6 Challenges that Drive IT Outsourcing
When it comes to deciding what technology expertise to develop and staff internally and which can be trusted to a managed service provider, however, there are no one-size-fits-all answers.
Some of the top IT outsourcing challenges that affect strategies include:
- Balancing In-house Resources with Outsourcing. To gain synergies and reduce costs, many providers are bundling packages of services together, sometimes pushing enterprises to outsource more than they wish in order to get a better deal. Rather than take an all or nothing approach to outsourcing, many enterprises are going the hybrid IT route, keeping mission-critical applications in-house, but outsourcing those that need to leverage the scalability, expertise or cost-efficiencies that managed service offers. The best arrangements foster both efficiency and innovation for both parties.
- The Effect on Information Security. Some technology areas, such as information security, are too complex and fraught with risk for IT to manage alone, but on the other hand, the sensitive nature of security means it’s hard to trust the responsibility to outside sources. In the Deloitte survey, 23% of respondents indicated that cyber risks affect outsourcing decisions, but shows that the majority were adjusting their approach to view outsourcing as part of the solution, not the problem. Many midsize enterprises consider security-as-a-service outsourcing as a way to gain access to the latest technology and expertise while reducing their exposure.
- The Demands of Disaster Recovery. Disaster recovery is another demanding area ripe for outsourcing. Managed business continuity and disaster recovery services are built to provide cost-effective, on-demand availability and scalability few in-house IT departments can match. The Computer Economics IT Outsourcing Statistics 2015/2016 study found that 92% of IT organizations that outsource their disaster recovery said their costs were the same or lower than managing it in-house, and that outsourcing of disaster recovery has the highest potential for successfully lowering costs when compared with 10 other commonly outsourced functions.
- The Right Services to Outsource. The Computer Economics study also found that the outsourcing of Web-ecommerce systems, IT security, data center operations and application hosting have the highest success rates for improving IT service levels over performing the same functions in-house. When deciding which functions to outsource, organizations need to assess their current talent pool and IT initiatives and determine where the highest need and return from outsourcing will be.
- Keeping Up with Technology Integrations. According to Mary Shacklett, president of Transworld Data, a technology research and market development firm, system and technology integration is the hardest work in IT. She goes on to state there simply isn’t enough staff bandwidth to integrate all the diverse technologies that corporate IT departments are expected to implement. CIOs see this, so they’re looking to providers who have integration consulting experience or do the integrations themselves.
- Meeting Compliance Mandates: Deloitte reports that 75% of the respondents felt confident in their outsourcers ability to stay on top of legal and regulatory issues. Choose a provider who understands IT governance. In most instances, a managed service provider will provide a higher level of initiative to meet compliance.
An outsourcing partner with the expertise and flexibility to provide a range of services to meet your needs will bolster both efficiency and innovation. Read our eGuide IT Outsourcing Pros and Cons for more information.