Risks, Benefits, and Challenges of Outsourcing IT Services


Risks, Benefits, and Challenges of Outsourcing IT Services
Risks, Benefits, and Challenges of Outsourcing IT Services

Date: 05.03.2018

Outsourcing IT services is becoming easier and more rewarding because third-party vendors can now offer services that are scalable to a company’s needs without huge infrastructure investments. Data centers, for example, can offer cloud computing, convergence and hyper convergence technologies, database analytics, disaster recovery plans, and other valuable services. These services give small- and medium-sized companies the ability to compete with larger companies. Third-party services also give large companies the resources, security, and strategic planning they need. There are risks and concerns about any third-party provider. A beginning risk is making sure you are working with the right company – one that has been properly vetted; one that can offer the IT services your company needs. Other concerns include a lack of direct control of the IT, the location of the data center or other service provider, and the range of services that the outside vendor can really offer. The benefits of outsourcing The primary advantages of using outside services are these:
  •       Scalability. In-house companies generally plan for their current IT needs and factor in a small growth factor. When companies grow, there are a lot of problems that must be addressed. New servers, software, and storage devices will be needed – among other IT concerns. New networks may be required. New systems need to be compatible with the current systems. New data needs to mesh with the old data.
Quality data centers already have the necessary resources in place to handle expansion. Growth through a data center essentially means allocating more space so that the current technology can handle the new, growing business needs of the company.
  •       Better disaster recovery. Data centers are much better equipped to get company IT up and running in real-time because they have workable plans in place. Data centers routinely work on disaster recovery because they do it for many other clients. Planning includes figuring out what applications and data are critical. It also includes having the right hardware architecture in place and ready backups of essential items. Outside vendors should also have software that can correctly reload the old applications, data, network connections, etc.
  •       IT expertise. Outsourced vendors have the technical expertise and sophisticated IT services to explain a company’s IT options, review what the best fit is of those options, and discuss how the data center can meet those goals. They have the IT team in place to handle hardware, software, network, Internet, storage, and any IT concern the company has. Having the expertise and resources means better service and better performance at affordable prices.
  •       More time for business development. Outsourcing IT means a company needs to spend less time hiring internal IT staff, less installation time, and less maintenance time. This savings in time and money enables the business to focus on its core products and services, its marketing, and the other parts of business operations.
  •       Lower costs. Outsourcing is normally done on a fixed, monthly fee basis. This saves on the capital outlays for IT resources and paying and hiring internal IT staff.
The risks of outsourcing Some of the key concerns with outsourcing IT that each company should review are:
  1. Less control. When a company outsources its information technology, it is placing its trust in a third-party – relying on their expertise, their resources, and their services. Ideally, the transition works out. But if the company is not satisfied with the third-party vendor, it needs to do more than just start from scratch. It needs to coordinate what the outside vendor has already done with new IT plans – such as building the IT in-house or using another vendor.
  2. Security. Cloud computing services share their resources with other tenants. This sharing helps to save on costs and makes the IT scalable, but it does mean that other companies will be using some of the same servers and same devices. This creates security concerns that need to be addressed, especially if the company has strict compliance requirements.
  3. Compatibility. Compatibility of IT services can be an issue, especially if a company is keeping some of its IT in-house and outsourcing just part of the overall IT.
  4. Lack of coordination between business goals and IT goals. Outsourcing vendors don’t have the day-to-day understanding of your company’s business. They understand IT and general business sector issues, but they don’t directly work with your employees or customers. This lack of coordination should be discussed.
Some of the other risks include damage to the data center, international issues for companies that have offices abroad, and other concerns. https://www.vaultnetworks.com/risks-benefits-challenges-outsourcing-services/

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