Disadvantages to Outsource IT

Choosing to outsource IT reduces or completely eradicates direct communication between organizations and clients. Limited communication impedes the relationship building process, which may lead to the overall dissatisfaction of the organization and client. The outsourced IT organization loses complete control over all areas of the company. Project implementation timelines may suffer as a result. If the organization terminates the agreement with the outsourced IT entity, confidential, sensitive information becomes jeopardized.

Risk of exposing confidential data: When an organization outsources IT, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party.

Synchronizing the deliverables: In case you do not choose a right partner for the outsource of IT, some of the common problem areas include stretched delivery timeframes, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced IT partner.

Hidden costs: Although when choosing to outsource IT most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat.

Lack of customer focus: An outsourced IT company may be catering to the expertise-needs of multiple organizations at a time. In such situations outsource IT companies may lack complete focus on your organization’s tasks.
With all these pros and cons of outsourcing to be considered before actually approaching a service provider, it is always advisable to specifically determine the importance of the tasks which are to be outsourced. It is always beneficial for an organization to consider the advantages and disadvantages of offshoring before actually outsourcing IT.
Take home the outsourcing advantage and maximize the profit margins!!!

Risks of IT Outsourcing

Organizations that outsource IT services run a risk of receiving poor quality work. Offshore outsourcing sites often experience high employee turnover and may capitalize on the organization's limited technological capabilities, which leads to high-quality service being compromised. Outsourcing to foreign countries involves hidden costs, such as travel expenses and creating a infrastructure to manage operations. Companies that don't plan accordingly counteract the financial benefits of outsourcing.

Minimizing Risk

Mitigating risk requires that the organization recognize cultural similarities between itself and the specialise outsource IT firm. Working relationships often demand trust and geographic proximity; similarities may be found in historical context or a shared language. Outsourcing success usually occurs between organizations that operate in like industries. Understanding the technical language and best practices of an organization help to create strong working relationships.

Current Trends

Organizations begin renegotiating contracts with the specialized firms. Cost continues to be a major issue for companies and as such organizations look to ensure the value of their investment. Technology and software employment may continue to decrease even after the economy improves. Global service providers aim to capture a large share of IT work and service. Outsource of IT continues to penetrate North American organizations despite economic downturns in the late 2000 decade. Government-based reforms stand to increase future IT spending by organizations.

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