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6 Things Every Business Owner Should Know About IT Outsourcing

Brad Wilkus
Sr. Consultant and Project Manager

The Pros and Cons of IT Outsourcing

As a modern business owner, you rely on a properly functioning IT network to meet your daily goals. You need your computers to just work, so you can focus on what your business does best. You have some options when deciding how to tackle this problem. One of the more popular solutions is outsourcing the management of your network. So what are the advantages and disadvantages of IT outsourcing, anyway?

Let's look at some common benefits gained from outsourcing your IT:

+ Gain the value of a team for the price of an individual

+ Increase your return on investment and revenue

+ Increase knowledge base and skill set availability

+ Increase speed and response time

+ Better ability to scale with your business without adding complexity

+ Frees up management to concentrate on central activities

And here are some possible drawbacks to consider when hiring an IT company:

- Less direct control over your network processes

- Potential communication issues between central staff and ITO personnel

- Possible misalignment between expectations and results

- Inconsistent levels of quality results over time

- Issues created by language barriers and varieties in regional accents

- Potential problems due to time-zone differences when offshoring your IT

How to Choose an IT Outsourcing Company

Let's look at some considerations when outsourcing your IT. Your first take should be to determine your ITO needs and what you need to accomplish with the relationship. Given the needs of your business and the daily operations required to practice your core competency, define a list of tasks and responsibilities that need to be handled and that you wish to offload onto the IT company. Consider the roles that need to be filled within your company to effectively solve day-to-day network management and maintenance of your IT infrastructure.

It's a good idea to match the Scale of Your Business to ITO Company. Plainly said, smaller businesses should typically opt for smaller IT companies, while larger companies will likely need to seek a company of similar scale. Small business owners will typically benefit from increased access to senior staff, a tighter business relationship, better response time, and more accountability when going with a smaller ITO group. Large companies will usually require access to a larger team and a broader skillset offered by big ITO companies.

Once you've solidified your requirements for IT support, it's time to start scouting out companies. There are a ton of options out there, so choose carefully. Remember, you might save some offshoring your IT needs, but there are several drawbacks to this approach. Many companies are now choosing candidates within their own region to maximize synergy in the relationship. Try to guage the size of the prospective ITO companies and establish communication to get a feel for response time, professionalism, and communication clarity.

Once you've narrowed down your options, it's time to start vetting them to ensure they are who they say they are. Ideally, you'll be looking to establish a profitable, long-lasting relationship as smoothly as possible. Verify the candidate's experience and certifications by asking for documentation. Get samples of their work and ask for references from previous or existing clients. If necessary, discuss with the company how any relevent IP ownership will be handled.

Once you've thoroughly confirmed the viability of the companies up for consideration, it's time to make a choice. Each company will have their own process for on-boarding and you'll undoubtedly have some questions you'll want answered before you sign up. Take your time, be clear and up front with your expectations, and you should have a smooth transition into the business relationship.

How Much Does IT Outsourcing Cost

You might be wondering how much will IT outsourcing cost. Will it save your business money? First off, there are a large variety of pricing schemes that managed IT companies utilize, but the most common is a "per user" or "per device" model, where you pay a flat rate depending on how many users are being supported or how many devices are being managed on your network. Typical pricing ranges from $120-200 per user/device per month, but that varies from region to region and company to company.

Companies with a larger user-base or many devices may find that bigger IT management outfits can provide more economical pricing, while smaller companies will probably get more bang for their buck by opting for a local ITO. If you've found more than one candidate company, compare their pricing and their offered services to see if the the prices balances out with the offerings.

If in doubt, ask some fellow business owners who they use and what pricing the company utilizes; you'd be surprised to hear wide range of options and cost to service ratios. The bottom line is, given all of the information above, shop around and see what's out there, but beware of bargains; they might be cheap for a reason. With most things in life, you get what you pay for.

How Information Technology Outsourcing (ITO) Works

By definition, Information Technology Outsourcing is the practice of hiring an external company or individual to handle some or all of the IT functionality of your business environment. Perhaps they handle only the network infrastructure, managing and monitoring your routers, switches, firewalls, and other important backbone devices. Or maybe they handle the servers and software side of things too, helping to maintain your day-to-day functions like web apps, databases, active directory services, and more. Further, your ITO service can potentially be an on-site resource, performing preventative maintenance, supporting users directly, installing and repairing equipment, and so on.

The specific services and functions your ITO performs is largely up to you and how you'd like to organize the division of labor. By outsourcing these activities, you can focus your attention on other things.

Why Companies Are Outsourcing IT

But how will IT outsourcing's importance grow? As communication and information technology sectors continue to grow by leaps and bounds, so too will the necessity leverage experienced professionals to manage and operate this technology. This means, for your business to stay on the cutting edge, you need people with cutting edge skills to get the job done so you can focus on your own mission critical responsibilities.

More and more companies are turning to outsourced IT because it tends to be economical and reliable, virtually eliminating the technology bottlenecks that prevent a business from expanding and creating new opportunities.

Why Outsourcing Sometimes Fails, and How to Avoid That Fate

Some people ask, why is IT outsourcing bad? How do you gauge the risk in outsourcing your project management and infrastructure monitoring?

Fist of all, beware hidden costs. Always review the contracts and legal documents, with a lawyer, prior to signing up for anything. It's a good idea to discuss the ownership of intellectual property at the same time; consider that many elements of your business will be visible to your ITO resource. As always, it's important to evaluate the company's security procedures and credentials, especially if your business deals in sensitive information like patient data or financial documents.

Got a project in mind?

We can't wait to hear from you! What are you waiting for?

Request a quote
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We offer training in several convenient cities around the United States for OP5 Monitor and WhatsUp Gold network monitoring software.

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