The Pros and Cons of Outsourcing IT Managed Services

We’re constantly striving to save expenses and streamline processes as company executives. Outsourcing help desks, network infrastructure, and application maintenance may sound enticing since we can pay a small monthly charge instead of maintaining an in-house IT workforce.

The prospect of huge savings is appealing. It might let us invest more in our business’s particular strengths.

With worldwide connection, does it matter if IT experts are far away? They can remotely manage our tech.

Let’s weigh the advantages and downsides before outsourcing our IT department. Using outsiders to manage critical company systems may have hidden dangers and expenses. IT infrastructure and apps are essential for operations, security, customer experience, and almost everything else.

To help you choose IT outsourcing, we’ll discuss the pros and cons. There are excellent reasons for firms to do it and not to. Both opinions must be considered.

The Benefits of Outsourcing IT

Reduced Costs

Outsourcing IT infrastructure, help desk, application support, and other technical operations lets organizations access cheaper global IT expertise. Instead of depending entirely on local specialists to handle all areas of your IT, managed service providers use talented people in lower-wage locations like India, Eastern Europe, Latin America, China, and Southeast Asia. Organizations may decrease IT wages and benefit bills by tapping into these offshore talent centers.

In addition to lower personnel costs, managed service companies benefit from considerable economies of scale efficiencies they can pass on to customers. By integrating technical support and services for thousands of customers into efficient, centralized platforms, suppliers gain buying power to negotiate huge discounts on everything from data center capacity and hardware procurement to software licensing.

Consolidating demand for servers, network infrastructure, business applications, and operating systems helps managed service providers get the best pricing. The competitive monthly prices customers pay for completely outsourced enterprise-grade IT support and services are generally 70% less than in-house costs.

Improved Efficiency and Expertise

Outsourcing IT infrastructure and applications saves money and provides access to skills and knowledge that would be hard to build and maintain domestically. Managed service companies employ huge, talented teams in cloud architecture, automation, security analytics and threat intelligence, machine learning operations, application modernization, and more.

This deep domain expertise across hundreds of customers enables providers to provide world-class corporate IT capabilities beyond what nonspecialized internal IT departments can. Thus, outsourced services are more efficient, responsive, and sophisticated than corporate IT teams can handle. Outsourcing provides inexpensive access to best-in-class technical capabilities maintained by devoted professionals rather than developing and retaining these specialized skills domestically.

Increased Focus on Core Priorities

Finally, outsourcing IT lets organizations concentrate on essential business issues rather than back-office maintenance or assistance. What makes a biotech, consumer goods, logistics, or financial services business successful? It’s usually something other than IT infrastructure upkeep, help desk ticketing, or supporting decades-old legacy systems.

By outsourcing undifferentiated IT tasks to managed service providers, firms may focus on market-differentiating goals using financial, managerial, and internal resources. This extends beyond cost reduction since saving money enables investing in creative capabilities. More significantly, freeing organizational resources from low-value infrastructure maintenance and technical assistance allows them to focus on business development drivers.

A corporation may avoid the hassle of managing untidy, distracting back-office operations by outsourcing IT. Better goods, services, and experiences that benefit consumers and outperform rivals become internal priorities. Top-managed IT service companies maintain systems outside.

The Risks of Outsourcing IT

While outsourcing IT services can yield significant cost efficiency and flexibility benefits, it also comes with underappreciated risks around quality control, data security, and loss of organizational knowledge. Companies must carefully evaluate these downsides against the promise of shortcuts and savings.

Quality Control Issues

Outsourcing IT functions like help desks, servers, and applications can introduce communication barriers and the need for visibility, making consistently delivering quality service difficult across third parties. Offshore outsourcing partners may need help to grasp complex business needs when addressing support tickets or conducting maintenance activities. Time zone differences also make resolving issues challenging in real time.

With complete control and on-site visibility into daily operations, companies can avoid dynamic changes in the outsourcer’s staffing, processes, or financial health, manifesting in declining service levels or responsiveness over time. The allure of initial cost savings can quickly evaporate into expense volatility and unexpected quality or reliability gaps. Recovering from these issues is challenging.

Security Vulnerabilities

Handing off IT infrastructure and data access to outside vendors exposes companies to intensified security risks. Every third-party provider added to an environment introduces potential attack vectors like compromised credentials, vulnerable code, malware payloads, or unstable partners exposing networks to unauthorized access.

High-profile hacks have exploited these outsourcing vulnerabilities. Beyond external threats, offshore partners pose insider risks from certain nations’ data surveillance laws.. Companies can suddenly find their trade secrets or sensitive information up for sale to competitors.

Loss of Organizational Knowledge

Over time, relying on managed service providers causes specialized IT knowledge and skills to erode internally. As engineers get laid off and technical documentation disappears, tribal knowledge accrued over the years gets lost. Businesses must learn how critical systems run, integrate, and can be updated.

This creates a dangerous dependency on specific outsourcers. Bringing IT fully back in-house becomes prohibitively expensive due to gaps in institutional expertise. Companies find themselves locked in with outside vendors on old systems. Captive to long-term contracts, they need more bargaining leverage, price transparency, continuity protection, and agility in responding to shifting business requirements. Vendor relationships take on outsized strategic significance.

Mitigating Outsourcing Risks

Governance techniques including SLAs, security audits, and hybrid approaches reduce IT outsourcing risks. Rigid SLAs with performance, scalability, responsiveness, and financial consequences for failures encourage quality. Auditing a provider’s access, data, and vulnerability prevention decreases security risks. Finally, outsourcing just commoditized services in phases reduces risk.

Conclusion

Outsourcing IT may save costs, increase service delivery and security concerns, and weaken indigenous skills. Reducing these risks needs governance and vendor partnerships. To decide whether outsourcing your IT is strategic, book a free RLabs assessment to map your infrastructure, evaluate providers against requirements and risk exposures, and get specific environmental recommendations. Contact us to have our professionals walk you through the process!