Definition: The practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual*
Outsourcing is a hot topic in business today. But how do you know if outsourcing is right for you and your company? Here are some of the pros and cons of outsourcing IT:
- Gain expertise. Outsourcing allows you to focus on your company’s core competency and delegate the rest. Outsourcing will give you a dedicated team to implement, troubleshoot, maintain and resolve problems. As a result, the quality of work is increased, reducing problems and backlog.
- Reduce risk. Since outsourcing companies have a large network with multiple clients, they are more likely to keep up with industry best practice and evolving standards or policies. By relying on experts in the field, you can dramatically reduce your risk of implementinga costly wrong decision.
- Cost savings. Software, training, employee salaries and chargebacks from retailers add up. By outsourcing you will have a leaner overhead with less risk resulting in cost saving.
- Loss of control. Although you are outsourcing a task or operation that may not be your company’s core competency, be careful not to take it too far. Outsourcing gives a third party company access to your company information; be careful not to expose confidential data. Ensure both parties understand your business and the goal.
- Company morale. Sometimes employees are affected when certain job functions are outsourced. To reduce concern, explain the value outsourcing brings to the company and employees. Show employees that the outsourcing action will free up their time so they can focus on what matters: contributing to the company’s core competencies.
- Hidden costs. Signing a contract across international boundaries may pose a threat. Have legal review your contracts and have the conversation before they come up.