Common Misconceptions of IT
Information technology (IT) has long been considered a staple to the tech sector in the developing 21st century. The growth of IT has been steadily increasing and is projected to globally reach $5 trillion in 2021. The United States is a lead contributor in this growth at 33% of total market share.
As the COVID-19 pandemic continues to impact supply chains, the need for new and adaptive IT solutions has surfaced in a magnitude we couldn’t have predicted. While the growth of IT has been steady, the actual application has not been as easy to predict as we are constantly reminded of the fragility of current circumstances.
In 2021, worldwide IT spending is forecasted to increase the most in enterprise software, enabling businesses and other organizations to capitalize on internal operational efficiencies and strategic initiatives. While in the past, internal IT was the common best practice, increasing numbers of industry players are looking to outsourcing their IT needs.
Common Misconceptions of Outsourcing IT
With all this projected growth, it is realistic for smaller companies to get overwhelmed with misinformation on the logistics of IT. We’ve compiled some of the most important misconceptions of outsourcing IT that could be stopping your firm from capitalizing on the opportunities that outsourced IT can provide:
1. Myth: It Reduces the Capacity of Your Workforce
For some, outsourcing may be the last thing an IT department wants to hear. With unemployment peaking at 14.8% in the past year, it is natural to fear outsourcing. However, that fear doesn’t have to be reality. While many firms look to outsource for cheaper labor, when it comes to IT, outsourcing is more about improving efficiencies and complementing internal IT operations.
The bottom line is that outsourcing is not a replacement for existing labor, but a complement — one that will help managers allocate resources and priorities at a more effective level without sacrificing any existing workforce.
2. Myth: Outsourcing Surrenders Control Over Your Business
When a firm chooses to outsource, regardless of the size of the company, they are essentially handing over company information and expecting the compilation of key business process outsourcing (BPO). However, BPO is typically not a core function of the business. Often, these tasks are described as non-value-added workload — as in not affecting the value or quality of a company's product or services — so the company itself can prioritize focus on its core functions, internally and externally.
What this means for firms choosing to outsource is that they retain control over their business processes and over the third-party firm being outsourced to by restricting information access to only the essentials needed to complete the BPO.
For this dynamic to be most effective it’s best to find a firm that values transparency and shows enthusiasm for the development and achievement of your established goals. While control remains in the company, finding an outsourcing agency to act as a partner with shared interests will ultimately improve the effectiveness of outsourcing.
For an outsourced IT department, establish what value you expect to be brought to your organization. Determine how they can improve data security, develop stronger functionality and work collaboratively to achieve your goals.
3. Myth: Outsourcing Sacrifices Quality and Communication
While it is common to fear that outsourcing could decrease the quality of work and communication within a company by adding a new player, the contrary is actually true. Because outsourcing is a complement to operations, it reduces workloads for internal teams to concentrate their efforts on value-driven tasks in a more focused manner.
By outsourcing work, you are allowing your employees to prioritize the most important operations to enable their teams to be more productive. The same carries over to communication. By reallocating selective operations to a third party, your internal teams have better-focused priorities that are easier to manage at an effective level.
If the decision is made to outsource, it must be met with the same dedication and attitude as any business partnership in order for communication to be effective between your organization and the outsourced party. It is best practice to establish a communication framework document to define the expectations of both parties, the point of contact, schedules, project management tools and reporting expectations. A communication framework can ensure clear and effective communication between both parties without sacrificing any additional value to your firm.
4. Myth: Outsourcing Has Negative Effects on Efficiency
The solution to this myth is directly in line with the quality paradox. There is some truth to the saying, "There are too many cooks in the kitchen." However consider outsourcing — especially in the IT sector — not as adding more cooks, but adding a second kitchen.
When outsourcing, you are essentially dividing up your preestablished work so it is done more efficiently. Think of it this way, your top chefs aren’t utilizing their time in the kitchen if they spend hours peeling potatoes, chopping vegetables and washing dishes. But if you divert that work to additional help, your top performers can promote efficiency by dedicating their time to what drives the most value for your firm — their signature dishes.
If you are considering outsourcing your IT department, even the smallest issues can be addressed in the background with reduced downtime. Additionally, you can increase the adaptability and relevancy of your IT operations by streamlining the latest changes needed for implementation.
5. Myth: Outsourcing Is Only a Viable Option for Large Firms
While outsourcing is an investment and not a decision to be made on a whim, the notion that outsourcing is only available to large firms is false.
Deloitte’s 2016 survey found that 27% of companies that outsource receive $1 billion to less than $5 billion of annual revenue. The heart of the matter is that even small and medium-sized (SME) industry figures can benefit from outsourcing and long-term partnerships with successful outsourcing initiatives.
6. Myth: Outsourcing Agencies Don’t Align Themselves With Your Goals
It is true that every agency has its own corporate culture and value set. This may seem like a conflict of interest when bringing on an outsourcing agency, but this could actually be an advantage. Interview your potential partners as if they were applying for a job at your firm. Remember they are competing for your business, which means you hold the cards.
If a company is serious about establishing an ongoing business relationship with you, they will be willing to discuss your own corporate culture and goals. It is very important that when choosing an outsourcing organization, your goals are clearly established and understood. The right company will invest resources into getting to know your company by understanding the culture, skill sets, goals and expectations.
How Outsourced IT Services Complement Internal IT Teams
Introducing outsourced IT services to your organization when you have an established IT department might seem counterintuitive, especially since they are supposed to be your experts. But that is precisely the bread and butter of this style of organization. By outsourcing IT services, you introduce your team to additional experts who can help the overall department develop and learn from each other.
By outsourcing selective IT functions, you allow your internal teams to focus their attention on higher-priority implementations that require more focus and a larger allocation of time and resources. Outsourcing IT eliminates those non-value-added functions, so your internal team can continue to drive value for you and your clients.
The focus of outsourcing IT services is not to undermine internal IT departments, but to give them more opportunities to be better and more effective versions of themselves.
Prelude's Approach to IT Services
When it comes to providing the best value for SMEs, Prelude Services recognizes that no two firms are the same. Our unique approach addresses the specific needs of each IT department. Contrary to popular belief, IT is not always a full package. We fill in the blanks where your internal teams left off so they can continue to perform their best and drive value for your customers.
Having an internal IT department already is not an indication that outsourcing is wrong for your business. If anything, an internal team helps outsourcing be more effective and produce better results. Prelude Services understands the importance of outsourcing, and we are dedicated to doing it right the first time and driving the best results.
Contact Prelude for Outsourced IT Services
Prelude Services specializes in innovative IT solutions in the healthcare industry. We saw the need for IT services to keep up with HIPAA regulation in an already understaffed and underfunded industry. Prelude Services is founded on the idea of safety and security for even the most vulnerable patients. If you’re ready to take the next step in developing your business or want additional information, contact Prelude Services today!
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