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Consider These Benefits & Risks of IT Outsourcing [Pros vs Cons]

The Advantages & Disadvantages of Outsourcing IT Services

Whether it’s for controlling your IT spending or keeping your team productive, outsourcing your IT is an option. In our last article, we took a look at why businesses outsource IT. In this post, we’ll take a deeper dive into the risks and benefits of IT outsourcing.

IT Outsourcing: Pros and Cons

Disadvantages of Outsourcing IT

Limited Accessibility/Responsiveness

Some outsourcing companies have trouble with immediately responding to their clients’ needs, especially on short notice. They might even be difficult to reach for help. 

However, this is not an issue for every outsourcing partner. The key is to ensure they meet your response needs through a service level agreement (SLA). They should also offer a proven history of work with previous/current clients and how they’ve built their support staff. 

Some IT Managed Services Providers (MSP) will proactively try to maintain strong lines of communication with you through regular meetings/touchpoints. They will also offer clear paths of escalation for responding to and resolving IT problems. 

Excessive Costs

Outsourcing IT should generate cost savings, but some MSPs structure their services in a way that can result in high and unpredictable costs. 

For example, we have a client whose old MSP was charging them on a per-minute basis. As a result, they were seeing cost swings in the tens of thousands of dollars each month. 

Those pricing models aren’t sustainable. You can solve this issue by working with an MSP that works on a flat-fee basis.

Not Focused on Your Industry/Vertical

It’s common to find outsourcing companies that aren’t well equipped to operate in regulated industries, such as finance and healthcare, among others.

They may lack sufficient internal cyber security measures, or not fully comply with regulatory frameworks. Working with such firms is risky because a data breach or cyber- attack on their end could affect you. Likewise, you get fined as a result of their gaps. 

Such outsourcing companies may not correctly understand your industry or how your business processes are supposed to work. This could result in misalignment about how fast they should respond to IT downtime and other issues.  

 

Loss of Control 

The loss of control in IT is a major obstacle for many businesses. Working with a misaligned MSP could mean taking on extra cyber security and compliance risks. You also lose control in terms of the IT tools and systems you want to use (as you’ll rely on those used by the MSP). 

Advantages of Outsourcing IT Services

Though the risks of outsourcing your IT are real, you can control and mitigate every risk or drawback with MSPs with ease. The key is finding the right MSP. 

 

Some MSPs Specialize in Certain Industries/Verticals

Be it finance, healthcare, logistics, manufacturing, or others, you’ll find MSPs equipped for a range of industries and verticals. They’ll have IT experts on-hand who understand how best to leverage technology to achieve your business objectives.

These MSPs will also take your compliance requirements very seriously. So, for example, in terms of cyber security requirements, they’ll enforce industry best practices through training, 24/7/365 asset monitoring, password management, and other steps. 

 

Lower Cost in the Long-Term

Not every MSP charges on a per minute or hourly basis. Some, such as Fusion, will charge a flat-rate fee that’s all-inclusive (i.e., no matter how many IT issues you have in a month). This way, you can avoid cost variances and spending beyond your budget.

Second, you can save money by converting expensive capital expenditure (CAPEX) into fluid operational expenses (OPEX).

Solve All of Your IT Problems
Without Breaking Your Budget

Instead of buying and maintaining servers, you only pay a provider for the cloud services you need. If those needs decrease, you can cut your OPEX. Moreover, you’re free from worrying about securing or upgrading on-site infrastructure.

If you select the right MSP, you can get the output of an entire IT team covering your whole stack for the cost of just one employee.

 

Gain a Competitive Advantage

By leveraging economies-of-scale (via supporting many different clients), some MSPs can continually invest in new technologies, more talent, and new skills. You can leverage these advances without having to spend extra on hiring or other overhead costs. 

So, if you have a new business need (e.g., a new application to drive your manufacturing line), you should call your MSP right away. Your MSP will develop a strategy that will make sense for your company (e.g., keep the project within budget), and create a solution that meets your core business goals. 

In many cases, it’s also difficult for smaller businesses to find and retain certain IT professionals, especially in cyber security. By working with an MSP with a CISSP or other security expert on its staff, you can take advantage of that expertise without adding to your payroll. 

 

Free Up Internal Resources 

You can free up your internal IT team to spend more time on strategic IT projects or on work that creates revenue by outsourcing certain IT tasks. For example, you can outsource monitoring, bug-fixes, patches, and other issues, while your in-house team focuses on development. 

Once again, a key point here is that you don’t need to add to your payroll. If you need help handling tickets, you can sign on for help desk services on a per-seat basis instead of hiring
a new employee with much less capacity.

 

Regain Control of Your IT

By outsourcing to the right partner, you can actually get more control of your IT. 

For example, in many businesses, some departments will make IT purchases without speaking to their internal IT team. Often, the decision-maker doesn’t understand the cost factors or risks of that purchase and the company ends up spending more time and money addressing that issue (which is a case of shadow IT). 

Some MSPs will offer high-quality advice to business owners and executives about their current and future technology needs. They’ll also help companies get more visibility of their technology, and in turn, reduce the complexity of that technology. 

 

See How Outsourcing Your IT Will Lead to Cost Savings:

 

How to Leverage the Benefits of Outsourcing IT Services

The common thread in this article is that you need to select the right MSP to leverage the benefits of outsourcing IT. As we’ve discussed in another blog, working with the right MSP
will result in cost-savings, productivity gains, and other benefits. 

Work with Fusion Computing to minimize IT downtime and boost staff productivity. Contact us today to get a FREE consultation to see how.