Outsourcing is when a company turns to external resources at other companies to do tasks they once did internally. Outsourcing may be done to draw on external expertise, such as hiring legal specialists or certified auditors. However, outsourcing is frequently done to save money by shifting work to companies that gain efficiencies from large scale by being specialized. This outsourcing creates risks for firms that outsource software and hardware support.
1. Loss of control
Server support is now determined by both the policies of the outsourced firm and by corporate policy. Employees of the outsourcing firm may follow their own policies first and your policies second. Outsourcing firms can dictate service level agreements and penalties if standards are not met, but they cannot control how work is performed. Companies that outsource work must also cede control of contractors to the managers who direct their activities.
2. Added feedback delays
Instead of calling an internal support staffer to resolve a problem, customers must call an outsourcing firm for help. This frequently results in calls being received by a first level technician following a script. If the problem requires advanced skill sets, there is additional delay in transferring the call to a subject matter expert or putting in a ticket for them to call a user back. The need to pass through an intermediary adds delays to customer support. If problem does require the subject matter expert, they may need to travel to the site to resolve the problem. This delay may not occur when in house staff can walk down the hall and solve the problem.
3. Loss of expertise
Employees of an outsourced firm are rarely as knowledgeable as internal staff who have worked with specific hardware or software applications. Even if the internal staff are available, they may be reassigned to other areas or may not be available when outsourcers come to answer calls. If the internal experts are transferred to the outsourcing firm, ether as part of a realignment or a reorganization, the risk that they will seek yet another employment opportunity arises. There is also the risk that experts who are sent to the outsourcing firm may be terminated by the new company once they have trained lower paid technicians to do the most common tasks they performed.
4. Loss of accountability
When an internal employee performs poorly, that individual can face internal corporate consequences. This can include reassignment or firing. When an outsourced technician performs poorly, the outsourcing firm can solve the problem by assigning a different technician as the first solution. Changing account managers may also be offered as a solution. The worst case scenario for the outsourcer is that you take back the IT functions that you outsourced, but for which you may have lost your key personnel or licenses. This causes a loss of accountability when outsourcers do not perform to prior service levels.
5. Loss of intellectual property
When data is processed by an outsourcer, there is an additional risk of data loss due to the extra processing steps or outside hands and eyes that perform the work. Another risk is that outsourcers may take processes learned from interacting with staff and transferring those lessons learned to their other customers or using those best practices themselves; this may not be a direct effort to steal intellectual property but the spread of best practices to the competition does not help the outsourcer. While outsourcing may save money, the cost can be higher than it seems.