IT outsourcing: Ten reasons for ruling it out

In a chill economic climate, organisations are saving money wherever they can — and that can mean thinking what once would have been unthinkable and outsourcing the IT department.

The theory may make sense: an outsourcer will be responsive to your every IT need and you won't be paying staff to sit around and wait for problems. But with the outsourced approach come issues you may not have anticipated. Here are 10 of them.

1. True cost
Outsourcing IT generates hidden costs. For example, when you call in a representative from your outsourcer for an appointment, you'll be charged for the drive time there and back. And the outsourced engineer might have no idea how to solve your problem and has to acquire the knowledge on the job at your expense.

It's one thing for your own employees to learn on the job, but a contractor doing so is another matter. There are other real costs as well, such as the outsourcer's recommendations for acquiring new technology that isn't actually needed. Upselling among outsourcers is common and sometimes unnecessary.

2. Time factor
Your emergency may have to wait until the outsourced IT department can get someone on the job. If it involves a site visit, those drive-time issues may strike again. You're also subject to the outsourcer's workload, and many factors can cause your emergency to be pushed back. So it's out of your hands, whereas had IT still been in house, the emergency could have been dealt with immediately.

3. Network and systems familiarity
When your IT is in house, the tech staff know the systems and networks really well. They should, because they probably built them. So they can probably keep it all running more smoothly and solve emergencies far more quickly. Of course, even an outsourced IT department can become expert with your systems and networks, but there will be a learning phase, as well as the possibility that a lack of documentation will cause serious issues.

4. Employee relationships
I've often come across problems in relationships with outsourced staff, although others may not see this point as an issue. In-house IT staff know one another and know how to interact with users.

With outsourced IT, employees may not even get the same engineer every time, which can prevent relationships forming in the way they might do with your own tech team. Of course, you can build relationships with outside staff, but I have seen issues — even, in one case, an engineer being banned from working with a certain client.

5. Risk
In certain instances, information or relationships can be put at risk when a third party is brought in. Security measures may need to be implemented to protect company data, employees and systems. You never know when data is accidentally going to walk off on an external hard drive or be left in a car and stolen. You add another element to the risk puzzle, and more things can go wrong. Will an external provider treat your company data with the same care as someone in house would?

6. Loss of work
When a machine goes down, its user loses the ability to work until the outsourced IT department can resolve the issue. That loss of productivity can be costly. The response time and calendar issues you will face with outsourced IT will continually cause a loss of productivity. With in-house IT, response time is often defined by a walk down the corridor — and there tends to be a better sense of priority.

7. Priority
This is a major issue. Your company will probably be on a long list of your outsourcer's customers. Who gets priority? The company that spends the most. If that's not you, you'll be bumped down when the biggest spender tells the outsourced IT company how high to jump. If you want your IT to retain the priority it deserves, you either have to spend a lot or keep your IT in house.

8. Morale
Outsourcing an IT department has an impact on morale across the organisation because everyone wonders who will be next. Recovering from that dent to morale can take a long time, and there is also the direct effect on perception about IT itself, with employees believing that tech problems will take longer to resolve.

9. Continuity
With outsourced IT, you have to cope with external engineers, retrain people in relation to conduct and security, and deal with a fluctuating IT schedule over which you may have no control. With an external supplier, the way issues are resolved will change and setups may be completed with little regard to in-house standards.

Photo: Magic Madzik/Flickr (CC BY 2.0)

10. Control
It's hard to control an external provider — which also represents yet another cog in a machine that is already incredibly complex. Why add more layers and complexity, which can only mean you retain less control over how your company behaves, performs, and grows? If you are one of those owners, shareholders, or managers who prefers to keep control over the daily workings of your company, it doesn't make sense to outsource such a critical aspect of the business system.

To outsource or not to outsource
The outsourcing issue will be argued back and forth, but I've seen its effects from nearly every side and rarely does it work as well as those initiating the process would hope. Of course, it's not a completely flawed system, but many issues get overlooked when the goal of saving some salary is at issue. Where do you stand on the outsourcing issue?

This story originally appeared as 10 problems with outsourcing IT on TechRepublic.

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