Typically ICT Outsourcing scenarios allow business executives to retain control over IT strategies while benefiting from reduced operating costs and risks without compromising service delivery to end users and their clients. The outsourcing supplier will assume responsibility for operations delivery, drawing on IT governance best practices and focusing on quality and operational excellence, while offering competitive pricing based on synergies within their core business.
Some IT outsourcing services commitments;
Pricing based on established targets and predictable IT costs
Furnish long-term partnerships
Providing a Global delivery model that emphasizes client proximity to provide a local presence for key IT activities
Large range of services covering some or all of the IT service scope
Stringent knowledge transfer and management to increase client productivity
Focus on governance and proactive management
Operational excellence and compliance with commitments demonstrated by proven successes
Faced with considerable economic and competitive pressures, more and more business executives are turning to full IT outsourcing.
So, what are the risks?
Anytime you give someone else responsibility for an aspect of your business, whether a full-time new hire or an outside vendor, there is risk involved. Did I hire the right person/company to do the job? Will they do what they are supposed to do? How will they “fit” with existing employees or departments? These are the questions that nag owners of small businesses when handing over the reigns to a new employee or vendor.
Some IT functions are not easily outsourced. IT affects an entire organization; from the simple tasks employees do everyday to the complex automated aspects. Be sure the outside vendor are qualified to take care of your greatest needs.
Control may be lost. Critics argue that an outside vendor will never be as effective as a full-time employee who is under the same management as other employees. Other concerns include confidentiality of data and disaster recovery. However, a supervisor that is knowledgeable in managing an IT staff member will usually be required.
Innovation might not be understood by the supplier and the client in the same way. Many times the supplier’s willingness to innovate is depending on his options of increasing the margin and not making the client’s business better or cheaper. This has the risk of causing major differences once the managed outsourced service is in-life.
Employee morale may be affected. This is particularly true if you will be laying off employees to replace their job functions with an outsourced firm. Other employees may wonder if their job is at risk, too.
You may get “locked in.” If the vendor does not document their work on your network and system, or if you’ve had to purchase their proprietary software, you may feel like you can’t go anywhere else or take back your network. Many outsourced companies require you to sign a year to year contract which limits flexibility.