Why Outsourcing your IT makes Business Sense
It’s rare to find a modern business that doesn’t rely to some extent on information technology in this day and age. Yet IT can also be a stumbling block for the non-tech savvy, particularly for smaller businesses who are less well equipped to keep up with the fast changing pace of technology than their larger competitors.
One possible solution to this problem is to outsource your IT to a trusted company, leaving the technical headaches and regular maintenance and updates to specialists, while you concentrate on core business operations and strategy. For the majority of small businesses, the advantages of outsourced IT far outweigh the disadvantages. In this guide, I want to take a look at both.
The Benefits of Outsourcing
Reduction in Cost
Outsourcing your IT can deliver a number of advantages. One of the major ones is a reduction in the cost associated with recruiting and paying people with the right IT skill set. IT staff are expensive, the average salary for an IT manager in the UK is over £40k plus, of course, you have the costs of recruitment and ongoing training. Add to that a skills shortage in this sector and building your own in-house IT team can prove to be a constant uphill struggle.
Balancing skill requirements
By outsourcing your IT, you keep control of your salary costs and you don’t have to worry about the pitfalls of recruitment. This also helps to balance out your skill requirements; there may be some systems which would never justify having a full-time employee to look after them, but for which you need to be able to call on expertise for configuration or in the event of a problem.
Access to specialist skills
Even if you already have some in-house IT staff, there will always be situations that require specialist skills and knowledge. If you choose to retain a team within the business, outsourcing can supplement their skills when needed and help you to cope with peaks in demand due to seasonal issues or the rollout of new systems.
More effective use of time
Managing and resolving problems with IT systems can be time-consuming. Outsourcing allows you to claim back that time and to make use of it to run your business more effectively. There are added advantages here too; if your systems are running smoothly your staff will be more productive and you’ll lose fewer working hours to downtime.
Up to date expertise
The IT world is a fast moving one and it can be hard for smaller businesses to keep up with the latest developments. That means that you could end up missing out on products or upgrades that could benefit the running of your business. By outsourcing, you’ll gain a partner who is in touch with the latest developments and can advise you as to which are right for your business and which you can safely ignore.
Compliance and security
Of course, the installation and day-to-day running of computer systems are only part of the issue. You have to think about issues including cyber security, compliance and disaster recovery. An outsourced service can help you take care of all of these factors. It can also help with reducing your telecommunications or print costs. In addition, you can benefit from advice as to whether or not to move to the cloud or perhaps switch to a VoIP phone system.
Perhaps one of the most advantageous attributes of an outsourced IT team is your ability to scale your business without having to take on new staff or reduce their hours. This is especially important for rapidly growing businesses or seasonal businesses.
Of course, whenever you take a major step such as outsourcing part of your operation, you need to consider the potential downsides too. For example, part of your operation may be based around software that is unique to your industry. Finding outsourced suppliers with appropriate expertise in this may be difficult, so it could be better to keep that part if your IT in-house.
Outsourcing also raises concerns about retaining control over key systems. In general, these fears tend to be unfounded provided that you choose the right partner. It’s important to select an outsourcing specialist that has an understanding of your business; you are looking to establish a long-term relationship so it’s important to choose your supplier carefully.
You will also need to think about the effect on your staff. If it’s not handled carefully, outsourcing can have a negative effect on the morale of your employees. If you are retaining some in-house IT staff, it’s important to emphasise that the outsourcing operation is there to support the business and work closely with the in-house staff. This can also give internal teams room to develop and therefore deliver greater value to the business in the longer term. That being said, the opposite can be true, with hard to use or outdated software and hardware driving your workforce to despair.
As you embark on an outsourcing project, there are a number of things to bear in mind to ensure that everything runs smoothly and that the project is a success.
Firstly, you need to look at exactly what you want to achieve. Is your main goal to cut costs? Or are you looking for a more efficient operation? Outsourcing isn’t right for every business so you need to make sure it’s right for yours. On the whole, though, modern IT outsourcing is flexible enough to deal with pretty much any business model or industry sector.
Secondly, you need to consider your budget. Although you may be looking to make savings overall, going for the cheapest option may not always be the best option. If IT is crucial to your business operation, you will want to look at balancing costs against the need to have a reliable and fully scalable service that can deal with the challenges of tomorrow as well as those of today. There should also be an acceptance that there are some areas where keeping the service in-house may be preferable. Look not just at the service here but at the relative strengths and weaknesses of your in-house staff and of the outsourcing team.
You need to look carefully at the service level agreement (SLA) that governs any outsourcing contract. Make sure that it meets your needs in terms of the time taken to resolve issues and operations within your business hours. How will it cope when the needs of your business change? Outsourcing needs to be a partnership but you also need a clear picture as to the responsibilities of each party.
Security and compliance are other areas that mandate careful consideration. If you are holding and processing personal data relating to your customers, then even though your systems are outsourced, you are still ultimately responsible for the safety of the information. You need to look closely at what measures are in place for access control, network security and more.
Although you may be looking for a long-term business relationship with your IT outsourcing supplier, it is important to understand how to get out of the contract should you need to. Your needs may change significantly or you might need to switch to a different vendor. Whatever the reason, you will want to understand the costs and implications of ending the contract before its full term is up.
Outsourcing your IT represents a major decision and it’s not something that should be undertaken lightly. There are a huge number of potential benefits, but you must also consider any potential downsides.
Whatever your motivation for looking at outsourcing, you need to do what is going to be best for your business. Management and staff must be fully behind the decision and you need to find the right partner and ensure you get the best value from your IT support plan. Assuming that all of these factors are in place, outsourcing your IT can present a major opportunity to streamline your business.