Considerations and concerns for IT outsourcing
Considerations and concerns for IT outsourcing
Insight

Considerations and concerns for IT outsourcing

When done correctly, outsourcing can help your business succeed in today’s increasingly complex world by reducing costs, enhancing value, improving services and instilling innovation.

As today’s digital business environment continues to evolve, so do outsourcing approaches. However, there are some common misconceptions surrounding outsourcing, which I discussed in the article 11 outsourcing myths debunked for CIO Magazine. If you’re looking into IT outsourcing as an option for your company, remember the following:

  • An outsourcing relationship is established to reduce disruption and risk—not to foster innovation. If you are looking to innovate your IT, it is your responsibility to include that in the contract and to encourage it within the culture of the engagement.
  • Outsourcing your IT does not mean you will lose your own employees. In most areas, service providers have built out their own core offerings. Rarely are they looking to invest in anchor clients and/or rebadge employees.
  • Most providers will not cover the capital costs of new delivery, rather, they will charge for upfront transition costs directly.

Alternatively, if you are evaluating your current outsourcing relationship, you should keep your eye out for signs of impending trouble in the relationship. In another article for CIO magazine—10 early warning signs of IT outsourcing disaster—I suggest looking out for the following indicators that should be cause for concern:

  • Your industry is experiencing major disruption, such as the adoption of new technologies, but your service provider is not reacting with solutions for the disruption.
  • Your service provider consistently fails to meet the agreed-upon performance levels and fails to take care of—and work to prevent—future breaches. As an outsourcing customer, you should be sending a written notice for each SLA breach to your provider with a request for a response that includes the cause(s) of the issue and the steps that the provider has taken to prevent future breaches. You should follow up to ensure that your provider did indeed take care of the issue.
  • Make sure that your provider is focused on you. If the provider’s executive leadership customer satisfaction scores are up but operational leadership customer satisfaction scores are down, they are likely too focused on executive relationship management rather than customer success.

When done correctly, outsourcing can help your business succeed in today’s increasingly complex world by reducing costs, enhancing value, improving services and instilling innovation. Learn more about outsourcing challenges, design principles and strategies here