Mitigating the risks of IT outsourcing

Nowadays it is common for many businesses to outsource at least one or more of their IT functions.  The goal is usually to save money and work more efficiently and effectively.  Yet if you don’t mitigate the risks involved, you could end up both losing out financially and failing to get the most from the outsourcing arrangement.

Here we suggest a few best practices to consider when outsourcing your IT functions:

  1. Consult your internal users – Ask for candid feedback about whether your organization’s technology is meeting your employees’ needs. What help from an outside provider do they really need?
  2. Consult with other organizations – Contact other organizations that have outsourced their IT functions.  Much can be learned by talking with trusted colleagues about their outsourcing experience.  Ask them how outsourcing actually helped — or hurt — them.
  3. Weigh opportunities vs. risks – Identify opportunities beyond cost savings. For example, outsourcing non-core IT functions — such as management of HR systems and supply-chain technology — could free up internal resources for projects you’ve put on the back burner but that have strategic importance. Keep in mind though, outsourcing too many non-core processes, or doing so improperly, could leave you with too little control of these functions and expose you to inefficiency or compliance risks.
  4. Refine your relationship expertise – Many business owners believe that, once they sign the deal, the contract will take care of itself.  As a result, they don’t adequately manage the relationship and often find themselves in conflict with the vendor or stuck with unsatisfactory results.  Clarify your expectations at the onset of the relationship and revisit them often by keeping the lines of communication open between you and your outsourced provider.  You may need to develop new skills, processes and metrics to ensure the service provider deliver the results expected.

In today’s global economy, IT outsourcing has become — in many industries — a competitive necessity.  Whether your company is large or small, we can help you assess, negotiate and maximize the bottom-line benefits of an outsourcing arrangement. Give us a call to let us know what we can do for you.

© 2015

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