At some point in time, technology outsourcing becomes a necessity for all businesses. Whether your staff lacks the expertise to manage and maintain network infrastructure, or your data requires secure off-site storage, there are a number of reasons why technology outsourcing eventually develops into an operational requirement. Even mega-tech giants like Microsoft and IBM, whose core competencies exist through excellence in all things IT, outsource their technology functions to some degree.
An appropriate amount of technology outsourcing can help relieve the burden of overseeing the “meat and bones” of your technology operations in a competitively advantageous way. By effectively outsourcing select functions of the IT Department, your business should experience a leaner list of responsibilities and a plethora of new opportunities to pursue. What many firms do not take into consideration, however, is that without adequate execution of their outsourcing initiatives, they may find themselves stuck in a problematic situation.
The goal of this article is to shed light on how your business can reap the benefits of IT outsourcing without experiencing the potential pitfalls of an ineffective strategy. Outlined are three (3) possible benefits your business can experience with IT outsourcing, including the hazards that can arise from ineffective implementation of your strategy, and also the solutions to prevent those hazards from damaging your operations:
With a leaner list of responsibilities, your IT Department finally has the capacity to focus on initiatives that probably should have been instituted years ago. The technology team is freed up to dedicate itself to tasks that will benefit the business in the long run, such as drafting updated policies and procedures or researching cutting-edge software tools to aid the front office. Rather than meddling with daily, reoccurring assignments, the IT Department has transformed into a forward-thinking segment of your company.
The Potential Pitfall: Misplaced Expectation on Capability
Sometimes management places expectations on their technology team without first evaluating the talent at their disposal. What if the whole point of your outsourcing strategy was to free up time for your IT Department to train the front office on how to better utilize their technology tools, just to realize they are incapable of creating an effective training program? More often than not, IT staff are extremely capable of maintaining technology infrastructure but lack the necessary skills to communicate with other departments. Now your business lacks the skill set to accomplish the much-needed, long-term technology initiatives, which the outsourcing plan was originally intended to allow for!
The Solution: Evaluate Talent Before Placing Expectation
Before you expect your technology team to tackle newfound initiatives, it is critical that you evaluate their overall work skills. If the initiatives require training and communications skills, confirm that your IT Department has these competencies. Outsourcing has the potential to free up a lot of time for your employees to accomplish new things, yet it can all go to waste if you don’t already have the necessary talent on hand.
Instead of viewing the outsource firm as a “hired gun” with minimal involvement in your business, you look at them as a contracted technology partner. In today’s market, some technology companies act as an all-in-one managed IT solution. These solutions can fulfill a business’ operational needs and, at the same time, share their valuable expertise with company executives. By building a sound relationship with your vendor, your company successfully leverages their extensive knowledge when it comes to making strategic technology decisions.
The Potential Pitfall: Wanting a Partner but Getting a Vendor
When a firm hires a Managed Service Provider (MSP), there is usually a set of expectations that follow. Frequently, however, the MSP ends up providing something less satisfying than originally anticipated. When contracting with MSPs, companies don’t always realize that many providers actually operate as “vendors” that need to be given daily instruction, as opposed to acting as a strategic “partners” that will proactively pursue technology initiatives for the betterment of your business.
The Solution: Understand All Contractual Agreements
Before finalizing the contract with a third party, be sure you fully understand what services are needed. Are you looking for a “partner” that will proactively research, recommend and implement new technology for the firm? Or do you want a “vendor” that will perform maintenance and system support functions only when called upon? The key is to compare your needs against the available services of the third party. Ultimately you must conclusively ensure that what is agreed upon in the contract is exactly what your business requires.
The cloud has enabled your business to utilize various service delivery models (e.g., SaaS, PaaS and IaaS), all-the-while ensuring your servers and data depositories are secured at an offsite facility. Cloud utilization has increased the overall flexibility of your technology operations which, in turn, has inspired your technology team to explore a new realm of possibilities.
The Potential Pitfall: Loss of Security Control and Oversight
Although the cloud provides a wealth of flexible tools, it also means certain components of your technology operations are no longer maintained under the comfort of your own roof. For example, utilization of the software-as-a-service model requires trust that the provider will effectively secure your data. However, are you confident they enforce strong data security measures? Additionally, if you choose to outsource the development of a custom application, are you sure the developer has a plan to aid in its migration to your production environment? Some businesses want to leverage the cloud but simply aren’t prepared to handle the lack of oversight and control involved.
The Solution: Build Trust with Your Cloud Provider
Always assess your vendor’s security controls before making a leap of faith to the cloud. Require the third party to provide evidence of an independent security assessment (preferably a SOC-2 report) before contracting for services. In addition, an in-depth evaluation of the vendor’s service level agreement (SLA) should help to indicate if they will perform the cloud services your business actually needs, such as assisting in the migration of a custom application to the production environment. It’s vital to never leave anything to chance. All you can do is build the utmost trust with a third party by evaluating their commitment to serving you at the highest level.
Electing to outsource technology should be seen as an investment because investments, like outsourcing, have risk and reward potential. If you want to make the smart outsourcing investment for your business, carefully consider all situations that can go awry and formulate a strategy to mitigate the risks to your operations.