Information Technology (IT) systems are expected to meet high standards of operation and processing integrity, while offering round-the clock availability, security and good performance.
In today’s environment, businesses must deal with rapid and regular changes in IT, the performance demands of the economy and pressure to deliver competitive IT functionality. To meet these challenges, businesses are increasingly considering outsourcing of their information systems activities as an attractive option. In fact, many businesses already use outsourcing in one form or another.
IT Outsourcing occurs when a business contracts a service provider to perform an IT function instead of performing the function itself. Outsourcing is a common option for start-up operations and for businesses entering new business lines. Rather than devoting time, energy and capital to the creation of IT processing services, businesses feel they can minimize the start-up time required to enter new markets by contracting a third party to provide those services immediately.
Outsourcing is more than a simple purchase decision based upon economic or financial criteria. It is a strategic decision that encompasses the transfer of service delivery of selected activities to a third party and the establishment of a long-term relationship that can create new sources of value for a business. Key to the understanding of outsourcing is that while service delivery has been transferred, accountability has not. Additionally, outsourced service delivery is, or should be, transparent to the users of the service and the customers of the business.
Many types of IT services can be outsourced, the most prevalent being Datacentre operation, Desktop support, HelpDesk services, Network Management, Software Development and support, Disaster Recovery and, more recently, Web Hosting and Application Management.
Businesses can decide to Outsource IT services for several reasons. So how do you know if your business is ready to Outsource?
· Operational Benefits: The operational benefits of outsourcing is transferring service delivery of IT activities to a “specialist”, thereby allowing management to focus on the businesses core activities. By minimising the resources devoted to non-core activities, a business might be able to improve its performance in other business processes;
· Technological Benefits: By outsourcing, a business will have access to people, processes and technology that it might not otherwise economically obtain. It can be a way of keeping up to date with changing technology and gaining access to IT expertise;
· Financial Benefits: An important benefit often sought by management in IT outsourcing decisions is financial in nature. Outsourcing offers the possibility of bringing IT costs under control through the efficiencies that might be delivered by the service provider.