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June 23, 2022

IT Outsourcing: Pros And Cons

Just like with anything else, there are pros and cons to outsourcing your IT needs. However, with the significant costs involved in IT development, maintenance, implementation, and management, we believe the pros take the win, but we will let you be the judge of that.

Why It’s Beneficial to Outsource Your IT Processes

Believe it or not, Information Technology (IT) was once the lowest item on the priority totem pole inside the offices and board rooms of companies, both large and small.

You do not have to be a business owner today to know that it is now close to the top. The digital revolution, invention of the smartphone, 5G cellular advancement, high-speed internet availability, and digital marketplace have made IT essential instead of optional.

IT Outsourcing Pros

Equipment Cost Reduction

There is no way around total equipment cost outsourcing when it comes to IT. Even if you outsource a majority of your IT needs, you must still provide your staff with:

  • Computers
  • Internet
  • Operating systems
  • and programs to accomplish their tasks and duties (Microsoft Office)

However, the costs of these necessities are minimal compared to the costs of the equipment needed to establish online commerce sites, connected and interlinked websites, mobile apps, etc.

Outsourcing these needs to a partner company that already has this infrastructure in place eliminates the startup and implementation costs you would have to bear alone.

Equipment that is considered essential can cost the average company between $500 and $5000 a year per employee. Multiply that by tens, dozens, or hundreds of employees, and even the basic needs become expensive. Imagine the cost of the more advanced systems.

It is obvious that outsourcing this need can help your bottom line.

Labor Cost Reduction

While IT equipment costs can be metaphorically described as high as mountains, the cost to employ IT professionals matches and even exceeds them. Rookie IT professionals enter the workplace with salaries over $40,000 annually, and seasoned IT professionals range from the 60s and 70s a year to well over $100,000.

Combine this with benefits packages like health insurance, profit sharing, pensions, social security, and worker’s comp insurance, and the costs continue to accumulate at a rapid pace.

The costs of these professionals can rise even higher depending on your company’s location and their accrued time on board.

If you want to retain good people, they must first be happy, and second, well-compensated for their work. If they don’t see any potential for an increase in their compensation, they may start looking elsewhere; therefore, your IT labor costs will rise even further.

Content Delivery Quality

Let’s face it, when it comes to saving money, you will try just about anything, right? However, when it comes to designing websites, mobile apps, email marketing, building internal networks, and designing software and programs, it is perhaps better to leave these tasks to the professionals.

The worst mistake you can make in an age where consumers expect, and even demand, high-quality content from the companies they do business with is to try and handle these complex tasks without the proper resources, expertise, knowledge, and guidance.

Aside from the quality of content, there are also security concerns that change daily. Most businesses, regardless of their industry, collect sensitive data from their customers. At a minimum, you will collect names, birthdates, addresses, and perhaps even IP addresses.

This information can be stolen and used by scammers and hackers for malicious purposes. The liability for that exposure rests on you, and the responsibility for protecting it does as well. Outsourcing this need to a partner who specializes in IT significantly mitigates this risk.

Customer Satisfaction

There is an old adage that says, “A happy wife is a happy life, and a happy customer is a happy company.”

If customers do not enjoy their digital experience with your company, they are less likely to continue doing business with you and more likely to tell others about their negative experiences. In fact, a happy customer may tell one or two people about how satisfied they were, but an unhappy one will tell nine or more.

Outsourcing your IT needs with a proven and trusted partner like AwesomeOS can boost the experience your customers have interacting with your business digitally. Like it or not, we live in an online and nearly cashless world.

Consumers have come to expect easy online transactions, robust online commerce webpages, and easy and responsive online communication. Keep your customers satisfied by giving them the proverbial What they want.

Global Talent Access

Having access to a global network of IT professionals and talent is perhaps one of the greatest benefits of IT outsourcing. Even if your company’s budget can allow for significant IT improvements, you will still be limited by your location and geography.

Outsourcing this need can grant you access to IT talent from anywhere in the world, especially since much of the work done by IT experts can be done remotely. This opens up doors of opportunity that simply cannot even be knocked on when IT is kept in-house.

IT Outsourcing Cons

Switching Can Be Costly Upfront

Despite the enormous cost-savingbenefits of outsourcing IT, the up-front costs to do so will not be minimal. You have likely implemented IT on some level within your organization already, and that has come with significant investments.

Switching those services to an outside company can render some of those investments mute. Therefore, when making the decision to outsource certain IT services, it would be prudent to do an extensive cost-benefit analysis that looks beyond the immediate future and into the distant future to determine if sacrificing the investment is worth it.

While we believe the long-term benefits outweigh the costs, you know your business better than anyone else, and it deserves a thorough analysis.

Poor Employee Morale

Feeding on the first con is the issue of poor employee morale. As we just mentioned, it is highly unlikely that you are considering outsourcing IT without having some sort of IT infrastructure already established.

As such, you most likely have employees on staff to maintain those systems. Outsourcing their jobs to another company may lead to increased anxiety amongst them and other employees. Poor morale in the workplace is a serious issue that cannot be taken lightly.

To mitigate this issue, we recommend you examine other areas of your business where they may be beneficial and productive, as well as assist them with job placement at other companies should you determine that is not an option.

Showing your staff that you care more about them and their welfare than you do about cost savings and profits will go a long way in maintaining and even boosting morale.

Loss of IT Resources

Similar to poor employee morale, outsourcing IT can also lead to a reduction or loss of IT resources. Once you choose to outsource those needs, you no longer have a need for some of your IT infrastructure.

This will inevitably lead to you downsizing or liquidating those assets. By doing so, you are putting yourself back at square one should you ever choose to discontinue utilizing outsourced IT services.

Starting this department and service back up will come with a high cost that will likely trump the cost that it was when you first started it due to the consistently rising costs of IT equipment and professionals.

Factor in the workforce shortage currently plaguing industries across the spectrum, and it is easy to see how quickly these costs can accumulate.

Reduced Control

Losing a portion of control is a relevant and inevitable aspect of outsourcing any service, operation, or part of your company. It is essentially unavoidable. However, this issue exemplifies how important it is you choose a company that understands this concern and takes the necessary precautions and steps to mitigate its impact on your company.

Losing control can be frightening, especially in a competitive market, and this again raises the importance of doing a thorough examination of your business needs and choosing a partner company that not only understands your concerns and goals but also supports them.

AwesomeOS Is Your Outsourcing Solution

We hope that these examples of the pros and cons of outsourcing your IT services and needs have helped give you an idea of where to begin the process of deciding what is best for your company moving forward. At AwesomeOS, we specialize in the hyper-growth of your customer’s experience when interacting with your company online.

We recognize that losing control of certain aspects of your business can not only be frightening but can dissuade you from making positive decisions for your outsourcing needs. In an effort to mitigate those fears, we have built a company with a core purpose of honoring your core purpose.

We offer flexible month-to-month service agreements, all-inclusive rates that are conspicuously void of hidden fees, and a team approach that is focused on replicating your company’s culture, mission, and goals.

We believe outsourcing is best approached from the perspective of smartsourcing. Smartsourcing approaches the outsourcing task from a perspective of identifying strengths and weaknesses, focusing on your core principles, purpose, and why, and then using that data to make informed decisions that assist you in innovating what you do and amplifying why you do it.

Contact us today to discover why we are the partner you need to eliminate your fears of outsourcing and enhance your customer’s experience and engagement with your company!

Sources:

How Much Does Technology Equipment Cost For My Business? | Starter

Average IT Professional Salary | Payscale.com

The Pros and Cons of IT Outsourcing | Journal of Accountancy

What’s More Dangerous Than a Dissatisfied Customer? A Silent One | Market Connections

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