Many organizations in different markets and industries are outsourcing parts (or all) of their IT functions (including support, development, help desk, data storage and others). Why are they outsourcing? What are the potential benefits of outsourcing?
- Helps the company bottom line – saves money. Many companies find lots of savings in outsourcing. The savings may be from better efficiencies pursuant to economies of scale, lower labor costs and other factors.
- Improved security. Strong security (for example, around the protection of consumer or health data) is the lifeblood of an outsourcing vendor’s business – and often, this level of security is higher than a customer could realistically achieve when keeping the functions in-house.
- Increased scope of expertise. Customers have access to a global network of experts at the outsourcing vendor, rather than simply the (comparably) small number of subject matter experts at their own shop. The increased access to expertise can lead to more innovation and operational improvements.
- Better service levels and improved technology. Unlike their customers (which concentrate on their other core businesses), IT is the only business the outsourcing vendor likely is in. Therefore, they may offer higher service levels and state-of-the-art technology to attract and keep their customers.
Hmmm, it sounds like there are a lot of benefits to outsourcing – so should I do it?
There are risks and negatives with outsourcing (like with hiring any service provider). However, it is worthwhile to look into a potential outsourcing, how the benefits above may work for you, and how outsourcing could impact your bottom line.