• Is IT outsourcing ever a bad idea?

Outsourcing IT services can take a world of cost and complexity off your shoulders, leaving you to focus on running your business. It isn’t always the right option for a company, though. A variety of factors contribute to the success of an outsourcing relationship, and if they’re not all in place, it might be worth thinking twice about putting your IT services into the hands of a third-party provider. Here are some warning signs to watch for.

Functions that are too strategic

Outsourcing the things that differentiate your business from the competition is a bad idea. These are typically things that are strategically important to you, and they exist in your IT operation.

There are two aspects to your IT function. The first involves the everyday tasks that keep your IT running, such as patching software, monitoring networks, running server diagnostics, and answering IT support calls from users. That brings no financial benefit to your business, and so it’s ripe for outsourcing to a provider with the experience and resources to do it cheaply and more efficiently.

The second aspect of IT is one that many companies never develop: the strategic use of technology. This uses IT to add value to business processes or even create new services. You might have a secret project to slash costs in your repair fleet using truck-based IoT sensors. It might include the use of predictive analytics to route engineers, packing more jobs into each working day and conserving fuel.

You’d want to keep control of that project because it’s strategically sensitive. You understand how the project will affect your business and how you want to implement it. Bring in a consultant to help, but handing off a single custom project to a third party would remove your control of a key differentiating technology service.

Focusing too much on cost

Outsourcing can save money, but trying to drive down costs too much can impact the quality of the service. This is especially true in complex projects with many moving parts, like software development.

For example, one easy way to drive down the cost of software development is to outsource everything to India. However, this can introduce an array of logistical, cultural, and communications problems that could scupper the project.

Are you prepared to conduct conference calls with people many time zones away? Are you confident that you can overcome language barriers to explain detailed technical requirements? Are you sure that an overseas provider used to a different way of working will meet your stringent process and security guidelines? These challenges could impact the quality of your project.

Instead of outsourcing the entire project elsewhere, it might be worth bringing in local contractors that report to an in-house project manager instead. That way, you can keep control of the project, even though it means investing more in skills and development services.

An outsourcing company that can’t meet your needs

IT outsourcing only works if your partner has a professional, high-quality approach to the job. Due diligence is important to ensure that your supplier offers service level agreements that will fit your needs. Their processes must also resonate with yours; An outsourcing company that doesn’t follow through on technical support issues to ensure that they’re resolved may end up being more trouble than they’re worth.

When your systems aren’t mature enough

Even the best outsourcing companies can only work with what they’re given. An outsourcing project will be difficult with IT infrastructure that is too old and difficult to support. Obsolete hardware, out-of-date operating systems, and bespoke software from long-defunct companies will make it difficult to hand your infrastructure off to an outsourcing provider.

None of these problems are insurmountable. They may prompt a new approach to the problem and a reframing of what you want to outsource and how. Thinking these things through now can avoid a lot of future headaches and cost from inappropriate outsourcing relationships.



 

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