What CIO’s Should Consider with an IT Outsourcing Model
If you’re looking to outsource IT tasks to a third-party provider, let this article be your guide. We’ll look at the pros and cons of choosing an outsourcing model, so that you can make the best decision for your company’s needs.
The Common Types of Organizational Outsourcing
Think about what areas of the IT organization you’d like to outsource. When it comes to outsourcing IT tasks, this can be broken down further still. The most common outsourced function is application development, (in the above report, it was chosen as a task that they outsource by 56% of respondents) while others choose to focus outsourcing on IT security such as disaster recovery services and backups. For many, everyday tasks such as helpdesk services, desktop support, and data center or web operations will be the tasks of choice. Other popular responsibilities to hand over to third parties are network operations, including remote monitoring and management, system implementation and integration tasks.
As a CIO, you need to consider how and outsourced team will interact with the in-house team, hat communication issues may arise and how outsourcing fits into your overall strategic objective.
Why Choose to Outsource IT?
The outsourcing trend has been in effect for decades due to lower costs of resources and better skillsets being obtained in developing markets. With enhanced communication tools, security integrations and international talent readily available, putting an outsourced team in place can be an asset to any IT organization is done properly. Here are some of the main benefits to consider:
The Ability to Focus on Core Competency
No matter if you’re a start-up experiencing scale or an established enterprise business, there will be skills gaps across the organization. Outsourcing can be an incredibly effective model for filling those gaps. Whether it’s for building a new partner integration in a coding language your team isn’t familiar or day-to-day IT management tasks that take time away from developers building product enhancements, outsourcing IT management can give you back that time while enhancing your capabilities.
Outsourcing your IT to subject matter experts means that you’re getting the support of people who really know what they’re doing. They spend all day every day putting out IT fires or preparing infrastructure and architecture in the best possible way. Want to move to the cloud? That’s their bread and butter. Worried about cyberattacks? They have best practices in mind from day one. Concerned about business continuity? An MSP can organize your systems and processes for best-in-class availability.
A specialist IT team will also have more industry insight on issues such as compliance, security, new technology, and market changes. There’s no doubt that this will pay dividends and offer more than you could achieve in-house. Best of all, this allows your current team to offload those tasks to outsourced resources and focus on core business needs.
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Less Upfront and Ongoing Costs
On a similar note, outsourcing is a lot less expensive than setting up a whole team of experts to work in-house. Many businesses will choose to hire a new team, which means they need to pay any recruitment fees to IT staffing agencies, train the new members of staff, onboard them, kit them out with any equipment that they need such as computers or phones (not to mention office space), and provide ongoing benefits such as vacation and sick days. This is all in the knowledge that they may leave and join another company at any time. All of this, for something that doesn’t even add to the core value proposition of the business.
In contrast, if you choose to outsource your IT services, you’re paying a transparent monthly cost (or a pay for what you need model) to cover the responsibility of these IT tasks from end to end.
What Pitfalls Should I Look Out For?
Like with any big business decision, there are always going to be pros and cons. With outsourcing, it’s often about the quality talent available, security protocols and integration with the current team members. The more closely they work with your business and your customer information, the more important it is to do your due diligence. For IT functions, this is going to be the person that you call if the worst occurs and you’re dealing with a service outage or a cyberattack. You want to know that they are reliable and trustworthy. Here are some potential pitfalls to consider when outsourcing:
Your managed partner will be part of your network, especially if you’re using shared cloud systems. That means that if they experience a breach, your data could be in jeopardy, too. Ask your potential vendors how they secure their own network, including the way they encrypt data both in transit and at rest. Check that they are GDPR or CCPA compliant where necessary. If they will be responsible for back-ups and data storage, how is this secured?
Of course, no one can guarantee that an attack won’t occur, (and if they do, this could be a red flag) but your outsourced team should have incident response in place for even the worst-case scenario.
Make sure that you have a key contact within the outsourced team that can answer any questions, and that there is a process in place (whether that’s quarterly business reviews, monthly catch-up calls or something else) for discussing your evolving needs as they change.
Leverage collaboration solutions like Microsoft Teams to security exchange information, allow access to necessary systems and communicate between in-house and outsourced resources.
It’s also a best practice to set up designated time windows every day where in-house and outsources teams are available for meetings or other forms of communication. This is necessary since the outsourced team will most likely be many hours ahead or behind your in-house team’s time zone.
Outsourcing can cause some resentment with internal teams. Having a transparent conversation before implementing an outsourcing strategy is key to have buy-in from your in-house team. Explain how a particular project being outsourced fits with the overall strategic goals of the organization. The more the in-house team understand about the reasons for outsourcing and how it makes their job better over time, the better they can come to terms with the decision.
Once the outsourced team is onboarded, set up a meet and great style video call between teams who will be working closely together. Building a relationship between the in-house and outsourced teams is critical to the program’s long-term success.
When outsourcing is not a good fit, it can take its toll on your employee morale, and become just another headache that you have to deal with. On the flip side, when it’s a good fit, you’ll find yourself with a real partner, someone that can take tasks off your hands, get things done in the background, and even become a strategic business consultant to help you to grow.