As technology began to take a position of increased importance in the marketplaces in the mid 1980s , businesses began the trend of outsourcing their information technology needs to receive expert consultation, streamline processes, and supplement productivity through comprehensive operational support. Cost-cutting and budget efficiency were major stimuli for businesses entering the marketplace for an outsourced IT firm. Services ranging from software development to database systems were popularly outsourced during this time.
Fast forward to 2017, and perceptions around outsourced IT have shifted. Outsourced IT firms still represents almost two-thirds of the entire outsourcing industry, but a number of myths and misconceptions have circulated about IT outsourcing, leading executives astray in their decision-making regarding how best to manage their company’s IT needs. In particular, four major misconceptions have surfaced about the consequences of outsourcing IT for any business.
Misconception #1: Unforeseen Costs
One of the myths that circulates about the outsourced IT services industry is the amount of unforeseen cost involved when implementing this option. It is often assumed that outsourcing can lead to costs that undo the cost-saving potential of it. For example: let’s say someone hires an external IT expert to create a company website for them. A general budget is proposed and agreed to, and the expert starts to work on the site. As they proceed, they encounter complications that fall outside of their area of expertise.
Let’s assume that the expert in question is a freelancer who offers exceptionally low prices for creating professional websites: the budget that has been agreed to is $1000. Both parties are more than happy with this sum. However, now that the IT expert discovers a range of new skills or software languages, or plug-in techniques that they have to devote hours to learning, they are no longer satisfied with the original budget. They now ask for $2000, as they’ve already spent ‘x’ amount of hours on the site, and there is still a lot to be done.
Hence, what started as a reasonable budget can potentially balloon into a much higher sum. The company looking to have the website created continues working with the independent freelancer under the assumption that ‘well, I’ve already paid out ‘x’ amount, and I really need this website completed by ‘x’ date, and it’s too late now to hire someone else.
The scenario outlined above is a complete myth. This is simply because any outsourcing firm has a variety of technicians each with different skillsets and areas of expertise, while the integration of flat-rate support policies ensures commitment to preventive IT support, rather than reactionary activities that strain the budget in unexpected capacities.
Thus, a competitive firm will always have professionals with all the necessary skills to complete the job at hand and support your business goals competently. Flat-rate pricing ensures that your business gets the complete support it needs in a proactive manner. Here at Network Depot, we call our flat-rate-pricing-based support philosophy OneStepAhead, and it’s designed to give you and your entire organization complete peace of mind. Our model takes the best aspects of both hourly support and preventative maintenance and bundles them with a live, 24/7 help desk support system into a single, easy-to-budget flat-rate package. With the benefits realized from no unexpected fees, no unpredictable downtime, and full network security, virus protection, and data backups, your team will be able to focus their entire faculties on growing the business.
On a more wide-scale level, IT outsourcing is like any other industry in the sense that there are recommended price ranges, depending on the services requested. As such, it is possible to calculate the cost of IT services on a monthly basis based on your business’s particular needs and structure. Factors that impact the monthly cost can include the size of the company, the number of office locations the company has, the number of physical servers the company uses, the number of workstations, the data allowance, and the basic software needs. These factors represent the business details that can impact the monthly budget.
Additionally, the level of service required influences the amount of money that will be spent every month on IT outsourcing. For example, a reputable IT outsourcing company will often provide customized plans to meet the needs of your company. For example, if the information you store on the company computers is prioritized as sensitive, you won’t feel comfortable about a remote user support option, and will probably insist on a comprehensive backup and recovery service.
Thus, IT outsourcing does not amount to additional costs, simply because you order a customized plan with a flat-rate pricing model. For this reason, the unforeseen costs myth can be convincingly dispelled.
It should be noted that not all IT outsourcing companies use a flat-rate pricing model, so this is not an infallible way of determining the price. Other pricing models include a pay-by-the-hour approach, or basic “preventative” maintenance with strict hourly availabilities and billable over-time agreements in case of emergency. We consider this “break-fix” pricing model to contain many weaknesses as detailed in earlier blog posts.
Misconception #2: Strangers to the Company Aren’t Invested Like Employees
Another myth about IT outsourcing is that the outsourced company cannot be trusted to possess the same passion and drive your own employees do. It is often thought that an in-house IT department will be more enthusiastic about producing high-quality work simply because you pay their salary. Moreover, employers often like to think their employees want the company to blossom and grow, and have as much interest in success as the COO or CEO does. Who’s to say that this is essentially true or untrue? Sure, ambitious workers are common, but so are apathetic ones.
This myth doesn’t really make sense, because it would be actually much more logical to assume that an outsourced IT department would care about the finished IT product much more than an employee who gets a stable monthly salary. Simply put, an outsourced company will quickly lose the potential to gain new customers if they do not produce work of an exceptional quality, so it wouldn’t be in their best interest to do mediocre work.
Technically speaking, an outsourced IT department only expands in proportion to the companies it has helped to expand, so why on earth would it risk the success of its own company? Moreover, the assumption that innovation in IT can only occur when the IT expert is well-versed with the client company’s strategy is erroneous, particularly when you consider that innovation in the computing industry largely grows out of need. Surely it is more logical to assume that IT outsourcing companies have a more comprehensive knowledge of the entire IT industry than an in-house employee who focuses on maintaining the company server.
Misconception #3: Outsourcing Companies are Inconvenient to Communicate With
This misconception about IT outsourcing companies is understandable, but doesn’t represent reality. The presumption is that because the outside company is not physically at the location of the IT system they are hired to maintain, that emergencies and specifications required at short notice may not be implemented quickly. An in-house IT support worker theoretically, would resolve any issues more quickly because they are on-site.
The reality of this scenario is that IT issues are resolved just as quickly as in-house employees for two reasons. First, outsourcing companies often provide remote user support for all employees working at the client company. Thus, no matter who is having a problem with their computer, the outsourcing consultant can access that computer and fix it from afar, without even needing to step foot in the building.
Second, if you’re responsible for deciding whether your company should use outsourced IT and are somewhat wary of remote support, outsourcing companies often also offer another service that has a decidedly more personal approach: on-site support. In other words, someone from the outsourcing company is easy to reach, because they’re in your office building! This face-to face approach is an effective way of appeasing the worry that outsourced workers are strangers, because no doubt the on-site personnel will soon become as much a part of the furniture as that old sofa in the recreation room.
Depending on your company’s needs, and depending on the services offered by the outsourcing companies you’re interested in hiring, you could potentially have someone on-site as often as you like. Thus, the idea that they will be too far away to resolve an issue as soon as it arises is null and void.
Misconception #4: System Knowledge is Only Earned In-House
It is widely conceived that an in-house IT support worker will possess greater knowledge about the in-house system than an outsourcing professional. This misconception arises from the fact that company workers who maintain IT systems do this, and only this; while outsourcing professionals have a list of clients, all of whom have entirely different systems.
This is a myth. You must take into account that outsourced IT companies are more in-tune with developing technologies and platforms across industry sectors than individuals working solely for a particular company. In-house IT support is a demanding job that requires impeccable time-management and task prioritization skills. There is a daily mountain of work that lands on the desk that never seems to get any smaller. As a result, employees can struggle to keep up with the daily demands of their basic employee functions while also staying up-to date with the constant software and hardware modifications that impact the system they’re working on.
Conversely, IT outsourcing companies are well-versed in the fast-paced technology industry. We are all familiar with how quickly technology progresses; how rapidly different gadgets become dated, and even obsolete. The same level of progression occurs within the computing industry: applications, computing languages, and even the most fundamental concepts of software coding are constantly modified and updated. Who better to stay on top of this fast-moving progression than the professionals who specialize in it? Their company’s livelihood depends on their IT expertise.
In-house systems may all be very different: this is true. However, the misconception that in-house workers can somehow maintain it more effectively than outsourced professionals who make an entire career out of researching and staying ahead of the game is entirely misled. In reality, employers over-estimate the skills of an in-house IT department if they think it’s a top priority for employees to learn new computing languages and codes while carrying out the essential daily tasks of the business where they work.
Thus, finding a company that can provide the tailored options your company requires will make the process run much more smoothly than popular myths and misconceptions would suggest. While outsourcing has become less trendy than in its golden days of the eighties, it’s still one of the wisest decisions a company executive can make.