Advantages and Disadvantages of Outsourcing IT
Information Technology Outsourcing (ITO) is the process of making a contract with another company or an individual to do a particular service or task. These contracts could last for several years and would encompass millions of dollars. There is not much difference between ITO and other kinds of outsourcing. Some of the prevailing ITOs and Business Process Outsourcing (BPO) in the market today are IBM, EDS, CSC, HP, ACS, Accenture and Capgemini.
IT outsourcing is a very efficient way of stretching a company’s budget. Most companies are aiming for at least a 30% decrease in expenditures through outsourcing. Evidently, there are also some possibilities of failing, but if the company outsources carefully, there is a realization that the company could achieve more than what they can accomplish on their own. Additionally, if the company transacts with a highly qualified vendor, they will be able to gain expertise in support of their own IT capacity. They will also have more edge in a very competitive market.
Pitfalls of outsourcing IT could come in different forms. Lose of control over the outsourced project, or even just part of it, is inevitable. Exchange of necessary data is required so there is always a possibility that the vendor can access confidential information which is vital to the company. Communication also plays a huge role in the success of the project so dealing with overseas vendors encompasses issues like time, language and/or cultural differences. Having a mix up on these aspects can certainly define the outcome of the project.
In conclusion, if a small organization doesn’t have the capacity, in skills and/or budget, to implement a vital project, outsourcing it – in full or part – to an outside company appears to be the best solution they can have. However, certain caution should always be considered in order to maximize the full potential of the benefits and rewards it...