27/01/2012

By Ben Weiner, CEO for Conjungo

Outsourcing is a process where an organisation sub-contracts certain functions or processes within a business to a specialist, third-party, company.

These activities are something that we often do in our daily lives. For example, many people have gardeners or cleaners simply because they do not have the time or inclination to clean their house or mow the lawn. In fact from a business perspective you’ll rarely see a member of staff cleaning the office at the end of the day, it is nearly always contracted out to a specialist company.

IT outsourcing can be used by most companies and, in fact, many outsource some key IT services without actually realising it. For example, many companies outsource their IT support function such as software support and hardware maintenance. It is very rare, especially for small to medium size companies, to retain these support services in-house simply because employing specialist personnel who may only ever be called upon occasionally, is not cost effective. This means that the company have the expertise of a professional but not the overhead or cost of a full-time person.

IT outsourcing is also sometimes known as ‘managed services’. This is a very similar system where generally, non strategic IT functions are subcontracted to a specialist third party organisation.

The outsourcing provider may not necessarily provide all of the services required directly as they may not have the relevant resources or expertise. Quite often certain services are sub-contracted to specialist companies, leaving the original provider to manage those relationships.

The future of IT outsourcing

The market for IT outsourcing is set for continued growth. This is as a result of companies looking to reduce costs and focus on key areas that affect their business.

One of the main causes is the current ‘credit crunch’ and talk of recession, so naturally, companies will wish to reduce costs and outsourcing can be a useful way of achieving this.

Why outsource?

The main reason to outsource the IT department is generally to reduce business costs and benefit from the expertise that an outsourcing company can provide.

Managing technology is a complicated function let alone choosing, installing and supporting it. For most organisations it is seen as an overhead or even a potential headache!

It can also be difficult for a management team to measure the success of an IT department, unlike many other functions or departments within an organisation. As a result, quite often managers believe that ‘if it isn’t broken then don’t fix it’. Also, because technology it is so often misunderstood, i.e. people know they need technology but don’t know how it works, an organisation might not be fully using their technological advantages in order to become more efficient lower costs and improve profitability.

Read more at: www.conjungo.com/technology/outsourcing-it

By Ben Weiner, CEO for Conjungo, the technology information resource and search engine. Visit www.conjungo.com to continue reading about technologies in plain English.


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