Outsourcing

Outsourcing shouldn't be a dirty word

Outsourcing doesn't have to signal a flood of pink slips. Carefully planned outsourcing can let you use your current IT personnel more efficiently.

To many, "outsourcing" is a dirty word that conjures up images of personnel cuts and jobs moving offshore. But, outsourcing doesn't have to signal a flood of pink slips. Carefully planned outsourcing can let you use your current IT personnel more efficiently. In our Ninja Guide to IT cost cutting, Deb Shinder describes the following outsourcing scenario:

For example, as your business grows and your need for more servers expands, you might find that it's less expensive and less hassle to use a hosting service for your Web servers or e-mail, rather than buying more hardware and hiring more personnel.

And outsourcing isn't just for large IT departments. Many small IT shops and individual IT consultants may outsource services that they are unable to provide or aren't cost-effective for them to perform. I know several onsite computer support providers that outsource their laptop repairs to local or regional processing centers.

As Shinder writes outsourcing isn't a "one-size-fits-all solution." IT departments must carefully examine their specific needs, understand the potential pitfalls, and analyze the benefits to know whether outsourcing makes sense.

For more creative money-save advice, check out our download, "IT Cost Cutting: The Ninja Guide." This 18-page PDF includes:

  • Small cuts that can save big bucks
  • Ways that SMBs can make relatively painlessly cuts
  • Free Windows applications that can save money
  • Free security tools that can save money
  • Ways to give old servers a second life

About

Bill Detwiler is Managing Editor of TechRepublic and Tech Pro Research and the host of Cracking Open, CNET and TechRepublic's popular online show. Prior to joining TechRepublic in 2000, Bill was an IT manager, database administrator, and desktop supp...

7 comments
HypnoToad
HypnoToad

Outsourcing can be valuable under the right conditions. Flagrant cost cutting cuts far more in return. There's more to life than sticker shock...

bloghopperA2
bloghopperA2

Outsourcing is a fact of life in any industry (and country)today. It's a hard pill to swallow but given that it is not going to go away you either have to embrace the fact and move forward or bury your head in the sand and watch your business die. There are a lot of great tools available today to help business owners and managers work through the process successfully. "The Black Book of Outsourcing" and" The Services Shift - Seizing the Ultimate Offshoring Opportunity" are two I have read and recommend.

Tony Hopkinson
Tony Hopkinson

is to read a book... Do any of these really good books mention that if you do it soley based reducing headcount and assets, it will cost more, than you save in salary and kit? Cheap always costs you more in the long run, and it's the long run business managers seem to be wholly unaware of.

Bill Detwiler
Bill Detwiler

To many, "outsourcing" is a dirty word that conjures up images of personnel cuts and jobs moving offshore. But, outsourcing doesn't have to signal a flood of pink slips. Carefully planned outsourcing can let you use your current IT personnel for efficiently. For example, many small IT shops and individual IT consultants may outsource services that they are unable to provide or aren't cost-effective for them to perform. I know several computer support providers that outsource their laptop repairs to local or regional processing centers. I'd like to hear other examples of outsourcing that didn't involved job cuts.

MyopicOne
MyopicOne

Its true, it does not HAVE to mean job cuts - it can be used to supplement an existing organization - my previous employer had our commercial websites hosted by a vendor who provided the services much less expensively than we could; and we were moving towards using SaaS for certain tasks. For the supplemental approach to work, however, it does require staff willing to learn or be retrained for what the organization will need in the future, and an organization willing to accomodate the growing pains. I've seen outsourcing be successful (when it involves certain specialized services), and, based upon what I am told by my old coworkers, be much less than successful when a hasty, kitchen sink approach was taken (with the usual pink slips including mine).

Tony Hopkinson
Tony Hopkinson

The drive is short term blinkered reduction of costs to pay a shareholder dividend or get a promotion away before it all goes nipples up. If it was to generate revenue, or overcome a resource shortfall to keep it. They don't call it outsourcing....

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