In the current era, IT is also playing an increasingly important role in medium-sized businesses – and therefore also the IT sourcing strategy. IT outsourcing has different advantages and disadvantages, but until a few years ago it was very popular among medium-sized businesses. But outsourcing IT is not the right decision for every company. We would like to accompany you in the decision-making process and have therefore clearly presented the IT outsourcing advantages and disadvantages.
IT outsourcing: advantages for SMEs
Outsourcing IT as an SME can have many advantages. In our view, the most important are the following:
Variable costs instead of fixed costs: when you work with an IT service provider, you can influence the costs yourself depending on the current situation. The number of hours the service provider completes for you is flexible – unlike salaries of internal IT specialists.
Diverse know-how: Another IT outsourcing advantage lies in the greater know-how of service providers. Most service providers have experts for every task. Internal IT staff may have to learn the ropes themselves. This costs time and money.
Scaling is possible: You wake up in the morning and have a brilliant idea that you want to implement immediately? With an external service provider, this is possible – for an appropriate fee. Internally, the possibilities are more limited.
No recruiting necessary: The market for IT specialists has dried up. If you can save on recruiting, you save a lot of time and high costs.
IT outsourcing: disadvantages for SMEs
IT outsourcing does not only have advantages. On the contrary: depending on what your company plans to do in the future, outsourcing can have fatal consequences. Known disadvantages include:
Loss of know-how: Today’s world is becoming increasingly digital. If you need digital skills in the future, you should set up an internal IT department. The money is then very well invested. Otherwise, the knowledge will always remain external with your service provider.
High initial costs: Even if working with an IT service provider results in lower monthly costs, the initial outlay is high. This describes all the costs that are caused by the training of the externals. But also by the organizational effort on your side, if you have to adapt or change processes, belongs to the IT outsourcing disadvantages.
Security: Small IT service providers in particular are dependent on their revenues. If the service provider goes bankrupt, it takes all the process knowledge from your company with it. Even if it doesn’t come to that, a new, lucrative contract may be prioritized higher than yours.
Data protection: You can control the handling of sensitive data much better in your company than with an external service provider.
IT Outsourcing – Advantages and Disadvantages: When does what prevail? The bottom line.
If you need to develop the IT sourcing strategy for your company, we recommend that you take a close look at the topic. Evaluate the advantages and disadvantages listed here in terms of priority for your company. Are you planning to digitize your core business soon? Then you should not think about IT outsourcing, but urgently build up internal expertise. If, on the other hand, the tasks involved are repetitive and not very demanding, you can consider IT outsourcing. In this case, the initial effort is kept within limits through knowledge transfer and you do not lose any business-critical knowledge.