Everything about the business world is in flux right now. And even though managed IT services and outsourcing have been around for decades, myths surrounding how these services work and can be of benefit still abound. In fact, with some of the new realities it seems new myths are emerging. To best achieve your company’s goals, however, it is important to understand what outsourcing is, and what it is not; as well as what is changing, and what will remain the same. Exposing outsourcing myths is a good start to understanding how this model can help your business move forward.
Outsourcing Myths Debunked
- IT Outsourcing is a Dead Concept: Some people believe that the cost savings associated with managed services and outsourcing have disappeared. While older models of outsourcing which have not evolved may in fact be less viable than they once were, the newest generation of outsourcing promises to deliver more savings. Most experts agree, IT outsourcing is far from dead; it’s simply evolving.
- The Old Rules Still Apply: It leaders who have been around for decades may think they know it all, but the basics of outsourcing’s value proposition have significantly changed. Contracts written for efficiency and cost reduction are being slowly replaced with contracts designed to achieve business outcomes and promote growth. Trust and relationship have become even more important in the outsourcing contract, according to Steve Hall, president of EMEA at outsourcing consultancy Information Services Group ISG. “No contract envisioned the complete global economic shutdown cause by COVID-19. Enterprise organizations, outsourcing advisors and service providers didn’t have time to renegotiate new terms or service-level agreements. Everyone understood the human tragedy that was unfolding and worked together to protect employees and safeguard corporate assets,” says Hall. “Service providers supported global operations, reduced fees, extended payment terms, and generally supported their clients. We will continue to have debates on details, pursue outcome-based contracts, negotiate pricing and gain-share clauses, but the last six months have taught us the importance of trust in sustaining relationships.” (Source, CIO Magazine)
- Outsourcing Equates to Ceding Responsibility: This is perhaps the most prolific of the outsourcing myths. While there are horror stories which involve businesses completely handing over their operation to an outsourcing firm, active client involvement will ensure that essential collaboration takes place. (Read more about Losing Control when Outsourcing IT Services.)
- Outsourcing Causes Good Employee Attrition: One can understand why an IT employee who was not “in the loop” might feel uncertain and nervous regarding an outsourcing program. To be sure, there are situations where the outsourcing firm replaces certain internal employees. However, effectively communicating the change and the decision can help to mitigate unnecessary employee attrition, when good employees leave for no reason. Hall says “The best advice is to communicate to employees early and often the benefits of outsourcing and help them understand how they will be a part of the change.”
- Outsourcing is Getting Easier Due to Technology: IT outsourcing has become more mainstream, and many think that means it is becoming commoditized or standardized. The fact is that every outsourcing deal is unique in every way – technical, functional, and financial. It remains a transformational, comprehensive and complex business deal that requires diligent planning and management.
Through all of the recent challenges, Alliance IT has continued to provide comprehensive IT services to companies across Sarasota and Bradenton. If you want to discuss what we can do for your business but have hesitated due to some of these outsourcing myths, give us a call and we will answer any of your questions.
