Published on:

25 May 2021


Rachael Adams

What is IT Outsourcing and Should We Use it?

From the smallest home business to the biggest corporation, almost every organisation needs help to make the most of technology. The many service options available from IT providers can be confusing, but it pays to know what to expect.

IT outsourcing refers to using an external IT provider to take on one or many IT tasks with minimal supervision. You might enlist their help to manage the network, your servers, or the entire IT environment, and they will manage all ongoing activities relating to that task, reporting back to you on a regular basis.

Large corporations tend to outsource single tasks or projects, where it is impractical or less cost effective to retain specific skills in-house. Small businesses (under 100 computer users) more commonly outsource complete responsibility for IT services under a Managed IT agreement. This usually provides a better outcome, as it avoids the distraction and complexity of modern IT, while getting advantages that help them stack up against much larger competitors.

The Key Benefits of IT Outsourcing

Every business engages with technology in different ways, so it makes sense that outsourcing agreements vary. Still, each organisation can expect to get access to additional expertise – when our customers enlist our help, they don’t just get access to one IT generalist; that person is backed by experts in security, wireless networking, cloud, and a host more specialties. For any small or mid-sized business, it simply wouldn’t be realistic to have this diversity of IT skills on the payroll.

Throughout the year, most businesses have peak times, and quieter spells. In a large enterprise, this can be absorbed easily by scheduling the many IT resources to work on major projects during less busy times. Smaller businesses are less equipped to cover such fluctuations, and outsourcing offers a flexible way to add resources where needed for a task or project, without paying them through the quieter times. You pay a fixed fee for continuous coverage, so you’re not having to worry about holiday cover or staff coming and going, and there are no unexpected expenses. We encourage a full review of costs when considering IT outsourcing – you should expect some cost savings along with a reduction in effort and an increase in output.

It should be mentioned that the advantages depend on using a provider with a strong track record. They have systems and tools available to you that have been fine-tuned over years, staff with experience in many industry sectors, and the knowledge of major and niche IT vendors. A well-matched outsourced IT provider reduces risk and knows where you can cut costs – but they also can take a strategic role, helping you to drive business growth.

What is the difference between Outsourcing, Offshoring, and Nearshoring

Outsourcing is often confused with offshoring, where IT services are provided remotely, often from a far away country. Similarly, nearshoring involves remote IT services provided from a nearby country with similar time zones, economy, and culture. While these options may offer cost savings for some, there are certainly pitfalls that can make offshoring and nearshoring a false economy. Typically, you should expect to invest more time in managing these services, and be prepared for greater complexity. You should not expect face-to-face meetings or on-site services.

Managed Services or Outsourcing?

For businesses with fewer than 100 computer users, the right Managed IT service is likely to offer better value and outcomes, as the provider has the products, tools, knowledge and processes in place, all billed at a fixed fee per month.  It is hard for a small business to have an internal IT person or team with the broad range of skills and knowledge to cover all the needs of a business.  Growing concerns around Cyber Security are especially pertinent: Australian government research found that 62% of small to mid-sized businesses had experienced a cyber breach, so choosing a service that provides strong security expertise is especially valuable.

Managed IT offers a fixed monthly fee that enables businesses to manage and reduce overall IT costs. It is much like having your own IT department with an exceptional range of specialist skills – but you only pay for the amount of those skills needed, and you never have to manage holiday cover or employment contracts. They are accountable for service levels, and come complete with a set of systems and tools that simply wouldn’t be available in-house, meaning you get insightful reporting and a much clearer view of your business technology profile.

Managed IT is focused on outcomes, and you get the strategic guidance and advice that draws on market and industry knowledge to align with your business. Whether you are targeting improved customer experience, an efficiency boost, or modernised service delivery, you have a team of people who get to know your business, and custom design a technology environment to make it happen.

Time to explore technology alternatives, or want a free chat with our team of experts? Contact TechPath today.