In today’s highly competitive market, the chance for small businesses to actively take part in the game is unfavourable. Business workflows and processes require a substantial amount of effort and efficiency. Greater costs are needed to offer quality services and to cope up with the market’s increasing demands.

However, there is a way for small businesses to flip the table. IT outsourcing is a practice of delegating tasks that are normally performed by the business to third-party providers. This allows small businesses to grow sustainably while reducing unnecessary expense or overhead cost.

Benefits of IT outsourcing services

Here are some more immediate benefits small businesses may gain through IT outsourcing services:

Cost-Effective

With IT outsourcing, it allows small businesses to effectively manage their finances by turning fixed costs into unit-level costs.

Eliminating costs needed for the maintenance or equipment allows small businesses to maximise their finances and shift more revenue to boost operational growth.

Cut Labor Costs

For most small businesses, employing more workers does not always guarantee quality output and efficient results. Furthermore, a greater number of workers incur higher labour costs.

However, using third-party providers help cut the costs needed for training and hiring temporary workers. Instead, it benefits small businesses to enjoy the service of well-trained and highly qualified workers from third-party providers without needing to train them.

Increase Efficiency

Delegating tasks with third-party providers helps small businesses to cut unnecessary business process. The reduction of research, development, and implementation time needed to deliver quality output also incurs a decrease in cost and increase in efficiency.

Flexibility

To adapt to the changing market demands, businesses should always be flexible and abrupt with their response to these changes. Unfortunately, small businesses have limited capacities which limit them to compete with the bigger market players.

Unlike big corporations dominating the market, it is disadvantageous for small businesses to keep constant flux with the market demands as it requires additional financial requirements.

However, considering a third-party provider which specializes in a given job, allows small businesses to be as quick to respond with the changing market demands.

Access To New Technology

With the rapid and unpredictable changes in information technology, it is unwise for small businesses to invest in this in-house technology. Aside from it is costly for small businesses to invest in this, it is as well time-consuming. Outsourcing specialists with up–to–date technology and are well-trained is the best way for small businesses to survive.

With the list of benefits presented above, it is also important for small businesses to sight the downsides and possible limitations of IT outsourcing. 

Risks of IT outsourcing services

Balancing the rewards with the risks in outsourcing is a required step to know whether or not small businesses need IT outsourcing services.

Lesser Control

One of the main downsides of hiring third-party providers is the difficulty of maintaining the desired level of control. Since hiring a contractor is far more different than hiring an employee for the company. Although the client can direct instructions, it is not the same as handling employees.

Miscommunication

Another possible problem small businesses may encounter when considering IT outsourcing is the miscommunication.

Communication issues such as the preferred means of communication, matching up with the business hours, and access to reliable internet connection are some of the possible issues which may come to rise.

Setting up your main communication channel is necessary. Depending on the client’s preferred communication style may include phone calls, e-mail, instant messaging, or on-cam and live chats.

Expectation Gap

This issue often occurs when there is a mismatch with the client’s desired output and the contractor’s delivered performance. This may also regard to the set budget and imposed payments for the project.

To prevent all of these from happening, checking the contractor’s past reputation and business legitimacy before signing up to work with them is the best way. This way, it is easier to narrow down your choices of reputable IT outsourcing service providers.

Negative Impact On Company Culture

As a business owner, it is easy to see the benefits of IT outsourcing. However, this may as well harm the overall company culture especially if you are considering the idea for the first time.

Employees may feel confused and threaten with the possible replacement or reassignment of tasks. Some employees will even think that their employers do not trust them enough to delegate important tasks.

Although it does not always happen on every company planning to outsource third-party providers, taking early measures to protect the company’s culture is a good way to prevent this issue from arising.

The Bottomline

As more and more companies rely on information technology to operate their businesses, IT outsourcing is becoming a common practice. It offers a more convenient way for small businesses to operate and compete with larger business enterprises in the market.

Although outsourcing equips small businesses with various benefits, it as well comes with justifiable risks and limitations. Balancing out the pros and cons which come on hiring a third-party provider should carefully be considered before coming up with the final verdict.