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Pros and Cons of IT Outsourcing

In the world of business today, people around the globe attempt to improve and grow their businesses by many productive means.  Today we’ll be talking about one of those productive ways known as IT Outsourcing. IT Outsourcing is a very efficient and productive way in which a business will hire external service providers to manage IT-enabled business processes, provide service, and prepare solutions for infrastructure. In this article, you will learn more about Outsourced IT programs, outsourcing contracts, the benefits of IT Outsourcing, and the risks of Outsourcing that need resolution. 

Time and Cost 

Outsourced IT programs are used to increase the productivity of businesses at a lower cost so if that cost were to exceed the set budget, it would be a total loss. In this article, we’re going to answer the most commonly asked question, “How do I increase the time without increasing the cost?”  

Here are a few tips: 

1. Use modern, intelligent, and integrated tools.  This will help improve productivity in a small time frame compared to primitive tools. 
2. There should be a remote infrastructure.  
3. Increase efficiency and not just the number of employees. 

Strategies and Productivity 

Let’s discuss strategic management and productivity from an Outsourced IT company. In simple terms, strategic management and productivity include strategic moves for the growth of a business that result in a productive outcome. The strategy is a plan that includes the analysis and assessment of the functions that are to be performed by the IT Company. The main goal of the strategy should be having modern and necessary tools and a team of qualified people who know what they are working towards. By improving service productivity you can help your business grow. Here are a few ways of doing that: 

1.  Staff improvement; Set a “reward system” for your top employees. 
2.  New services improvement.
3. Educate equipment suppliers with “design reliability”. 
4. Customer Interaction 
5. Implement a formal planning and scheduling process that supports improvement. 

Process Improvement 

Some process improvement strategies include: 

1.  Faster response time 
2. Improvement of resource productivity  
3. Cost reduction 

Improvement 

If a company invests in production improvement it will boost labor productivity by 50%. There are many examples of company improvements that can help with work efficiency. Some are listed below: 

1. Provide regular feedback 
2. Practice flexibility 
3. Cultivate strong co-worker relationships 
4. Provide clarification of purpose and strategy 

A business improvement plan is very helpful to have successful growth. Your business improvement plan should include: 

1. Knowing your business’s needs 
2. Implementing a new way and retiring the old way 
3. Having a way of analyzing results 
4. Understanding the process involved 

Back Office  

Back office outsourcing is a process in which the companies’ back-office tasks are operated by third-party providers. The most common small business back office outsourcing tasks are data entry, and accounting, etc. Small business back-office outsourcing can be very efficient and time-saving and most importantly money saving.  

Cost 

It’s important to know the when, how, where, what, and whom before outsourcing but the most important question is “how much”. It’s very important to know the costs of outsourcing support to have a successful outsourcing contract. Outsourcing contracts are legal documents of the agreement made between the service provider and the business company.  

Management 

Outsourced vendor management is a process that ensures that vendor management is done by third party experts to avoid making ill-informed decisions through flawed information.  

Benefits

The benefits of IT outsourcing are numerous and help businesses in many ways. Some of the benefits of IT outsourcing are: 

1. Saving infrastructure and money 
2. Faster and better services 
3. Cost savings 
4. Time zone advantage 

Pros and Cons 

Considering the pros and cons is of the utmost importance before creating a successful contract.  

Pros:

1. Reduced-labor projects 
2. Time zone factors 
3. Flexibility to manage projects 

Cons:

1. Interruption with project communication 
2. Slow response times  
3. Language barriers 

Problems

Implementation problems with IT outsourcing can be harmful to the business. The primary problem with IT outsourcing is the lack of understanding of post-contract processes and decision rights. 

Risks 

Other risks of outsourcing are: 

1. Inexperienced staff
2. The loss of innovative capacity
3. Epidemic Uncertainty
4. Business Uncertainty

These risks can safely be eliminated by selecting the right IT company to outsource to.  Here at Demakis Technologies, we take pride in our staff which have been handpicked to ensure nothing less than professional expertise, creativity, and impeccable communication skills and response times. 

Conclusion

Today we learned about outsourcing that occurs between companies. We defined the terms Outsourcing contract and outsourced IT.  We also discussed the pros and cons of outsourcing and the benefits of IT outsourcing.   The strategies, cost management, and productivity of companies were also covered.  If you’d like to learn more about outsourcing your IT, contact us here at Demakis Technologies!