Why Your Business Should Consider Outsourcing IT

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Why Your Business Should Consider Outsourcing IT

The computer has a virus, you can’t access your share drive, and the plugin for your email system is not functioning properly!  How often has one, all, or other IT problems happened in your business?  In this article we will look at reasons why your company should consider outsourcing your IT needs.

We will explore the challenges companies currently face concerning technology, what the differences are between having an in-house IT person or small IT department, compared to outsourcing this responsibility–and then outline a helpful way to find the right IT outsourcing solution for your business.

Technology Challenges

IT technology is obviously changing at an unprecedented rate.  Moore’s Law states that the number of transistors on an integrated circuit doubles about every year.  In other words, the storage capabilities and processing power of computers are doubling, while their size is shrinking at an exponential rate.  You seen this happen with the cell phone–starting as the size of a brick with very limited functionality, being upgraded to smart phones that gradually acquired more and more features, to now having smart watches the comfortably sit on your wrist. Even the size of the PC has shrunk from a huge clunky desktop, to the newer small hard drives that hide behind your monitor.   Tablets have the processing power of many laptops, and are easily transported in a purse and held in the palm of your hand.   Technology is truly evolving in dramatic fashion.  None of us should be surprised when we are handed in the future a chip with holographic projection ability and the capacity to execute all our computing needs.

In addition, the software industry has taken flight in ways many of us could never have imagined, with open source systems that allow our collective talent to weigh in on improving applications like those from Microsoft and Adobe, that have the ability to integrate with other applications and plugins–adding even more functionality that provide “mind blowing” solutions.  Who can stay on top of it all?

Beyond the increasing demand to leverage technology in the workplace, there’s the cost involved in maintaining state of the art hardware and software.   Studies show that companies spend an average of 3% to 7% of their revenues on IT.  A company trying to maximize profit and investments will need to find ways to improve IT functionality.

In-House Versus Outsourced IT

There are obviously both pros and cons to outsourcing IT versus having an internal IT resource.  Some companies apply a highbred method of contracting with an IT firm, while also having an individual or team within the organization dedicated to it’s basic IT needs.  But here are some in-house and outsourced IT distinctions:

  1. Outsourcing a firm will give you access to someone with resources that are considerably broader and deeper than those of an internal employee or department.

  2. An outsourced company will be more likely to stay abreast of industry trends and tools that could leverage technology within your company, in a way that an internal employee our department may not be motivated are incentivized to pursue.  It is only human nature for internal resources to remain more comfortable with the status quo, rather than take on new technology with which those resources may not be familiar.

  3. Outsourcing can help you control expenses by giving you access to specific IT resources that are unaffordable as a fixed company cost.  Such capabilities will be available only when and where you need them.

  4. As a small business owner or manager you shouldn’t be asked to wear too many hats–especially for roles in those areas with which you have too little experience or knowledge.  The best solution is to often develop a trusting relationship with an objective outside vendor.

  5. Outsourcing often gives company management the flexibility to scale up or scale down, without the bureaucratic challenges of scoping roles, writing job descriptions, hiring, and onboarding.

Outsourcing Your Needs

Once your business has decided to move forward and to consider outsourcing your IT needs, it is important to take certain steps to ensure the success of your contracting relationship.   Here are recommended steps to consider during this process:

  1. First, make certain that you have a comfort level with your overall company goals and strategies.  Then set aside dedicated time with company leaders and staff to determine exactly what it is you believe you will need from an IT contractor.  Put a high priority on clearly and concisely documenting and communicating your needs and expectations.

  2. Identify specific performance metrics to help you achieve your goals.  How will you know if your contracted firm is meeting your needs?  How will you know if they are either exceeding our failing expectations? Focusing on such metrics will create not only a better relationship between you and your contractor, but also improve internal company relationships.

  3. Research different providers.  Once you have your needs and metrics identified, you can reach out to business partners, or even competitors, to see who they are using.

  4. Narrow your options to three firms and conduct interviews.  You will want to talk to more than just a vendor salesperson, with very limited IT expertise, whose income is dependent on making the sale, without much regard for any long term alignment between both parties. Have a list of questions prepared to help navigate a conversation and keep in focus how the vendor is going to meet your goals.  Helpful questions will likely include pricing options, support availability, scalability, and communication methods.  Ask for case studies.  Develop a clear understanding of how the vendor has worked with multiple clients.  Find a company that is not just managing for short-term cash flow, but is committed to building long term equity.

  5. Finally, it will be important to manage the relationship and keep communication channels open.  An ongoing discussion of identified metrics, in the form of email, phone, and face-to-face meetings will be critical, of course, but more significant will be a determination of how important you genuinely are to the vendor.  You want a partner who is equally matched in size and values.

Outsourcing your company’s IT needs can save money and leverage technology, giving you a comparative edge in a typically brutal marketplace. Tell us about your company’s current view on outsourcing, both good and bad experiences.

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