Most Business owners are conflicted between outsourcing some of their IT needs or doing it in-house. The debate comes down to saving money in the long run. Both methods have their own merits and demerits. Let us look at it and hopefully help them make a decision that would benefit their business.
Pros of Outsourcing Your IT Needs
1. You save a Lot of Money
Business owners may not think they are saving much money today, but they will when they look five years from now. Outsourcing helps save money by reducing the capital costs incurred by the business. For example, PC purchases and software licenses will no longer be necessary.
Your employees also no longer need to learn how to operate certain programs, such as payroll, accounting, and CRM software, because your business uses a dedicated workforce for that.
By outsourcing other software services such as help desk, you can also take advantage of their support services without hiring an in-house IT staff.
2. Greater Range of Expertise
A business owner will access diverse and advanced IT solutions at a lower cost. If the business operates in different countries, they can take advantage of offshore services.
Offshore outsourcing also means that if a business expands to a different country, you don’t need to find new software and hardware providers or recruit new employees. You just need to find someone who can manage the migration process and then take advantage of an already-existing team of experts.
3. Flexibility and Adaptability
Whether business owners run a small business or large corporation, time is of the essence. They have to stay competitive. With outsourcing, they are not locked into one provider. They can find a managed IT services provider, a great example of one is MyTek, with the best price and solution for their business.
There are also situations where outsourcing solutions is more practical rather than in-house. For example, certain businesses face seasonal variations in demand for their services. They can consider outsourcing the IT department because they would not need to pay salaries for the entire year.
4. Fast Implementation of New Strategies
Business owners can outsource their IT services or hire an IT company and take advantage of the skills and experience of a team of experts. It is the best way to quickly implement new strategies, such as upgrading software or implementing a new marketing campaign.
5. Maintenance and Support Contracts
Businesses can take advantage of their provider’s maintenance and support services. It can save money in the long run because they would not have to hire additional staff to take care of such tasks. The process is also quicker and easier than hiring extra staff.
6. Employee Retention
Often, the reason why many businesses choose to outsource is that it saves money. Because costs are reduced, profits are also increased. These profits can be used as incentives for employees already employed in the business.
Employees are more likely to feel like part of a team when they work for a company that is doing well financially and expanding its reach within its industry.
Cons of Outsourcing Your IT Needs
1. Communication Problems
Some businesses outsource their IT needs to the wrong providers and end up with poor quality products or inefficient services due to miscommunication. This issue gives consumers a negative perception of the business and hurts their sales. It takes time to find the right provider, so it is important to make sure that you do your research.
2. Lack of Control
Many business owners complain about the lack of control over their IT systems and data. Outsourcing IT solutions can give businesses access to advanced technologies that only highly-trained technicians can access and control. Therefore, if there is a system problem, it delays important initiatives within the business.
Business owners must address this problem by setting up control systems and regularly testing the system.
3. Security Problems
Outsourcing means trusting the data and information of your business to another company. If you do not have a strong contract with the provider, there is a chance that confidential information may be leaked or stolen.
Another problem businesses face when they outsource their IT needs is that the companies they give their data use this information for advertising purposes. This issue can lead to a conflict of interest and affect the business’s reputation.
4. Going through a Company Restructuring
When businesses outsource, they need to go through restructuring to allow them to deal with the change in the management process, workflow, and technology.
Outsourcing can also mean that employees who are not required are fired or demoted, which can result in resentment among your employees.
Pros of Doing Your IT In-house
1. You save Money and Get Better Tailored Services
Outsourcing IT solutions can be cost-effective, but that does not mean that in-house solutions are more expensive. On the contrary, most businesses manage their IT needs internally. It is because in-house IT solutions are optimized for your business.
2. It Creates an Environment for Innovation.
Outsourcing IT solutions can present problems when it comes to innovation. If a business is outsourcing its technology, it may be unable to keep up with the latest market changes.
Besides that, when you have your IT department under one roof, everyone is working together more closely and is able to provide better services to your customers.
3. Increase Productivity
Every business needs a good IT system to be competitive. When there is a breakdown in the system, you need someone onsite who can fix it as soon as possible. It is why having an in-house IT team who can deal with problems internally will increase productivity within the business and improve customer service.
Cons of Doing Your IT In-house
1. Your Team can’t Get Everything Done
Outsourcing means that not all of your in-house team can get everything done, which means that some tasks will not get completed, and the quality of service will suffer.
Getting a team of competent IT employees takes time and effort. It is because the employees must be vetted, and background checks must get performed. However, if a team is outsourced, the vetting process can get eliminated, and outsourcing companies do the background checks.
The reviews can then be condensed into shorter time frames, saving time and resources within the business.
3. Personnel is Expensive
Having an IT department requires a large number of employees who are highly skilled and trained. These costs will take a significant investment in payroll, salaries, and benefits packages.
Besides, staff are expensive to employ when considering the cost of hiring, training, and maintaining them. One example of offshore outsourcing companies is Integra Sources which provides different cooperation models based on individual needs.
4. Problems with IT Staff Turnover
IT staff can be hard to replace. Good IT employees take time to find and train on the job, which can be a costly investment for a business.
Failing to find the right person can lead to a project or initiative failing or being put on hold.
To sum it up, both models have their upside and downside. You just have to choose one that works for your business, given the prevailing circumstances.