Pros and Cons of IT Outsourcing
- It makes up scaling easier and economically viable due to availability of infrastructure and skilled human resources at a lower cost.
- Companies can focus on their core business functions as the back office operations would be taken care of by the outsourcer.
- Nullifies the cost of infrastructure and some others such as training and benefits of employees.
- Risk and rewards are shared between the buyer and the outsourcer.
- It enables companies to be able to interact with its customers round the clock, even when the business is closed the outsourcer is working.
There are downsides of outsourcing as well which one must take into account. One of the biggest concerns any company faces is the issue of security. Great care needs to be taken for trusting a third party with a company's secured data. Measures like having an airtight agreement and penalty clause is imperative. Some of the other common disadvantages are:
- Quality: It's an obvious universal fact that an outsourcer will not be as enthusiastic about your customers as would an internal employee.
- Costs: There are always some extra costs that the buying company will have to incur. Even after the contract is signed covering all the details, what would happen in the event that an outsourcing employee needs to be trained or has to travel to another location? That becomes an extra cost which could not have been foretold.
- Time: Another integral problem faced is time. In the case where assistance is required at the earliest, it would become a matter of how important a client is the buyer. Preference commonly would be given to the highest paying clients as the outsourcer would, in most cases be handling multiple clients at any given time.
- Control: Handing over ones operations to another company means that one loses control over the outsourced process, trust plays an important part in a good work relationship.
To have a good working camaraderie and to continue working smoothly it's important to keep disadvantages such as the ones mentioned above at a bare minimum. Each company has its own set of complications and reasons to opt for or against IT outsourcing. Keeping these advantages, drawbacks and the company's future strategy in mind a calculated decision has to be made.