Information technology is the bedrock of many businesses in today’s increasingly digital world. Some businesses rely on online sales to survive and even smaller businesses rely on IT for basic elements such as websites and financial management.
While some small businesses may have the IT knowledge required to function efficiently and the time to maintain and train staff as to how to use systems, others simply do not have this luxury. These are perhaps the organisations which would most benefit from outsourcing some or all of their IT.
“Outsourcing your IT represents a major decision and it’s not something that should be undertaken lightly… but For the majority of small businesses, the advantages of outsourced IT far outweigh the disadvantages,” says Gildas Jones of Bristol-based IT Company Dial a Geek.
So what are the general advantages and disadvantages of outsourcing IT to external companies? Is there a point at which it becomes necessary in order for a business to continue to function or remain viable?
Table of Contents
Outsourcing – advantages
Cost reduction
Although the idea of getting an external party to take charge of your IT may sound expensive, it often ends up saving money, particularly in terms of recruitment and substantial salaries for people with IT skills.
The average salary for an IT manager in the UK is well over £50k. This clearly means that building an in-house team to deal with all your IT needs can be very expensive, not to mention time-consuming. So it is entirely possible that outsourcing could be cheaper, particularly in the longer-term.
Access to a range of skills
Using an outsourcing company can be advantageous in instances where certain systems that are being used need expertise but there is no justification for having a full- or part-time employee. Outsourcing firms will have staff who are experts in multiple systems and they can be accessed when required on an ad-hoc basis and at a lower cost.
Effective use of time
Resolving problems with IT can be both time-consuming and frustrating. Outsourcing these issues means that you can claim back that time for more important and profitable activities. Additionally, if all your IT systems are running correctly, you’ll lose less working hours to downtime and your staff will be more productive.
Up-to-date expertise
Specialist external IT companies need to keep up-to-date to remain relevant and competitive. This means if you outsource, you will have access to specialists with current knowledge who can advise you on developments and the latest technology.
Scalability
This is a particular advantage of outsourcing. If your business is expanding rapidly, you can simply ask your IT provider to add more equipment, set-up extra additional accounts and so forth.
Compliance and security
An outsourced service can also deal with these potentially time-consuming issues for you.
Outsourcing – disadvantages
Control
Outsourcing can potentially result in some loss of control over key systems. However, most outsourcing companies will help you to establish boundaries in terms of who controls what and will try to ensure that you don’t lose control where you wish to keep it.
Unique requirements
If your business uses unique or very niche software, it may be harder to find external IT companies with that expertise. In this situation, if you already have the expertise, it may be better to keep IT in-house.
Employee morale
If not handled carefully, outsourcing may have a negative effect upon existing employees. It could be that responsibilities are taken from them or they fear they may no longer be needed.
If you are opting to retain some in-house IT staff whilst also outsourcing some elements, it is key to staff morale to frame the external help as support for existing employees and not as competition or a threat.
If you are worried as to the potentially negative impacts of outsourcing, perhaps a hybrid approach is the way to go. Some organisations will keep a member of staff dedicated to troubleshooting but outsource the infrastructure and more complex issues.
This engenders rather more of a team feeling whilst providing access to external experts. This may be particularly helpful when new systems are being rolled out.
