In modern business, IT has continued to expand at an incredible rate, and today’s organizations must choose between in-house IT management and choosing an IT outsourcing company. What began as a few spreadsheets and workstations became server banks, and server banks became data centers. What started as a few tools to help operations grew into ERP. A Rolodex of customers became CRMs. Telecom systems became information platforms, and office programs became cloud-based collaboration platforms. Marketing campaigns have now become expansive digital operations. At the same time, cybersecurity has grown from physically defending your local network to a vast array of tools designed to keep data safe while team members work from anywhere.
Everything is digital, and every department and employee requires IT support. Also, individual sectors still need highly specific solutions for things like running manufacturing plants or monitoring seismic activity. So the question is this:
What do you outsource, and what do you keep in-house?
This is a more complex choice than ever before. But the incredible scope of IT makes it necessary for nearly every business in the modern world. Today, we’re taking a closer look at the importance of this decision. We’ll also examine how to prioritize both flexibility and control when considering an IT outsourcing company.
To Outsource or Not to Outsource: The Question Is Far Too Complex
Every business has its own approach to deciding which elements of IT to outsource. Some choose to outsource the most generic IT operations while keeping the exotic and specific tasks for the in-house team. Some like an in-house team that handles routine needs while outsourcing for each new, challenging, or temporary IT need. Both approaches have upsides and downsides. It depends on your business model and IT policies as to which is the correct baseline strategy.
What Can Your In-House IT Team Do? What Must You Do In-House?
Start by examining what your in-house team can and must do. Are there operations that you absolutely cannot outsource? Consider operations that are too private or delicate to trust to outsiders with an imperfect understanding of your sector or business. These operations are typically kept in-house.
In contrast, many companies have little to no IT processes and essentially nothing special about their IT needs. Every restaurant and most retail brands, for example, have about the same IT requirements as their colleagues. They also have no specific technology that absolutely must be kept in-house. It would be possible to either keep everything in-house or outsource all the IT necessary to stay afloat.
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What IT Do You Not Cover In-House That Your Business Needs?
The next question is whether there are operations that your in-house is not prepared to offer but that your business needs. Most businesses, for example, outsource their data storage to cloud host providers. Keeping a data center or even excessive server banks is less than practical. Also, companies with (comparatively) minimal IT needs may outsource the entire department and trust that their easier-to-understand core operations will receive steady support.
The rise of the As-a-Service model has also expanded how outsourcing IT works. Sometimes, it’s possible to hire a different as-a-service IT outsourcing company for every sub-division of IT that a company requires.
The Importance of Control in IT Outsourcing
The next consideration is how much control you will have over the outsourced solution. Today, there are thousands (even hundreds of thousands) of one-size-fits-all IT options. Some may be perfect for your business, and some may not be. These supported solutions or service contracts are designed to fit the needs of the majority of businesses.
Relying on Optimized Standard Services
Most restaurants, for example, need standard IT support for the website, online orders, payment processing, and other essentials. But they need very little in the way of custom processes. Out-of-the-box IT outsourcing can be a way to access optimized IT strategies while investing very little in internal IT staff or resources.
This doesn’t just mitigate on-team expenses and challenges. Any IT operation that can function as a one-size-fits-all solution is likely to have already been excellently optimized by teams that provide these services to hundreds and thousands of clients at one time.
Maintaining Control Over Nuanced IT Needs
In contrast, a manufacturing plant may need extremely specific IT support for everything from custom applications to payroll management. Even operations that seem standard and easy to replicate may be so tightly linked with internal data that control is absolutely necessary. Without full access and control over your IT solutions, the nuances of your business can be lost in one-size-fits-all contracts.
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Predicting the Need for IT Flexibility
The second major factor in IT outsourcing is knowing what is around the technological corner. Software capabilities are still developing at a breakneck speed. Mobile, cloud, communications, analytics, and AI development have all changed the landscape for what defines an optimized IT solution in the last five years alone. Who knows what might occur during a five- to 10-year contract with an IT outsourcing company?
Keeping Up With the Latest and Best Solutions
Consider the consequences of signing a long contract with an IT provider that does not upgrade its technology and solutions to adapt to the new and competitive solutions that become available with each passing year. Or worse, they do incorporate new solutions, but your legacy contract is excluded from the benefits.
It is no longer practical to assume that either party knows what the right strategy or best available IT solutions will be in a time span of more than two or three years. Will a new AI solution suddenly take over? Will mobile and smart homes experience another technological explosion? When will a better IT outsourcing company for your specific sector become available? No one can truly say.
The Freedom to Upgrade One IT Aspect at a Time
Then there is the very real possibility that only one or two aspects of your IT operations will need to be upgraded in any given year. The recent cloud migration, for example, likely didn’t impact your continued need for in-office hardware support. Expanding to a multi-channel and cloud-phone communication system likely did not change your need for secure customer data storage services. However, the recent remote work migration changed the playing field significantly. Suddenly, companies needed to provide laptops and high-speed internet to every employee. Both technology and circumstances change.
Since the initial tech boom, many businesses have discovered that outsourcing one aspect of IT at a time to a more adaptive IT outsourcing company provides the flexibility needed to change one aspect of IT at a time as innovations or challenges arise. Flexibility in IT operations is a must, whether you’re incorporating it aptly into your outsourcing contracts or keeping your options open with piecemeal solutions from various IT outsourcing companies with shorter contract durations.
How to Evaluate What IT Processes Are Best to Outsource or Handle In-House
A detailed evaluation is the best way to manage the complex question of company IT in the modern landscape. In order to get the best results at the best price, you will likely need a combination of in-house IT experts and excellent IT outsourcing company partnerships. But deciding which tasks to outsource vs. keep in-house should be decided on a case-by-case (and often year-by-year) basis.
Quantify How Your IT Needs Are Standard vs. Unique
First, identify what of your IT is completely standard vs. the operations that are unique. In today’s environment, most businesses find it best to outsource standard IT needs to a trusted service that pairs a solutions platform with expert support. As for your unique operations, decide whether your internal IT team is the best equipped to handle a highly industry-specific task or if it would be better to put projects in the hands of outsourced teams to stabilize the workload of your in-house IT.
For example, you may have a core of data analysts but choose to outsource a data migration project.
Allow Your In-House IT Team to Compete With the IT Outsourcing Company for the Most Efficient Solution
One mistake far too many companies make is allowing IT outsourcing companies to bid for the most efficient solution while excluding in-house from the competition. Many in-house IT departments are, in fact, fully prevented from seeking better solutions and improving operations in the name of stability. But with this mindset, companies lose the chance to save a staggering amount in both operational costs and contracting fees.
Let your in-house team compete if you have an in-house team. They understand your business better than any outside team. They will also be challenged and inspired to help you find the best possible solutions for internal operations. Once your team has given their all, you will also have a great baseline and deeper understanding of what to negotiate for if you choose to outsource some or all of your IT needs.
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Build Hybrid IT Solutions to Empower Your In-House Capabilities
A hybrid team is one of the best solutions to remaining both flexible and in control of your IT solutions. This is when you blend an outsourced IT service with your in-house team. Then both can work together as a single IT department.
Some companies use the hybrid model to train their own internal IT core, even if there wasn’t an internal IT team before. Those that already have a strong internal IT team benefit from hybrid approaches because it allows the IT professionals themselves to split up tasks in the most efficient way possible. Also, your outsourced team gets an inside view of the company and how to serve your specific needs best.
Examine Contracts With a Legal Fine-Tooth Comb
Make sure that when you sign an outsourced service contract, there are no loopholes that will undercut the benefits. For example, some agencies will charge countless “extra” fees for services that the business assumed were included in the core services of the contract. Things like servicing computers or fixing problems when called might be cleverly worded in the contract to ensure that your imagined savings never manifest.
Make sure your corporate lawyer is in on the decision. Give them a chance to tailor both halves of the contract. Then you can better meet your company’s IT optimization goals — and remain in control.
Build Contracts That Make Growth a Mutual Gain
Outsourcing contracts that provide a win-win scenario when your business thrives are among the best for a flexible and efficient IT arrangement. A little profit-sharing or some improvement-based bonuses can ensure that your IT outsourcing company has an incentive to seek out and provide your company with cutting-edge solutions rather than holding out for a new contract negotiation when you decide to update and expand.
The right IT outsourcing solution is unique to each individual business. The best solutions rely on control, flexibility, and understanding your own internal IT needs well enough to decide how to split up in-house vs. outsourced aspects of the company IT. To more deeply explore your own IT needs and when to outsource, discover nearshore software outsourcing through ParallelStaff. Contact us today.
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