What is IT outsourcing?

Technology plays a vital role in today’s business operations, but not every company has the resources to manage an in-house IT department. That’s why many companies are choosing to outsource their IT needs to third-party providers.

IT outsourcing is the practice of contracting a third-party company, usually a managed IT services provider (MSP), to manage all or part of the organization’s IT infrastructure and operations. This service is typically delivered remotely, although some MSPs may provide on-site support as well. 

 

This blog post will explore the different IT outsourcing arrangements, as well as the benefits and risks associated with letting a third party manage your tech.

Types of IT outsourcing arrangements

There are multiple types of IT outsourcing based on what services are being outsourced, such as:

 

  • Project-based outsourcing: In this type of outsourcing, businesses contract with an IT vendor to complete a specific project. For example, a company may outsource their cloud migration project to an MSP.
  • Technical support: This type is also called help desk outsourcing wherein businesses can contract with an IT vendor to provide 24/7 technical support to their employees. 
  • Infrastructure management: This type of outsourcing involves contracting with a vendor to manage and maintain a company’s IT infrastructure. This can include services like server administration, hardware maintenance, software patching and testing, and network monitoring.
  • Cybersecurity: Businesses can outsource cybersecurity functions like vulnerability management, security software implementation, training, incident response, and data backups.
  • Consulting: By contracting with an IT consulting firm, businesses can get expert advice on specific projects or problems. For example, a company may hire a consultant to help them with a digital transformation initiative.

What are the benefits of IT outsourcing?

Outsourcing IT functions can provide a number of benefits to businesses, including:

1. Reduced IT and labor expenses

The biggest benefit of outsourcing IT is the cost savings. When you outsource IT, you don’t have to worry about the overhead costs associated with maintaining an in-house IT department, such as salaries, benefits, and training. In fact, most MSPs charge their services on a flat monthly subscription fee based on the number of devices, users, and other contractual agreements included in the plan. This can be especially beneficial for small businesses that don’t have the budget for a full-time IT department. Instead, they can pay for IT support and other management services on an as-needed basis.

2. Access to a team of skilled professionals

The problem with staffing an internal IT department is that it can be difficult to find and retain employees with the right skill set. By outsourcing your IT, you gain access to certified technicians who are vetted by the MSP. Dynamic Solutions Group, in particular, employs engineers with experience in a wide range of IT disciplines like networking, cybersecurity, and cloud computing. In addition, many MSPs offer training and development programs to their employees to ensure they’re always up to date on the latest technologies and business trends.

3. More focus on your core competencies

Outsourcing IT minimizes disruptions because your in-house staff no longer has to deal with the day-to-day management and maintenance of IT infrastructure. That includes tasks like installing software updates, troubleshooting connection issues, and managing user accounts. Instead, your employees can focus on their core job responsibilities and strategic initiatives, which leads to increased productivity and profitability. 

4. Improved risk management and security posture

Managing IT systems carries certain risks like data breaches and downtime. By outsourcing IT, the MSP assumes a lot of these risks and ensures your business has the proper security measures in place to mitigate them.

 

Many MSPs offer risk and vulnerability assessments to identify issues in your company’s security framework. Based on their findings, they’ll recommend appropriate cybersecurity solutions like network monitoring, anti-malware software, email security, and data loss prevention. If you’re in an industry subject to strict compliance regulations, like healthcare or finance, an MSP can also help you develop and implement the necessary policies to meet these requirements.

5. Maintain a competitive edge

Another advantage of outsourcing your IT is it allows you to level the playing field. Working with a top MSP gives you access to the same technology, tools, and processes that much larger enterprises use to stay ahead of the competition. Great MSPs will even keep you informed of new trends and emerging technologies that could improve your bottom line and set you apart from your rivals.

6. Optimized workflows

IT outsourcing can help businesses improve efficiency by implementing processes and technologies that optimize workflows. For example, if your employees are constantly dealing with slow internet speeds, it’s likely affecting their productivity. Or maybe your current software solution can’t integrate with other applications, forcing your staff to waste time entering the same data multiple times. An MSP can help you identify and implement solutions to help everyone work more effectively — whether that’s upgrading to faster internet plans or migrating to new cloud software.

What are the challenges of IT outsourcing?

While IT outsourcing comes with many advantages, there are also some potential challenges you need to consider. These include:

1. Loss of control

When you outsource your IT, you’re essentially giving up some administrative control over your systems, which can be difficult if you’re used to having full control. Your MSP may have data security protocols in place that are different from what you’re used to or have different standards for system uptime and response times. It’s therefore important to choose an MSP that’s fully transparent in their operations and able to provide the level of control you need to feel comfortable.

2. Cybersecurity risks

Your MSP will have access to your sensitive data, so you need a provider that has strong data security protocols in place. Make sure your MSP has experience in handling the type of data you’re working with and that they’re using the latest cybersecurity technology. You should also have a written agreement in place that outlines each party’s responsibilities for data security.

3. Vendor lock-in

Another potential challenge of IT outsourcing is vendor lock-in. This occurs when a business becomes too dependent on a particular vendor and finds it difficult to switch to another provider. The MSP may own the licenses to certain software applications or has developed customizations that are specific to their platform.

 

To avoid vendor lock-in, your outsourcing contracts should have exit clauses that allow you to terminate the agreement if you’re not happy with the level of service you’re receiving. Your MSP should also be willing to transfer any customizations or application licenses to a new provider, if necessary.

4. Communication difficulties

Miscommunication can be a problem when businesses outsource IT, especially if there is a language barrier. That’s why you need to partner with a local MSP that has impeccable communication skills and understands your specific needs.

 

The MSP must provide progress updates, act on your feedback, and clearly understand your business goals.

 

Choosing the right IT outsourcing partner is a big decision, so do your research, ask lots of questions, and get everything in writing to avoid any surprises down the road. Dynamic Solutions Group can help you enjoy all the advantages of IT outsourcing while minimizing any potential risks. Contact us today to learn more about our services.