Outsourcing Services – Risks And Advantages

Outsourcing Services – Risks And Advantages

Outsourcing non-core activities represents an essential preoccupation of every modern IT company. But, as IT companies consider the vast positive aspects and allure of IT services outsourcing, they must balance the risks and issues with the potential for labor arbitrage (the economic phenomenon where jobs move to countries where labor and the cost of doing business is inexpensive).

Advantages

  • Save money: Organizations that decide to outsource IT services, whether offshore or through a nearby service provider, transform fixed expenses to variable ones, liberating up capital for utilization in other areas.
  • Focus on Core Operations: Outsourcing IT services enables you to pay attention to the core capabilities of your company.
  • Having IT resources near those of big companies: Outsourcing IT systems and services creates a more reasonable playing field between small firms and large organizations.

Risks

Purchasers of outsourcing services must seriously consider risk. The results are often included in the outsourcing contract. Because many IT companies outsource their infrastructure to cloud suppliers, a Service Level Agreement is an essential topic. According to IBM, a Service Level Agreement “defines how the consumer will use the services and how the provider will deliver them”. I recommend you to read further about this topic on this article.

The potential risks of outsourcing IT services are:

  • Questionable Accessibility: Companies that depend on an outside service run the risk of downtime during critical system failures, leading to possible decline of productivity. Usually, providers offer warranty for operations in 99.9% of the time, so this risk is minimized.
  • Loss of Personal Touch: An in-house system manager becomes familiar with the system he/ she manages. As a result of this, he/she can provide results more efficiently, rapidly and professionally. IT outsourcing solely can’t provide a personal touch that comes close to that of an in-house IT professional. The solution consists in considering IT outsourcing provider being an extension of the own team.
  • Questionable Security Protocols: Companies must examine whether the outsourcing provider utilizes security procedures as powerful as their own. This is especially important when interacting with offshore providers. While these often have outstanding security standards, there is always the risk that one of the outsourcing company employees will break security. You must be careful when you negotiate the Service Level Agreements with the provider. It is also important for you to understand exactly how your applications and data will be protected and the policies that the IT services provider follows to maintain the security of your data.

Before taking the decision of moving to the cloud, every company manager should take into account the risks and advantages for its company and make the most appropriate decision for the organization.

By Rick Blaisdell

About CloudTweaks

Established in 2009, CloudTweaks is recognized as one of the leading authorities in connected technology information and services.

We embrace and instill thought leadership insights, relevant and timely news related stories, unbiased benchmark reporting as well as offer green/cleantech learning and consultive services around the world.

Our vision is to create awareness and to help find innovative ways to connect our planet in a positive eco-friendly manner.

In the meantime, you may connect with CloudTweaks by following and sharing our resources.

View All Articles

Sorry, comments are closed for this post.

Comic
SWIFT Says Bank Hacks Set To Increase

SWIFT Says Bank Hacks Set To Increase

Bank Hacks Set To Increase SWIFT, whose messaging network is used by banks to send payment instructions worth trillions of dollars each day, said three clients were hacked over the summer and cyber attacks on banks are set to increase. The theft of $81 million in February from Bangladesh’s central bank using SWIFT messages rocked…

Security: Avoiding A Hatton Garden-Style Data Center Heist

Security: Avoiding A Hatton Garden-Style Data Center Heist

Data Center Protection In April 2015, one of the world’s biggest jewelry heists occurred at the Hatton Garden Safe Deposit Company in London. Posing as workmen, the criminals entered the building through a lift shaft and cut through a 50cm-thick concrete wall with an industrial power drill. Once inside, the criminals had free and unlimited…

The Lighter Side Of The Cloud – Data Merge

The Lighter Side Of The Cloud – Data Merge

By Christian Mirra Please feel free to share our comics via social media networks such as Twitter, Facebook, LinkedIn, Instagram, Pinterest. Clear attribution (Twitter example: via @cloudtweaks) to our original comic sources is greatly appreciated.

The Rise Of Threat Intelligence Sharing

The Rise Of Threat Intelligence Sharing

Threat Intelligence Sharing  Security has been discussed often on CloudTweaks and for good reason. It is one of the most sought after topics of information in the technology industry.  It is virtually impossible to wake up and not read a headline that involves the words “Breached, Hacked, Compromised or Extorted (Ransomware)“. Included (below) is an…

Moving Your Email To The Cloud? Beware Of Unintentional Data Spoliation!

Moving Your Email To The Cloud? Beware Of Unintentional Data Spoliation!

Cloud Email Migration In today’s litigious society, preserving your company’s data is a must if you (and your legal team) want to avoid hefty fines for data spoliation. But what about when you move to the cloud? Of course, you’ve probably thought of this already. You’ll have a migration strategy in place and you’ll carefully…

Staying on Top of Your Infrastructure-as-a-Service Security Responsibilities

Staying on Top of Your Infrastructure-as-a-Service Security Responsibilities

Infrastructure-as-a-Service Security It’s no secret many organizations rely on popular cloud providers like Amazon and Microsoft for access to computing infrastructure. The many perks of cloud services, such as the ability to quickly scale resources without the upfront cost of buying physical servers, have helped build a multibillion-dollar cloud industry that continues to grow each…

Are Cloud Solutions Secure Enough Out-of-the-box?

Are Cloud Solutions Secure Enough Out-of-the-box?

Out-of-the-box Cloud Solutions Although people may argue that data is not safe in the Cloud because using cloud infrastructure requires trusting another party to look after mission critical data, cloud services actually are more secure than legacy systems. In fact, a recent study on the state of cloud security in the enterprise market revealed that…

Four Keys For Telecoms Competing In A Digital World

Four Keys For Telecoms Competing In A Digital World

Competing in a Digital World Telecoms, otherwise largely known as Communications Service Providers (CSPs), have traditionally made the lion’s share of their revenue from providing pipes and infrastructure. Now CSPs face increased competition, not so much from each other, but with digital service providers (DSPs) like Netflix, Google, Amazon, Facebook, and Apple, all of whom…

Three Tips To Simplify Governance, Risk and Compliance

Three Tips To Simplify Governance, Risk and Compliance

Governance, Risk and Compliance Businesses are under pressure to deliver against a backdrop of evolving regulations and security threats. In the face of such challenges they strive to perform better, be leaner, cut costs and be more efficient. Effective governance, risk and compliance (GRC) can help preserve the business’ corporate integrity and protect the brand,…

THE FUTURE OF BIG DATA AND DNS ANALYTICS

THE FUTURE OF BIG DATA AND DNS ANALYTICS

Big Data and DNS Analytics Big Data is revolutionizing the way admins manage their DNS traffic. New management platforms are combining historical data with advanced analytics to inform admins about possible performance degradation in their networks. Not only that, but they also have the ability to suggest ways to optimize network configurations for faster routing.…

Cost of the Cloud: Is It Really Worth It?

Cost of the Cloud: Is It Really Worth It?

Cost of the Cloud Cloud computing is more than just another storage tier. Imagine if you’re able to scale up 10x just to handle seasonal volumes or rely on a true disaster-recovery solution without upfront capital. Although the pay-as-you-go pricing model of cloud computing makes it a noticeable expense, it’s the only solution for many…

Is The Fintech Industry The Next Tech Bubble?

Is The Fintech Industry The Next Tech Bubble?

The Fintech Industry Banks offered a wide variety of services such as payments, money transfers, wealth management, selling insurance, etc. over the years. While banks have expanded the number of services they offer, their core still remains credit and interest. Many experts believe that since banks offered such a wide multitude of services, they have…

Cloud Infographic – Big Data Predictions By 2023

Cloud Infographic – Big Data Predictions By 2023

Big Data Predictions By 2023 Everything we do online from social networking to e-commerce purchases, chatting, and even simple browsing yields tons of data that certain organizations collect and poll together with other partner organizations. The results are massive volumes of data, hence the name “Big Data”. This includes personal and behavioral profiles that are stored, managed, and…

5 Ways The Internet of Things Will Drive Cloud Growth

5 Ways The Internet of Things Will Drive Cloud Growth

5 Ways The Internet of Things Will Drive Cloud Growth The Internet of Things is the latest term to describe the interconnectivity of all our devices and home appliances. The goal of the internet of things is to create universal applications that are connected to all of the lights, TVs, door locks, air conditioning, and…

The Future Of Work: What Cloud Technology Has Allowed Us To Do Better

The Future Of Work: What Cloud Technology Has Allowed Us To Do Better

What Cloud Technology Has Allowed Us to Do Better The cloud has made our working lives easier, with everything from virtually unlimited email storage to access-from-anywhere enterprise resource planning (ERP) systems. It’s no wonder the 2013 cloud computing research IDG survey revealed at least 84 percent of the companies surveyed run at least one cloud-based application.…

Mobile Connected Technologies – The Future Of The Healthcare Industry

Mobile Connected Technologies – The Future Of The Healthcare Industry

Mobile Connected Technologies Clinics, hospitals, and other healthcare facilities are embracing new mobile technologies in order to be more efficient in their daily tasks. With faster communication and better collaboration, clinicians can spend much less time handling medical devices and more time administering care to their patients. Industry experts are stating that mobile connected technologies…