A Look at IT Outsourcing

by: Karen Cayamanda

Outsourcing has become a solution for many Western companies affected by global recession in order to keep the business going. Aside from reducing costs, outsourcing enables companies to focus on core competencies. Non-core functions are then transferred to developing countries that offer services at lower costs. In Paul Ingevaldson’s article entitled “IT is Not the Mailroom”, IT is considered as a support department, and does not directly contribute in reaching the company’s goals. Therefore, it is a “perfect candidate for outsourcing”.

Almost all business processes go through IT systems, and the company will not be able to meet its goals without IT. This may be the case, but for some companies, they opt to outsource IT processes in order to cut costs. Bear in mind that IT entails technically-skilled workers. If IT processes are outsourced, there is no need for IT people in-house. As a result, the company will have a hard time figuring out how the system works if something goes wrong.

According to Ingevaldson, companies which chose IT outsourcing to deal with the impact of global recession will be underperformers when the global economy bounces back.

To outsource or not to outsource?

It goes without saying that to outsource or not to outsource IT is a major business decision. While it does not have a direct contribution in meeting business objectives, the company will not be able to function effectively without it.

If the company chooses to outsource IT, be aware of communication problems that may arise especially due to the huge time difference. Also, make sure that IT is outsourced to a reputable service provider. This is the most important thing to consider. Take note that many providers tend to promise more than what they can actually accomplish, and the end result will not be in the buyer’s favor. The vendor must be able to provide IT security credentials before signing the outsourcing contract. Compromising security just for the purpose of reducing operational costs will not do any good to the business.