Five Outsourcing Myths
With the explosion in flexible working, remote working and office jobs working from home, more and more employers are outsourcing their office functions.
First things first: what do we mean by outsourcing? Put simply, it's an agreement between a company and a third-party or external partner to pass on responsibility for managing elements of business process and infrastructure...
According to analyst Gartner, the global IT outsourcing market will grow from $180bn(£95bn) in 2003, to $253bn by 2008, with spending rising to a third of all IT spend in the same period. IT and communications are ideal for outsourcing, as they are vital parts of a business but not necessarily core competencies. Sadly, doubts about outsourcing still linger, so we've decided to debunk a few myths and, in the process, set you on course for change.
1. Outsourcing is a risky, immature concept rife with pitfalls for pioneers
Traditionally, a company's entire IT assets and processes would be outsourced on big multi-year deals. Sometimes these partnerships ran smoothly, but often they resulted in firms struggling to get out of constricting contracts. By contrast, modern outsourcing partners have learnt that shorter contracts and flexible terms dictated by the customer result in more productive, successful relationships. Early 'get-out clauses' are also common. This shift in practice has been described as 'smartsourcing', delivering a secure, mature and dynamic strategy that could rapidly revolutionise your business.
2. Outsourcing will alienate and de-skill my IT staff, resulting in job losses
'It certainly used to be the case that getting internal IT staff to support the idea of outsourcing was like asking turkeys to get excited about Christmas, but that's all in the past,' says Marcus Hill, a business development director at BT. Today, outsourcing the more mundane parts of the IT system makes sense. Internal IT teams have more vital projects, including managing future technology projects, to spend their time on. Hill says: 'Smart outsourcing is about moving people from routine network management to more specialised and involving areas of IT.'
3. My company will lose some control and be less flexible and dynamic
Modern agreements give firms as much control as they want, with agreed levels of control shared by the outsourcer. It's a matter of providing sufficient flexibility through robust service level agreements. IT networks, data centres, storage servers, even data applications, might be critical to a business, but they don't outwardly differentiate a company from competitors. The key to 'smartsourcing' is in deciding what's vital for your organisation to focus on, and what could (transparently to your customers) best be managed out of house.
4. Basically, it's all about cutting costs – that's the measure of success
Saving money is certainly among the main reasons for turning to outsourcing, but it isn't everything. One attraction is freeing a firm from the functional responsibilities of technology provision, and rediscovering the time and resources to focus on core business processes. It will also ensure that IT service levels for clients and employees improve. Also significant, especially for those trading internationally, is the need to comply with legislation in managing customer data. Even companies trading solely within the UK will be relieved to see this governance met by their outsource partner.
5. Total outsourcing can be the answer to all organisational woes
Outsourcing may not be right for every company but most organisations have at least some areas that would benefit from it. In most cases, our customers initially outsource the management and operation of their wide and local area data and voice networks. Next are services such as converged voice/data networks, messaging servers, data storage, through to applications. Each firm must draw a line to match its business needs. Hill explains: Why not ask someone else to run your IT for you and allow yourself to concentrate on your core business?'
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