Outsourcing has been a tried and tested business strategy for decades. Since the 1950s, businesses have been engaging external suppliers to perform responsibilities on their behalf.
From the early 1980s, ‘traditional outsourcing’ was introduced where an operation previously done internally was moved to an external supplier. The goal of this strategy would be to reduce costs and maximize profit. Though the main goal of any outsourcing venture would be to reduce cost, there are so many other benefits to outsourcing key business operations. IT Services are one of those operations that should be outsourced.
In this article, we will be identifying 4 reasons why SMBs outsource IT services, but first.
What is IT Outsourcing?
IT outsourcing is defined as contracting vendors outside your company to perform IT task and functions. An IT vendor could be a consulting firm, managed service providers, or just individual IT professionals. Some of the functions that an IT vendor perform include, but not limited to:
- Data entry
- Data center operations
- Disaster recovery
- Maintain applications
- Network management
- Web development/hosting
- Security (virus, spam, and other online threat protection)
- Infrastructure (hardware, software)
- Application/Software development
- Application support or management
IT service providers can take full responsibility for all IT-related functionality like the maintenance of your IT infrastructure, this type of service is called fully managed services. They can also provide support to an internal IT team, simply providing IT support.
Four benefits from outsourcing IT services.
- Vendor Expertise and Sophistication
Outsourcing providers have specialized knowledge of their IT field. Bringing years of experience to your company. These experts know business technology like no other, giving you instant access to very high-level specialists. Their expertise will range in many of the functions listed above.
One of those functions, for instance, that would see an instant enhancement is that of cybersecurity and compliance. Every day data is being breached, at no time should your data be in a vulnerable position, especially as an SMB. Cyberwarfare is real and these criminals enjoy targeting unsuspected businesses that cannot afford to have adequate cybersecurity, moreover, it is essential to know and comply with industry-based regulations in the cybersecurity sphere.
This is where an IT vendor would come in, once contracted he will be able to bring his top-rated expertise in that field, bringing your business in a much better position in a fraction of the time.
- Improved Quality of Delivery
Most of the time, with an SMB, their internal IT team would not solely be working on one particular task, i.e. they won’t just be focusing on networking, or cybersecurity or application development and the like. Most of the time an internal IT team would be multi-faceted, handling many functions all at once and learning/implementing new functionality as they arise.
There is an immediate problem with this method of IT work dominant in SMBs. As the saying goes ‘Jack of all trades, but master of none”. The problem which arises is that the task in question would be performed subpar. This is due to several reasons;
- The team is not an expert in that field or,
- The team cannot dedicate the amount of time needed since they are juggling so many other task or,
- The team is not familiar with that new technology and has to learn as they implement it.
With an outsource IT, provider, they have the right/trained expert for the task. They have spent many hours mastering that craft and only focuses on that task/function in question. Therefore, there will be improved quality of delivery from a task performed by an outsourced IT service provider than an internal IT team.
- Increased focus on core competencies
Steve Jobs is famously quoted as stating, “Do not try to do everything. Do one thing well.” No greater advice has been given, especially in the realm of SMBs. As an SMB, one has to be laser focus on one or a set of expertise that would drive the business in the direction that it has to go.
If IT services are not one of that expertise then why invest so many hours and valuable resources on a part of your business that is draining you from focusing on other more important parts? The reality is managing IT services will utilize a huge amount of resources and attention from any business. By outsourcing your IT services, you allow that responsibility to pass on to someone else while focusing on what is truly important.
The stress of having internet crashes or a server going down is simply too much of a headache to be juggling while there are a lot more pertinent issues at hand. By outsourcing, you gain better peace of mind and less anxiety. Hence increasing your focus on core competencies.
- Cost Reduction
By far, one of the most compelling benefits of outsourcing IT services is that of cost reduction. According to fespa.com “Organizations claim that they achieve, on average, a 15 % cost reduction through outsourcing.” Let’s consider it for a moment.
An internal IT team would appear inexpensive at first but taking into account salaries, hardware expenses, software licenses, cloud service subscriptions, maintenance cost, and a whole bunch of intermittent cost that may pop up for repairs of equipment and the like, then the price of having an internal IT team increases steadily.
When you outsource IT services not only do you save on the operation cost but on the capital funds as well. Since you would not have to invest capital into those functions to get them up and running. Thereby making capital funds available for use in core areas.
Ultimately, outsourcing allows the opportunity to change fixed IT costs into variable IT costs, where you only pay for what you use when the need arises.
In conclusion, outsourcing your IT services may be the best decision your company makes this year. By gaining vendor expertise and sophistication, you will be able to level the playing field with other companies, adapting to new technology, and having your IT operations and the highest standard.
You will have improved quality of service; by gaining access to these experts, your IT-related functions would be delivered at a much higher standard. There will be an increased focus on your core competencies, now you do not have the stress of dealing with the IT operations. Finally, you will be able to enjoy the cost reductions associated with your IT operations being managed by an outsourced company