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Outsourcing IT Services: Is It Good or Bad
For Your Company?
By Daniel Chokoe

Figure 1: Frustrated IT user

Information Technology is an integral part of any business organisation, it is nearly impossible for an
organisation to function without an IT department hence most companies had an IT department
...


What does it mean to outsource your IT?
Outsourcing refers to an arrangement in which one company provides services for another company
that could usually have been provided in-house
...
On paper outsourcing IT services seems to be a very good and
cost-effective way of running a company, certain costs such as Employee salaries, provision funds
and all other employee-related costs are eliminated
...
It seems like it is all gravy right? Well not quite
...


What are the pros and cons of outsourcing?

Figure 2: The Advantages and Disadvantages for IT outsourcing is split right in the middle

The pros of outsourcing

The pros of outsourcing often positively reflected by organisations across industries include:

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Better revenue realization and enhanced returns on investment
Lower labour cost and increased realization of economics of scale
Tapping in to a knowledge base for better innovation
Enables companies to focus on core competencies while not being concerned about
outsourced routine activities
Increases speed and the quality of delivery of outsourced activities
Reduces cash outflow and optimizes resource utilization

The cons of outsourcing
Often weighed with the advantages before any decision on outsourcing is undertaken, the following
represents some of the possible disadvantages often mentioned:

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Possible loss of control over a company’s business processes
Problems related to quality and turnaround time
Sluggish response times coupled with slow issue resolutions (happens all the time)
Shortcomings in performance expectations
Lower than expected realization of benefits and results
Issues pertaining to lingual accent variation
Possible strike by employees of the outsourced IT company (I mean hey, this is South Africa,
employees unions are forever active)
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The main one is trusting a third-party provider for all of your
company’s IT needs can create serious security issues
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If your business is having trouble managing technology on its own, it’s
likely that an IT outsourcing provider will be bound by the same constraints that make in-house
management difficult, research further on the difficulties you are facing to understand whether you
there is a real need to outsource
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It’s a good idea to ask yourself why you’re considering outsourcing
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If it’s because you’re unable
to manage problem systems or processes on your own, you may need to address these issues first
before involving a third party
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CIO you are responsible for making that decision, please
make sure that you are making the right choice
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cio
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