This week on NVTC’s Blog, Business Development, Marketing & Sales Vice Chair Jenny Couch of member company Providge Consulting shares potential benefits and risk factors of outsourcing your tech department.
Maintaining an in-house IT department is the right decision for many businesses, especially those where IT is a central, or critical aspect of the business.
But for many companies, maintaining an IT department that is fully equipped to tackle any IT need your company may encounter can be costly and inefficient.
Outsourcing certain functions of your IT department may deliver a number of benefits to your company. But, in assessing whether outsourcing is the right decision for your company, you should also consider the potential risks.
Let’s take a look at some of the potential benefits, and consider some risk factors of outsourcing your tech department.
- Accommodate shifting projects and priorities. IT needs fluctuate constantly. It may be difficult to shift full-time employees who were hired for a specific skill set around as your company’s IT needs change. By outsourcing, you can easily accommodate changes as your IT projects and priorities shift.
- Deploy resources where you need them, only for as long as you need them. Going through an operating system upgrade? Implementing a new ERP system? These are projects that will require a temporary increase in resources. Hiring full-time employees to fulfill short-term needs is expensive, and time consuming. Through outsourcing, resources can quickly be scaled up and down to accommodate project needs, or occasional increases in departmental workloads.
- Gain access to talented specialists. Certain IT functions, or software require support from highly-qualified specialists. These specialists often have years of experience, extensive training, and a hefty price tag. Bringing them on full-time is expensive. And that’s if you can even find such specialists in the first place. By relying on an external vendor who will either already have these specialists in-house, or experience recruiting these specialists you can drastically reduce the time and money involved in recruiting and retaining such specialists.
- Free up internal resources. Roles and responsibilities change over time sometimes for the better, sometimes for well, the not-so-better. Your IT team may have picked up responsibilities overtime they were never supposed to support, thereby neglecting their original scope of responsibility. By outsourcing certain functions, especially those functions that can be easily outsourced, your staff can gain back the critical time they need to perform their role effectively.
- Cost savings. Ultimately, when done right, outsourcing your IT needs, can significantly reduce you IT costs. If you’re able to better accommodate shifting projects and priorities, deploy resources where you need them for as long as you need them, gain access to talented specialists when needed, and free up your internal resources, you can reduce costs across the board, and improve the effectiveness of your overall IT department.
And now for the risks…
- Your vendor’s approach and plans may not align with your strategic plan. Are you planning to rely on an ERP system to support your back-office functionality? Is there a desire to move to the cloud now or in the future? What are your plans for scaling and growth? Before you consider outsourcing IT functions you need to have a thorough strategic plan laid out so you can understand where an outside vendor could provide support. If you simply start trying to outsource an IT function without considering your longer term plans, you run the risk of engaging a vendor that is not aligned with your strategic vision.
- Some IT functions can’t be easily outsourced. Some IT functions lend themselves naturally to outsourcing. Project management support, help desk support, etc. But other functions don’t fit so naturally with outsourcing. If you are considering outsourcing, it’s important to fully evaluate the ease with which you might be able to outsource the function, as well as whether you will easily realize benefits by outsourcing that particular function.
- Employee morale may drop. If you plan to cut current staff to accommodate a transition to outsourced tech support, you need to be prepared for decreased morale amongst remaining staff. Lay-offs are never easy, especially if cuts are occurring purely to save costs by outsourcing certain functions.
- You run the risk of “getting stuck”. One of the things we emphasize at Providge is documentation and training. We do this because, consultants, and consulting companies, by nature are a finite resource. Eventually, we will leave. The project will wrap up, or the additional support will no longer be needed. If the efforts undertaken by your consulting team during their engagement are not well documented, and/or no training has taken place with your team you may find you have to continue to to unnecessarily rely upon your vendor. No documentation? No training? Get used to the extra bodies in the office.