10 problems with outsourcing IT

"Outsourcing your IT functions may appear to make good sense, but beware of certain side effects that could negate the benefits."

The economy has hit everyone hard. Many companies have had to pare back departments, employees, budgets... on nearly every level. And many companies have done something no one thought they would ever do — jettison their IT departments in favor of outsourcing. On paper, it seems to make perfect sense. You have a company willing to handle your IT needs on an on-call basis. You're not paying staff to sit around and wait for problems, nor are you having to pay benefits or deal with the issues that come with having computer engineers on hand. (I say that mostly in jest.)

But along with that approach comes a handful of issues you may not be prepared for. Let's examine 10 of them.

1: Real cost

There are costs involved with outsourcing IT that many do not consider. For example, when you schedule an appointment with your outsourced IT company, you're going to be charged for the drive time there and back. And what about when that outsourced engineer has no idea how to fix your issue and has to learn on the job? Are you willing to pay for that? It's one thing if your own employees learn as they go. But it's a different story when a contracted employee does it. There are other real costs as well, such as when you get recommendations from the outsourced company that aren't actually needed. Upsales are common and sometimes unnecessary.

2: Time factor

When you have an emergency, it will have to wait until your outsourced IT department can get someone there. Drive time strikes again. You're also subject to the calendar of your outsourced company, and many factors can cause your emergency to be pushed back. At this point, you are at the mercy of your outsourced IT department. Had IT still been in-house, the emergency would be dealt with right away.

3: Familiarity with network and systems

When your IT is in-house, your IT workers (more than likely) know your system and your network really well. They should: They probably built it. So it's likely that in-house IT workers can keep your systems running more smoothly and solve emergencies much faster. Yes, it is true that even an outsourced IT department can learn your systems and networks. But there will be ramp-up time, as well as the possibility that a lack of documentation can cause serious issues.

4: Employee relationships

Although some may not see this as an issue, I have come across it many times. When employees are in-house, they know one another and know how to interact well with one another. If you are outsourcing your IT, you may or may not get the same engineer showing up every time. That means your employees must get used to different contractors and how they work. With an in-house IT staff, relationships can form and solidify. Of course, that's not to say relationships with outside staff can't be built. But bringing in IT from the outside causes a fluctuation. It may not always be a problem, but I have seen it create issues to the point that an engineer was banned from being deployed to a client.

5: Liability

There are certain instances where information or situations can become a liability when a third-party is brought in. Security measures may need to be implemented to protect company data, employees, systems... everything can become a liability. 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 piece to the puzzle, and more things can go wrong. Add to that the fact that no one is going to treat your company data with the care and importance that someone in-house will.

6: Loss of work

When an employee's machine goes down, that employee will lose the ability to work until the outsourced IT department can make it in to 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 work. With in-house IT, response time is only a matter of walking down the hall. And one other major factor plays into this: priority.

7: Priority

This is a big one. Your company will most likely be on a long list of companies your outsourced IT company works with. Who gets priority? Honestly? The company that spends the most will get top priority. If that's not you, that means you'll get bumped down when that big spender tells the outsourced IT company how high to jump. If you want to remain on top of the priority list, you will either have to spend a lot of cash or keep your IT in-house.

8: Morale

The second you can members of your IT department, everyone else is going to be on the watch for their own pink slips. That kind of deflating of morale takes a long time to recover from. And when employees know they don't have in-house IT, they know when problems arise, they may be slow to resolve.

9: Continuity

This takes into consideration many of the previous points. When your IT is outsourced, you'll constantly need to redirect engineers, retrain people with regard to conduct and security, and deal with a fluctuating IT schedule you have no control over. And when a variety of engineers step in, issues will be resolved differently and setups can be completed without regard to in-house standards.

10: Control

You can't control an external company. So now you have one more cog in a machine that is already incredibly complex. Why add more layers and pieces, which will only mean you lose more and more 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 a smooth-running system.

The decision

The outsourcing issue will be argued back and forth until IT is no longer relevant. I have 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 a lot of issues get overlooked when the idea of saving some salary comes to mind. Choose wisely where your IT dollars are spent. The returns could make or break your company.