7 Problems With IT Outsourcing
IT Outsourcing is commonly used by businesses. But there are quite many problems associated with it. Let’s see the problems below-
1 Threats to security:
The lifeblood of running the business is the proprietary information. The payroll can be compromised if you are transmitting confidentiality. This includes record, medical payroll or any other confidential information to the IT Outsourcing company. The account should also contain sharing proprietary data such as product drawing or formulas.
The outsourcing company should be properly evaluated to secure the data properly.
We should be aware if we keep the project or job in-house, this does not prevent leaks of info.
For a former employee to disseminate proprietary and any other types of information it is not unhappy for them. You can also require those people access to the certain information sign a nondisclosure or some confidentiality agreement.
2 Time factor:
In the case of emergency, you will have to wait until your outsourced IT department can get someone there. Your emergency can be pushed back on many factors including when you’re also subjected to the calendar of your outsourced company.
At this scenario, you are at the goodwill of your outsourced IT department. The IT has still been in-house, the emergency would be dealt with right away.
3 Lacking the required skills:
The team may not perform the right skills required for their new roles if a Client puts a retained team in place to manage the IT Outsourcing implementation and ongoing operations. According to the research by TPI, 40% of clients in the benchmark are not given an initial training for the governance team assigned to manage the agreement. 60% of staffs who were assigned to the governance organization have no proper outsourcing experience.
There are only 20% of the clients feel like they had provided enough ongoing training for their governance team.
Most clients only consider existing staff within their own organization. Usually, they want to keep people with the best technical and business process experience. But these assigned people sometimes have a very hard time while making the switch between performing or managing the day to day and holding the service provider accountable.
4 Managerial Control Loss or Increased Efficiency:
Outsourcing can involve another company can perform the function of an entire department or a single task by signing a contract. Means handing over the reins of management and control of that function over or another company.
You cannot assume the outsourcing company can be driven by the same standard as before. Includes the mission that drives your company and it probably will not share your passion.
The new outsourcing company will be primarily running to make a profit from the services it’s providing to you. On the other side profit is a great motivator.
You can easily trust that the outsourcing company has considerable experience in the service it’s offering you. The outsourcing company makes sure to do the job well because it wants to do stay in the business.
The job might be performed to higher standards than if you kept it in-house and outsourcing can eliminate the sometimes rocky transition can take place when training members of your own in-house team.
It can free up your employees to allow them to deal with higher standard key functions of your business when outsourcing has a more mundane task.
5 Relationships between Employees:
This may not seem like a big issue but many companies have come across it many times. When the employees are in-house they know each other and they also know how to interact with one another.
If you are outsourcing your IT, there is only little chance you may get the same engineer showing up every time. This state’s your employees must get used to different contractors and how they work.
It’s really hard to build the relationship with outside staffs. But bringing in IT from the outside causes a fluctuation, this may not always be a problem. But many companies have seen it creates an issue to the point where an engineer may ban from being deployed to a client.
6 Poor knowledge:
Outsourcing can create uncertainty for existing employees and contractors who provide services to the client and their organization. This may lead the employee to look elsewhere for employment and leave their organization either before or while during the IT Outsourcing implementation.
It causes a need to either backfill the resource or to reduce the amount of work performed by the organization. Also, some of the clients engaged in the temporary knowledge that transfers to the service provider during the implementation. When the staffs are not properly motivated or if the service provider does not do a good job with good knowledge transfer, this may cause decreased efficiency in service delivery.
This can become a major issue if it is not properly addressed. Both service providers and clients should recognize the importance of these issues and generally make a reasonable attempt at mitigation.
7 Control and Decision:
One cannot control an external company. Therefore you have one more cog in a machine which is already so complex. Adding more layers and pieces can only lose more and more control over the company’s behavior, performance, and growth.
Th IT Outsourcing issues will be argued back and forth until IT is no longer relevant. Many have seen its effects from nearly every side. But they rarely do it work as well as those initiations the process would hope.
It is because it is not a completely flawless system. When the ideas of saving some salary come to mind many issues get overlooked. The IT should choose wisely where to spend the money because the return could make or break the company.
Rahul is a Software Developer and works at Softarex Technologies. He’s very passionate about his job and loves sharing his knowledge about development and IT Outsourcing. When he’s not working he loves reading books or playing the guitar