What Is IT Outsourcing and When Does It Make Sense for Your Business?
If your company is scaling up, overhauling its IT infrastructure or finds itself with an IT skills shortage, you may be considering IT outsourcing.
In the face of rising cyber threats, cloud adoption, hybrid working models and many challenges, companies are reassessing how they manage their IT function. Outsourcing could be the answer, but does it make sense for every business?
Here, we’ll take a look at how IT outsourcing works, including the different forms it takes, the benefits and potential risks. This should help you decide if it’s the right choice for your company.
What Is IT Outsourcing?
IT outsourcing involves engaging an external provider to manage specific IT functions or projects on your company’s behalf.
There are a number of different forms it can take, depending on the needs of the business:
- Fully managed IT services – an external provider takes responsibility for all day-to-day IT operations
- Co-managed IT – this is where an outsourced partner works alongside an internal IT team to provide additional expertise or boost capacity
- Project-based outsourcing – external specialists deliver a specific initiative, such as a cloud migration or infrastructure refresh
- Staff augmentation – this is where temporary or contract-based engineers supplement your own internal teams.
For businesses that already have an internal IT team but require additional capacity or specialist expertise for specific projects, a flexible “bolt-on” approach can often be the most practical solution. Rather than fully outsourcing IT operations, companies can extend their internal capabilities by bringing in external engineers, project specialists or escalation support when required.
Avoira offers a range of IT Team Bolt-On Services, designed to support internal IT teams with project delivery, specialist skills and additional resources when workloads increase. You can explore the full overview in our flyer.
Ultimately, the key goal of IT outsourcing is to gain access to broader expertise. It can help your company improve resilience and get critical projects over the line, all while potentially lowering costs compared to hiring, training and maintaining an in-house team.
IT outsourcing is usually managed through formal Service Level Agreements (SLAs).
What IT Services Can Be Outsourced?
Almost any IT function or service can be outsourced, either partially or fully. It can be helpful for day-to-day management, as well as specific projects.
Here are some of the areas where IT outsourcing tends to be used the most, including:
- Infrastructure management – such as server monitoring and maintenance, network management, and data centre operations
- Cybersecurity – for example, 24/7 monitoring via a Security Operations Centre (SOC), vulnerability scanning, endpoint protection, and threat protection and response
- Cloud services – such as Microsoft 365 administration, cloud migration planning, and backup and disaster recovery
- End-user support – such as IT helpdesk services or remote troubleshooting.
When Should a Business Outsource IT?
Timing is important with any key business decision, but knowing when to outsource IT services can be tricky. The good news is that there are certain triggers and signs to look out for, which can help you make the right decision at the right time.
For example, you may want to consider it if your organisation is experiencing a period of rapid growth, such as expanding into new markets or hiring whole new teams. Without support, your internal IT teams may struggle to scale at the same pace.
Another key trigger to look out for is cybersecurity concerns, especially if you’ve recently faced threats/attacks, or are worried about a lack of 24/7 monitoring or specialist expertise.
Talent shortages or major changes to infrastructure can also be indicators that outsourcing is worth exploring. Any digital transformation project or new technology adoption – as well as company changes such as mergers and acquisitions – could make it well worth bringing in a specialist service for support.
Benefits of Outsourcing IT Services
So what are the benefits of outsourcing IT services? Here are some of the main advantages to consider:
Access to Specialist Expertise
One of the biggest advantages has to be the access to specialist expertise.
Providers usually employ specialists across a range of fields, including networking, cybersecurity, cloud and compliance. So instead of relying on a small in-house team of generalists doing their best to keep up – your company can gain immediate access to a much wider skills base.
Predictable Cost Structure and Potential Savings
Managed service agreements usually have fixed monthly fees, which reduces unexpected expenditure and makes budgeting easier.
Outsourcing can potentially save your company money too. While it does come at a cost, it could be much more cost-effective compared to sourcing and hiring the talent you need, maintaining an in-house team and keeping up with training.
There are also costs that come with having an in-house team, such as additional office space, employee benefits, statutory sick pay, NI contributions, pensions and many others.
Scalability
The beauty of outsourced services is that they can be scaled up or down as your business requirements change. This can be particularly valuable during periods of growth or restructuring.
Freeing Up Time To Focus on Core Business Operations
With IT services taken care of, leadership and operational teams are able to spend less time dealing with IT issues and more time focusing on revenue-generating activities.
Potential Risks and How to Avoid Them
As well as considering the benefits, it’s also a good idea to think about the potential risks of IT outsourcing and how they can be avoided.
Here are a few to bear in mind:
- Loss of control – where businesses feel disconnected from their IT operations. This can be mitigated by defining strong SLAs and regular performance reviews.
- Data security and compliance concerns – as entrusting sensitive data to a third party can introduce risk. This can be avoided by choosing certified providers, reviewing security credentials and putting robust contractual protections in place.
- Vendor lock-in – a long-term contract can make switching providers difficult, but it’s easily avoided by agreeing exit terms upfront
Outsourcing vs In-House IT Teams
For many companies, it isn’t a case of either/or when it comes to managing IT. It’s about finding the right balance and ensuring that in-house teams and outsourced services work harmoniously together.
The key is to set your goals – do you need to fill a skills shortage and access specialist expertise, or is it a case of freeing up staff time for core operations? Cost concerns may be your main priority, where outsourcing can offer predictable fixed fees compared to the fluctuating costs of recruitment and workforce management. Alternatively, you may have a major infrastructure upgrade or other project in the pipeline.
Not sure how to outsource IT services? Here at Avoira, we can help you take those crucial first steps. We offer fully managed ICT services, as well as supporting your existing infrastructure and providing standalone solutions.