsibilities. When employees resist, companies should respond with proper communication and training.

Topics: Insider

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