Seventhman Blog

Drawbacks of IT Outsourcing Revealed

"IT outsourcing"With the sluggish economy and ceaseless debates around the subject, one can only wonder what outsourcing in this age of uncertainty really means.  Every company these days are trying to make ends meet on nearly every level, where they strive to bring value to their business.  While outsourcing may have been blamed countless times to the cause of unemployment, let us not forget that outsourcing is merely a business strategy helping an organization, large or small, survive and thrive .  To maximize productivity and minimize cost is not an easy fete, but it doesn’t mean a perfect solution either.

Realities of IT Outsourcing You Need to Consider

Despite the fact that IT Outsourcing is growing each year, even in places like China where English skills need to scale higher, many are still outsourcing some or most operations run by their IT Departments.  Whether be it a permanent or temporary fix to bridge the gap among cost, quality and manpower – outsourcing may seem like a salvation to many, that is if you are not too overeager to miss the real cost of outsourcing IT.  For example, if you are to move your IT functions offshore, you need to consider travel cost to the country of your choice, not to mention, other costs that may involve directly ( or indirectly ) with running your operations there.

Calculating Beyond the Real Cost

While you may think it will cost you less in the long run to get a third party service provider, you may have to consider the time factor when it comes to their familiarity with how your system and network really works.  If not, that can mean additional costs in training.  Then, there will be cases when you need something done a.s.a.p. and your outsourced IT provider must be inept to deal with issues right away, or you can suffer delay time which is not really good for any business.  Whether you’re outsourcing locally or offshore, you have to consider the worst case scenario to prepare yourself for the unexpected, just in case.  The problem is that plenty of contracts are sugar-coated and misleading, and no matter how urgent your needs may be, it helps to see a bigger picture that includes the real cost + long term benefits of having an outsourcing partnership.

Outsourcing the Human Liability

What drives companies to outsource these days is having access to first-rate IT expertise and resources that will yield more results and cost less.  Still, one must consider that anything, or anyone, can become a liability.  It does make sense to have your fine print well-defined, as well as backups, in case data is lost or stolen.  Yet, the question here is how much will it cost you when downtime happens because of these?  Will it cost you more if your team hasn’t worked for an entire day ( or week ) because the system crashed?  Is your team motivated enough to continue with your cause, efficiently?  Have you even considered the impact of cultural barriers that may lead to communication gaps?

You may argue that any business is a gamble and it comes with risks.  Keeping a close eye is just a start and no matter how providers may offer free consultations, it’s only a sales pitch.  It will always come down to long term benefits and what outsourcing will really cost your IT dollars.  Choose wisely!

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  • http://www.tdcnet.ca/services/managed-services/ Managed Services Toronto

    This is true that IT Outsourcing is develop in every year. It is one of the best cost effective third party service provider who consider the how our system or network really works. 

  • http://joshualamb.blog.com/ Edward Armstrong

    Aw, this was a really nice post. In idea I would like to put in
    writing like this additionally – taking time and actual effort to
    make a very good article… but what can I say… I procrastinate a
    lot and by no means seem to get something done.

    • seventhman

       Thanks Edward.  I hope you get the passion and inspiration to blog one day and let me know if you did!

  • http://www.tatvasoft.com/offshore-software-development.asp Henry Watts

    Outsourcing reveals a certain aspect of your company to a third party.Unless you absolutely protect your international function, you might present your organization to a violation of secrecy, harmful use of program accessibility, and other weaknesses in your organization.

    • seventhman

       Thanks Henry – yes, security is still an issue, especially with offshore outsourcing.  Trust goes two ways here.

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  • http://www.imensosoftware.com/ Imenso Software

    At presently many big companies are doing outsourcing on different different technology of software development. Imenso is also a part of Offshore and outsourcing software development company of India. You can get the solution from us :)