3 Common Misconceptions about IT Outsourcing
Increasing competition among businesses often leaves many entrepreneurs looking to cut operating costs while maximizing revenues. One common way to cut down on expenses is to reduce the workforce either partially or completely. The IT department sometimes can be featured as non-essential, and many businesses don’t have a necessary in-house IT specialist at a time which means they have to outsource. Naturally, IT Outsourcing has its own merits and demerits, which we are not going to discuss in this article. In the midst of the conversations about outsourcing, there are bound to be some confusing myths and misconceptions some of which are completely outrageous.
Here are 3 such common misconceptions:
1. Hired Help Cannot Be Trusted
A lot of people hold the belief that outsourced IT are not loyal and trustworthy, being company outsiders. Some people further believe that hired support don’t “get” the organizations needs and will most likely provide poor quality services. Well, that’s not entirely true, but it’s not entirely false and outrageous either as some businesses have bad experiences with outsourced expertise.
To clear things up, the kind of experience to expect depends on a range of factors, including your budget, how you put across your problem, and most importantly, the type of contractor you approach. Whether you prefer onshore or offshore contractors, you need to carry out extensive background checks on the prospective contractor before hiring them. This includes, but not limited to, analyzing their portfolio, social media mentions and reading reviews from past clients. In particular, client reviews provide the best insight into a contractor’s quality of work as well as risk level – something the company themselves will not tell you.
The moral of the paragraph? The best way to eliminate doubts and put your trust issues to rest is by conducting some research and basing your final decision on that.
2. Outsourcing Presents Communication Barriers Due to Distance
Depending on the country that you’re based in and your specific needs, you may find yourself having to outsource services to a different country or region. And even when you seek local contractors, they are probably some distance from your office. Some people fear that the usually long distances between their business premises and the contractor’s offices may lead to slow response times and overall communication barriers. A lot of business people even shy away from contracting overseas companies for fear of language barriers. We won’t dismiss these perceptions as they sometimes can be real. However, we hold that with advances in modern communication technologies, it is possible to communicate with people thousands of miles away in real time. You can communicate via email, live chat or even conference calls if your infrastructure allows.
Notably, if fate leads you to an offshore contractor, you may want to schedule several face-to-face meetings before signing the contract to clear things up and establish a personal connection. Scheduled weekly calls and joint team building exercises also help a lot in breaking down communication barriers and creates a harmonious relationship among your staff and the contractor’s side.
3. Outsourcing Compromises Intellectual Property Rights
IT outsourcing may sometimes entail joint development of proprietary knowledge as well as sharing of information such as trade secrets and copyrighted material. For businesses in sensitive industries, there is always the fear that hired companies will steal or misappropriate their Intellectual Property, leading to loss of business or even brand image. Indeed, the concerns are not unwarranted, as it’s known from software industry history, some malicious IT companies have been accused of stealing their clients’ data and using it in their own operations.
To deal with this issue, we recommend getting into an agreement, preferably a Non-Disclosure Agreement, with the contractor. Make them undertake not to share any of your Intellectual Property, be it trade secrets or designs, with third parties. Include a penalty clause for breach of contract.
If a contractor tries to share any Intellectual Property with you, it’s good to carry out due diligence to determine if they really own the rights to that. Also, check any presented patents and the jurisdictions they fall under to make sure you’re not breaking any laws.
Outsourcing of services has taken the business world by storm. From government agencies to multinationals and even startups, everyone is choosing to outsource as a way to get specialized services while keeping costs low. In the sensitive field of IT, outsourcing gives you an access to highly skilled labor without the added expenses that come with it, such as pension and insurance contributions.